Our co-operative credit society filed its return late and lost the section 80P deduction under section 80AC. The Chief Commissioner has rejected our section 119(2)(b) condonation application for want of sufficient cause. Is that rejection sustainable?
No, not on these facts. The Andhra Pradesh High Court set aside the Chief Commissioner's order refusing to condone the delay and directed that the return be treated as filed within time. The Court held that co-operative societies became liable to file returns only on the Finance Act, 2018 amendment, that a society run with minimal staff and unaware of the provisions is itself in genuine difficulty, and that the authorities must take a liberal approach towards co-operative societies in the teeth of CBDT Circular No. 13/2023. It did not decide the section 80P claim; that was left to be dealt with in assessment.
Decided by the High Court (High Court of Andhra Pradesh at Amaravati - Ninala Jayasurya and T.C.D. Sekhar, JJ. (judgment delivered by T.C.D. Sekhar, J.)) on 2026-07-02, reported as W.P. No. 19243 of 2025, assessment year 2019-20. It bears on section 119(2)(b), section 80P, section 80AC, section 139(1), section 148 of the Income Tax Act 1961, in Co-operative Societies and Deductions & Disallowances matters.
Section 80AC turns a late return into a total loss of the section 80P deduction, and small credit societies are exactly the class most likely to file late. Section 119(2)(b) is the only door out, and Commissioners routinely shut it by saying that ignorance of the law is not sufficient cause. This judgment says that for co-operative societies, in the light of Circular No. 13/2023, that is the wrong test: the relevant question is whether the society, run with the staff it has, was in genuine difficulty. It is also a useful reminder of the limits of the remedy - the Court restored the return to timeliness and stopped there, so the deduction still has to be earned in assessment.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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The petitioner is a co-operative credit society of the employees of Bharat Electronics. For assessment year 2019-20 it did not file a return within the time allowed by section 139(1). It filed the return only on 23 August 2023, after a notice under section 148 had been issued, and claimed the deduction under section 80P. Because section 80AC denies the deduction where the return is not filed by the section 139(1) due date, the society applied under section 119(2)(b) to have the delay condoned, relying on CBDT Circular No. 13/2023. The Chief Commissioner rejected that application by order dated 12 February 2025, holding that no sufficient cause had been made out. The society challenged that order under Article 226.
The writ petition was allowed. The Court set aside the order dated 12 February 2025 and directed the respondents to treat the returns filed by the society as within time. It reasoned that co-operative societies were brought under the obligation to file returns only by the Finance Act, 2018 amendment, and were entitled on filing to the deductions in section 80P; that a society run with minimal and not fully trained staff, unaware of the provisions and their applicability, is itself in genuine difficulty; and that where substantial justice and technicality are pitted against each other, substantial justice must prevail. It held that the authorities administering the Act have to take a liberal approach towards co-operative societies, particularly in the light of Circular No. 13/2023, when dealing with applications to condone delay. The Court did not rule on the section 80P entitlement, which is left to be determined in the assessment. No order as to costs.
The Court treated the Chief Commissioner's approach as applying too narrow a notion of sufficient cause. It began with the recent history: until the Finance Act, 2018 amendment, societies of this kind had no filing obligation, and the deduction under section 80P was available to them without the discipline that section 80AC now imposes. Against that background, a small employees' credit society that continues to run on the staff it has, without professional accounting help, is not being merely negligent when it misses the due date - the difficulty is real and is the very difficulty section 119(2)(b) exists to relieve. The Court then placed weight on CBDT Circular No. 13/2023, which it read as a direction to the authorities to deal generously with condonation applications from co-operative societies, so that a refusal which does not engage with that instruction cannot stand. Finally it invoked the settled preference of the constitutional courts for substantial justice over technicality: refusing condonation here would extinguish a statutory deduction on a procedural footing, without anyone ever examining whether the society was entitled to it. Having found the refusal unsustainable, the Court restricted its relief to restoring the return to timeliness and left the merits of section 80P to the assessing authority.
