Section 80AC

Section 80AC — the law in short

What the courts have decided on section 80AC, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Bharat Electronics Employees Co-op Credit Society v CCIT High CourtHelps taxpayer
  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.
• Coromondel Cabeles P Ltd v ACIT High CourtCuts both ways
  The Department has taxed my housing project income as business profit. Can I claim the section 80-IB(10) deduction now, in appeal, when I never claimed it in my return?
  Not for years governed by section 80AC. The Madras High Court held that where section 80AC applies, the deduction cannot be allowed unless the return was filed by the due date and the claim was made in it. The assessee had made no claim under section 80-IB in its return, so for assessment years 2007-08 to 2011-12 the benefit was refused, section 80AC having been inserted by the Finance Act 2006 with effect from 1 April 2006. For assessment year 2006-07 the question was answered in the assessee's favour. The Court recorded a prima facie view that the requirement may be directory, but held it could say so only under Article 226 and not in a section 260A appeal.
• Kanyakaparameshwari Co-operative Society Ltd v CCIT High CourtHelps taxpayerValidity unconfirmed
  My co-operative society filed its return late and lost section 80P because of section 80AC. If the delay is condoned under section 119(2)(b), does the deduction come back?
  On this Karnataka view, yes. The Court held that section 80AC does not say in express terms that the deduction becomes inadmissible if the delay in filing the return is condoned, so an order under section 119(2)(b) condoning the delay clears the way for the claim. It adopted its earlier decision in Sullia Taluk Womens Multi Purpose Co-operative Society and read the Central Board's circular of 26 July 2023, which directs the authorities to admit and decide condonation applications from audited co-operative societies for assessment years 2018-19 to 2022-23 on the merits. The rejection of the society's application was quashed and the delay condoned, and the Court went on to quash the completed assessment as well and remit the claim for fresh consideration.
• Kassia Credit Co-operative Society v ITO ITATHelps departmentValidity unconfirmed
  My society filed its return only in response to a 148 notice. Can it still claim 80P?
  No. Section 80AC(ii) makes filing by the s.139(1) due date a condition precedent for deductions under Part C of Chapter VI-A, which includes s.80P, and a return filed pursuant to a s.148 notice does not cure the default.
• Shree Dhamel Seva Sahkari v ADIT (CPC) ITATHelps taxpayerValidity unconfirmed
  CPC denied my society's 80P in a 143(1) intimation because the return was late. Can it?
  Not by a blanket adjustment. Adjustments under s.143(1) are confined to patent mistakes and arithmetical errors, so the CPC could not summarily disallow the s.80P claim; a return filed under s.139(4) is not automatically outside Chapter VI-A, and a bona fide, properly documented claim should be decided on merits.
• ACIT v Monarch Innovative Technologies Pvt Ltd ITATHelps taxpayer
  I filed my return on time but only claimed the section 80-IC deduction in a revised return. Does section 80AC kill the claim, and can the officer reopen an assessment in which he already allowed it?
  No on both counts, on these facts. The Mumbai Tribunal held that section 80AC requires only that the return be furnished on or before the due date under section 139(1); it does not say the deduction must itself be claimed in that return, and words cannot be read into a taxing statute that the legislature has not used. A revised return under section 139(5) filed in time is an extension of the original return. The reopening was also bad: all the material, including the revised return, the revised tax audit report and Form 10CCB, was before the officer when he allowed the deduction after detailed discussion, so this was a change of opinion. The Revenue's appeal was dismissed.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.