Important Income Tax Provisions applicable to Co-Operative Societies.

The Income Tax Provisions, as applicable to Co-Operative Societies  are lucidly mentioned herein below :
1. Section 40A particularly Sub- Section (3): If any payment , whether Capital Expense or Revenue Expense , exceeding Rs 10,000:/is made on one day to one person , then in computing Business  Income such Revenue Expense is not allowable and No depreciation is allowable on such Capital Expense . I., e in effect Assessee has to pay to Income Tax @ 30% plus Cess for that year and on account of disallowance Tax liability of Current Year and subsequent years @ 30% plus cess of otherwise allowable Depreciation.
 
Many Societies purchase Inverters & Batteries by paying more than Rs 10,000/- in cash to the dealer on one day.
Accordingly , please advise ALL Societies .
 
 
2. Secton 44AB : In a nutshell mandates Income Tax Audit , if the Turnover in a FY exceeds Rs 1 Crore , to get Audit Reports in Form 3CA/ 3CB and Certification of Certain Particulars in Form 3CD and to be submitted to the Income Tax Department , online, on or before the ‘ Specified Due Date ‘ u/s 139(1).
 
3. Section 139 :
139(1): Specified Due Date for FY 2020-21 is 31.07.2021, where Sales / Turnover / Gross Receipts is less than Rs 1 Crore and 30.09.2021 , where Sales/ Turnover /Gross Receipts is more than Rs 1 Crore.
The advantages of filing IT Return u/s139(1) are as follows : 
Assessee can file a Revised Return u/s 139(5), upto 31.03.2022,if there are any errors of omission or commission.
Assessee can carry forward Loss and set off the same against taxable income of 8 succeeding Assessment Years as per the provisions of Secton 72.
 
If IT Return filed after specified due date , No Revised Return permitted , No carry forward of Loss allowed , rather required to pay Interest u/ s 234 A.
 
Secton 234F :Belated Returns also attract Late Fees ranging from Rs 1,000/- to Rs 10,000/- as per the facts of the case .
 
4. Secton 271B : If any Assessee required to get accounts audited u/s 44AB fails to get the accounts audited and or fails to submit to the IT Department online by 30.09.2021 , then the Assessee shall have to pay a PENALTY of 0.5% of Turnover , etc OR Rs 1,50,000/- whichever is lower .
 
5. Section 80P: In case of a Primary Society supplying Milk raised from its Members to a Federal Society , there shall be deducted WHOLE OF THE AMOUNT OF INCOME from Gross Total Income . I.,e it NEED NOT PAY ANY INCOME TAX .
However , if a Society receives from Non-Members , effects Local Sales , Sample Sales and or derives Income from Rents , Bank Interest on FD/SB Accounts then on such incomes  income tax payable .
 
6. Section 194N : Substituted w.e.f 01.07.2020 : 
For Filers of Income Tax Returns of last 3 years that too within Due Date Specified u/s 139(1), 
No Tax Deduction at Source upto cash withdrawals of Rs one crore.
In other cases where returns not filed for 3 years , filed but not complying Section  139(1) , then deduction for cash withdrawals exceed Rs 20 lakhs.

by CA Mandava Ragahvendra Prasad . B.Com.,FCA ,DISA,AIII.
Practising Chartered Accountant, Gudivada-521301. A.P.