the authorities manning the Act have to take liberal approach towards the Co-operative Societies, especially in the teeth of Circular No.13/2023, while dealing with applications filed seeking to condone the delay
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Handle my notice → Ask a CA on WhatsAppNo, not on these facts. The Andhra Pradesh High Court set aside the Chief Commissioner's order refusing to condone the delay and directed that the return be treated as filed within time. The Court held that co-operative societies became liable to file returns only on the Finance Act, 2018 amendment, that a society run with minimal staff and unaware of the provisions is itself in genuine difficulty, and that the authorities must take a liberal approach towards co-operative societies in the teeth of CBDT Circular No. 13/2023. It did not decide the section 80P claim; that was left to be dealt with in assessment. This was decided by the High Court (High Court of Andhra Pradesh at Amaravati - Ninala Jayasurya and T.C.D. Sekhar, JJ. (judgment delivered by T.C.D. Sekhar, J.)) and bears on section 119(2)(b), section 80P, section 80AC, section 139(1), section 148 of the Income Tax Act 1961. It is reported as W.P. No. 19243 of 2025, assessment year 2019-20. Section 80AC turns a late return into a total loss of the section 80P deduction, and small credit societies are exactly the class most likely to file late. Section 119(2)(b) is the only door out, and Commissioners routinely shut it by saying that ignorance of the law is not sufficient cause. This judgment says that for co-operative societies, in the light of Circular No. 13/2023, that is the wrong test: the relevant question is whether the society, run with the staff it has, was in genuine difficulty. It is also a useful reminder of the limits of the remedy - the Court restored the return to timeliness and stopped there, so the deduction still has to be earned in assessment. If it applies to you, the first step is this: Plead the specific difficulty of your society - size of staff, absence of trained accounts personnel, the fact that filing became compulsory only after the Finance Act, 2018 - rather than a general plea of ignorance.
The petitioner is a co-operative credit society of the employees of Bharat Electronics. For assessment year 2019-20 it did not file a return within the time allowed by section 139(1). It filed the return only on 23 August 2023, after a notice under section 148 had been issued, and claimed the deduction under section 80P. Because section 80AC denies the deduction where the return is not filed by the section 139(1) due date, the society applied under section 119(2)(b) to have the delay condoned, relying on CBDT Circular No. 13/2023. The Chief Commissioner rejected that application by order dated 12 February 2025, holding that no sufficient cause had been made out. The society challenged that order under Article 226. The matter was decided on 2026-07-02 by the High Court (High Court of Andhra Pradesh at Amaravati - Ninala Jayasurya and T.C.D. Sekhar, JJ. (judgment delivered by T.C.D. Sekhar, J.)). On those facts the High Court held as follows. The writ petition was allowed. The Court set aside the order dated 12 February 2025 and directed the respondents to treat the returns filed by the society as within time. It reasoned that co-operative societies were brought under the obligation to file returns only by the Finance Act, 2018 amendment, and were entitled on filing to the deductions in section 80P; that a society run with minimal and not fully trained staff, unaware of the provisions and their applicability, is itself in genuine difficulty; and that where substantial justice and technicality are pitted against each other, substantial justice must prevail. It held that the authorities administering the Act have to take a liberal approach towards co-operative societies, particularly in the light of Circular No. 13/2023, when dealing with applications to condone delay. The Court did not rule on the section 80P entitlement, which is left to be determined in the assessment. No order as to costs.
