ITAT Chennai Remands Section 80P Deduction Dispute Linked to Late Return and Pending Condonation

Background of the Appeal

The dispute in S373 The Slm Corporation HSC and High School Staff Co-Op T&C Soc Ltd. Vs ITO (ITAT Chennai) arose from an intimation under Section 143(1) whereby the Central Processing Centre (CPC) denied a deduction claimed under Section 80P of the Income Tax Act, 1961 for Assessment Year 2019–20.

The assessee, a co-operative society registered under The Tamilnadu Cooperative Societies Act, 1983, filed its return of income belatedly on 12.10.2020. Since the return was not furnished within the time limits stipulated under Section 139, CPC processed the return and, through an intimation dated 13.01.2021 issued under Section 143(1), disallowed the assessee’s Section 80P deduction claim purely on the ground of delayed filing.

Challenging this disallowance, the assessee approached the First Appellate Authority (Addl./JCIT(A), Ranchi), but the disallowance was sustained. The matter then travelled to the ITAT Chennai, where the crucial issue became the impact of a pending delay condonation application under Section 119(2)(b) on the availability of Section 80P deduction.

Procedural History

Filing of Return and CPC Processing

  • The assessee, a co-operative society, filed its return for AY 2019–20 on 12.10.2020, which was beyond the due date prescribed under Section 139(1).
  • CPC processed the return under Section 143(1) and issued an intimation dated **13.01.2021`.
  • In that intimation, the claim for deduction under Section 80P was rejected solely because the return had not been filed within the statutory time under Section 139.

First Appeal Before FAA

  • The assessee carried the matter in appeal before the First Appellate Authority (FAA) under Section 250.
  • The FAA, after considering the assessee’s submissions, upheld the CPC adjustment and maintained the denial of Section 80P deduction, aligning with the position that a belated return disentitles the assessee from such claim.

Appeal Before ITAT Chennai

  • Aggrieved by the FAA’s decision dated 12.12.2025, the assessee preferred a second appeal to the Income Tax Appellate Tribunal, Chennai Bench.
  • During the Tribunal hearing, the assessee’s Authorised Representative, Shri S.R. Krishnan, Advocate, placed on record that a separate condonation petition had been filed before the competent administrative authority.

Condonation Application Under Section 119(2)(b)

Details of the Condonation Petition

The assessee had independently approached the higher administrative authority seeking condonation of delay in filing the return: