Punjab & Haryana High Court condones 34-day delay in ITR for Section 80P claim by co‑operative society

Overview

The Punjab & Haryana High Court, in Alaknanda Coop. Group Housing Society Ltd. Vs Chief Commissioner of Income Tax and others, examined whether a 34‑day delay in filing the income tax return for Assessment Year 2020‑21 could be excused to allow a Section 80P deduction to a cooperative society. The delay had occurred in the midst of COVID‑19–related disruptions, and the assessee had anchored its condonation request squarely on CBDT Circular No.13/2023 dated 26.07.2023.

The High Court held that the Chief Commissioner of Income Tax (CCIT) had erred in rejecting the condonation application by relying on CBDT Circular No.09/2015 dated 09.06.2015, without even adverting to Circular No.13/2023. Finding clear non‑application of mind, and evaluating the matter on merits, the Court set aside the CCIT’s order dated 15.06.2026, condoned the 34‑day delay, and directed the authorities to examine the assessee’s claim under Section 80P for AY 2020‑21 in accordance with law.

Factual matrix

Status of assessee and relevant assessment year

  • The petitioner, Alaknanda Coop. Group Housing Society Ltd., is a cooperative society registered under the Societies Registration Act, 1860.
  • For AY 2020‑21, the statutory due date for filing the income tax return was initially 31.07.2020.
  • Due to the COVID‑19 pandemic, the due date stood extended to 15.02.2021.

Events leading to delayed filing

  1. The assessee’s accounts, required to be audited under State law and routed through the State Audit Department, were not finalized in time for filing the return by 15.02.2021.

  2. The audit report – which had to accompany the return to enable a Section 80P deduction – was received only on 22.02.2021.

  3. On 09.03.2021, the assessee submitted a request before the Income Tax Department seeking condonation of delay in filing the return, citing:

    • COVID‑19 restrictions; and
    • late receipt of the statutory audit report.

  4. On 17.03.2021, the Department responded, advising the assessee to file a belated return under Section 139(4) of the Income Tax Act, 1961.

  5. Acting on this advice, the assessee e‑filed its return on 20.03.2021, i.e., with a delay of 34 days from the extended due date of 15.02.2021, and claimed deduction under Section 80P.

Assessment and appellate proceedings

  • An assessment order dated 19.09.2022 was passed under Section 143(3) read with Section 144B.
  • In this order, the Assessing Officer refused to grant the Section 80P deduction by invoking Section 80AC(ii), on the footing that the return had not been filed within the time prescribed under Section 139(1).
  • The assessee challenged the assessment order by filing an appeal under Section 246A before the Commissioner of Income Tax (Appeals) [CIT(A)].
  • The CIT(A) dismissed the appeal on 12.12.2025, upholding the denial of deduction.

Condonation application before CCIT

  • Parallel to the appellate route, the assessee on 12.01.2026 filed an application before the CCIT seeking condonation of the 34‑day delay in filing the return for AY 2020‑21.
  • This condonation application specifically and solely relied upon CBDT Circular No.13/2023 dated 26.07.2023, which deals with delay condonation in Section 80P claims by cooperative societies for AYs 2018‑19 to 2022‑23.
  • Meanwhile, the assessee also carried the CIT(A)’s order in appeal before the Income Tax Appellate Tribunal (ITAT), New Delhi.

ITAT’s order and liberty granted

  • By order dated 19.03.2026, the ITAT dismissed the appeal and sustained the decision of the CIT(A) dated 12.12.2025.
  • However, the ITAT consciously left the door open for condonation by recording:

“…the assessee has filed its condonation petition before the prescribed authority seeking to treat its return in issue as filed for the purpose of claiming the impugned deduction, in light of the CBDT’s Circular No. 13/2023 which is stated to be pending till date.