The Court treated the Chief Commissioner's approach as applying too narrow a notion of sufficient cause. It began with the recent history: until the Finance Act, 2018 amendment, societies of this kind had no filing obligation, and the deduction under section 80P was available to them without the discipline that section 80AC now imposes. Against that background, a small employees' credit society that continues to run on the staff it has, without professional accounting help, is not being merely negligent when it misses the due date - the difficulty is real and is the very difficulty section 119(2)(b) exists to relieve. The Court then placed weight on CBDT Circular No. 13/2023, which it read as a direction to the authorities to deal generously with condonation applications from co-operative societies, so that a refusal which does not engage with that instruction cannot stand. Finally it invoked the settled preference of the constitutional courts for substantial justice over technicality: refusing condonation here would extinguish a statutory deduction on a procedural footing, without anyone ever examining whether the society was entitled to it. Having found the refusal unsustainable, the Court restricted its relief to restoring the return to timeliness and left the merits of section 80P to the assessing authority. In the words reproduced by the source cited on this page: "the authorities manning the Act have to take liberal approach towards the Co-operative Societies, especially in the teeth of Circular No.13/2023, while dealing with applications filed seeking to condone the delay"
It was decided by the High Court on 2026-07-02 and is reported as W.P. No. 19243 of 2025, assessment year 2019-20. Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section 119(2)(b), section 80P, section 80AC, section 139(1), section 148, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The writ petition was allowed. The Court set aside the order dated 12 February 2025 and directed the respondents to treat the returns filed by the society as within time. It reasoned that co-operative societies were brought under the obligation to file returns only by the Finance Act, 2018 amendment, and were entitled on filing to the deductions in section 80P; that a society run with minimal and not fully trained staff, unaware of the provisions and their applicability, is itself in genuine difficulty; and that where substantial justice and technicality are pitted against each other, substantial justice must prevail. It held that the authorities administering the Act have to take a liberal approach towards co-operative societies, particularly in the light of Circular No. 13/2023, when dealing with applications to condone delay. The Court did not rule on the section 80P entitlement, which is left to be determined in the assessment. No order as to costs. It arises in Co-operative Societies and Deductions & Disallowances matters, on section 119(2)(b), section 80P, section 80AC, section 139(1), section 148 of the Income Tax Act 1961, and was decided by High Court of Andhra Pradesh at Amaravati - Ninala Jayasurya and T.C.D. Sekhar, JJ. (judgment delivered by T.C.D. Sekhar, J.). Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Put CBDT Circular No. 13/2023 at the front of the condonation application and ask expressly for the liberal approach it contemplates. If condonation is refused by a reasoned order that does not engage with the society's circumstances, take it to the High Court under Article 226 rather than treating the refusal as final. Do not treat condonation as winning the deduction - be ready to prove the section 80P claim on the merits in the assessment that follows.
Still good law. Decided two months before the date of this note. No appeal or stay was traced, and nothing later was found dealing with it - which at this distance is what one would expect, so the position is simply untested rather than settled. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The judgment as read does not set out the Chief Commissioner's reasoning beyond his conclusion that sufficient cause was not shown, so it is not possible to say what material he had. The neutral citation was not captured from the copy read. The Court's direction is confined to treating the return as within time; whether the section 80P deduction is ultimately allowed is not decided and does not follow from this judgment. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The writ petition was allowed. The Court set aside the order dated 12 February 2025 and directed the respondents to treat the returns filed by the society as within time. It reasoned that co-operative societies were brought under the obligation to file returns only by the Finance Act, 2018 amendment, and were entitled on filing to the deductions in section 80P; that a society run with minimal and not fully trained staff, unaware of the provisions and their applicability, is itself in genuine difficulty; and that where substantial justice and technicality are pitted against each other, substantial justice must prevail. It held that the authorities administering the Act have to take a liberal approach towards co-operative societies, particularly in the light of Circular No. 13/2023, when dealing with applications to condone delay. The Court did not rule on the section 80P entitlement, which is left to be determined in the assessment. No order as to costs.
TaxSphere, “Bharat Electronics Employees Co-op Credit Society v CCIT”, https://taxnotice.vittsphere.com/caselaw/case/bharat-electronics-employees-co-op-society-v-ccit-119-2b-80p-delay/ (validity last checked 2026-09-01)
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