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Income Tax Appellate Tribunal, MUMBAI BENCH “G” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI PAVAN KUMAR GADALE
PER OM PRAKASH KANT, AM
This appeal by the assessee is directed against order dated 19.10.2022 passed by the Ld. Faceless Appeal Centre, Delhi, [in short ‘the Ld. CIT(A)’] for assessment year 2017-18, arising from the order u/s 143(1) of the Income-tax Act, 1961 (in short ‘the Act’) passed by the Ld. Centralized Processing Centre (CPC) on
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09.03.2019. The ground raised by the assessee are reproduced as 09.03.2019. The ground raised by the assessee are reproduced as 09.03.2019. The ground raised by the assessee are reproduced as under:
On the facts and circumstances case in law, the Ld. On the facts and circumstances case in law, the Ld. On the facts and circumstances case in law, the Ld. NaCIT(A) erred in not providing deduction u/s 80P of NaCIT(A) erred in not providing deduction u/s 80P of NaCIT(A) erred in not providing deduction u/s 80P of the Act. the Act. 2. On the facts and circumstances of the case in law, On the facts and circumstances of the case in law, On the facts and circumstances of the case in law, the Ld. NaCIT(A) erred in not considering facts that the Ld. NaCIT(A) erred in not considering facts that the Ld. NaCIT(A) erred in not considering facts that assessee is facing issue of double taxation if addition assessee is facing issue of double taxation if addition assessee is facing issue of double taxation if addition is sustained. is sustained. 2. The assessee also raised additional ground which is The assessee also raised additional ground which is The assessee also raised additional ground which is reproduced as under: reproduced as under:
On the facts and circumstances of the case in law, e facts and circumstances of the case in law, e facts and circumstances of the case in law, CPC erred in disallowing 80P deduction while CPC erred in disallowing 80P deduction while CPC erred in disallowing 80P deduction while processing return u/s 143(3) which is bad in law. processing return u/s 143(3) which is bad in law. processing return u/s 143(3) which is bad in law. 3. Briefly stated, facts of the case are that in the case, the Briefly stated, facts of the case are that in the case, the Briefly stated, facts of the case are that in the case, the assessee filed return of income claiming deduction u/s 80P of the assessee filed return of income claiming deduction assessee filed return of income claiming deduction Act on 19.09.2017. While While processing the return, the Ld. CPC denied processing the return, the Ld. CPC denied the deduction claimed of Rs.1,82,74,406/ the deduction claimed of Rs.1,82,74,406/- u/s 80P of the Act. On u/s 80P of the Act. On further appeal, the Ld. CIT(A) held that the order u/s 143(1) of the further appeal, the Ld. CIT(A) held that the order u/s 143(1) of the further appeal, the Ld. CIT(A) held that the order u/s 143(1) of the Act has merged with the assessment order Act has merged with the assessment order u/s 143(3) of the Act u/s 143(3) of the Act dated 17.12.2019 wherein the Assessing Officer has disallowed dated 17.12.2019 wherein the Assessing Officer has disallowed dated 17.12.2019 wherein the Assessing Officer has disallowed deduction u/s 80P of the Act and therefore, no intervention was deduction u/s 80P of the Act and therefore, no intervention was deduction u/s 80P of the Act and therefore, no intervention was required as the subject matter and the issue involved has merged required as the subject matter and the issue involved has merged required as the subject matter and the issue involved has merged with the subsequent assessment order chall with the subsequent assessment order challenged by the assessee. enged by the assessee.
Before us, the Ld. Counsel of the assessee Before us, the Ld. Counsel of the assessee filed filed a copy of the order of the Ld. CIT(A) passed in order of the Ld. CIT(A) passed in relation to the order u/s 143(3) the order u/s 143(3)
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dated 17.12.2019 and submitted the Assessing Officer has not dated 17.12.2019 and submitted the Assessing Officer has not dated 17.12.2019 and submitted the Assessing Officer has not reduced the demand which was raised co reduced the demand which was raised consequent to u/s 143(1) of nsequent to u/s 143(1) of the Act, though Ld. CIT(A) has allowed the claim of the assessee in the Act, though Ld. CIT(A) has allowed the claim of the assessee in the Act, though Ld. CIT(A) has allowed the claim of the assessee in order passed with reference to 143(3) order of the Assessing Officer. order passed with reference to 143(3) order of the Assessing Officer. order passed with reference to 143(3) order of the Assessing Officer. We find that the Ld. CIT(A) has We find that the Ld. CIT(A) has allowed the claim of deduction u/s allowed the claim of deduction u/s 80P of the Act observing 80P of the Act observing as under:
“8.0 The sole issue involved relates to Section 80P 8.0 The sole issue involved relates to Section 80P 8.0 The sole issue involved relates to Section 80P disallowance. In this respect, it is found that the assessee disallowance. In this respect, it is found that the assessee disallowance. In this respect, it is found that the assessee had, for the instant A.Yr., relied on the order passed in its had, for the instant A.Yr., relied on the order passed in its had, for the instant A.Yr., relied on the order passed in its own case by the Hon'ble ITAT, Mumbai Benches own case by the Hon'ble ITAT, Mumbai Benches own case by the Hon'ble ITAT, Mumbai Benches "G", Mumbai in ITA No.5741 Mumbai in ITA No.5741/Mum/2018 for Asst. Year 2014 /Mum/2018 for Asst. Year 2014- 15 dated 3/12/2018, wherein the para no. 8 & 9 read as 15 dated 3/12/2018, wherein the para no. 8 & 9 read as 15 dated 3/12/2018, wherein the para no. 8 & 9 read as follows:- 8. In view of the foregoing, we set aside the order 8. In view of the foregoing, we set aside the order 8. In view of the foregoing, we set aside the order passed by the learned CIT(A) and direct the passed by the learned CIT(A) and direct the passed by the learned CIT(A) and direct the Assessing Officer to allow deduction us 80P(2)(d) of Assessing Officer to allow deduction us 80P(2)(d) of Assessing Officer to allow deduction us 80P(2)(d) of the Act in r the Act in respect of interest earned by the assessee espect of interest earned by the assessee from the deposits kept with Co from the deposits kept with Co-operative Banks. operative Banks.” 5. Before Before Before us, us, us, the the the Ld. Ld. Ld. Departmental Departmental Departmental Representative Representative Representative (DR) (DR) (DR) submitted that the Revenue has preferred appeal against the said submitted that the Revenue has preferred appeal against t submitted that the Revenue has preferred appeal against t order of the Ld. CIT(A) before the ITAT, henc order of the Ld. CIT(A) before the ITAT, hence matter being e matter being subjudice addition should not be deleted. subjudice addition should not be deleted.
We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the relevant material on record. relevant material on record. In our opinion, the issue of deduction In our opinion, the issue of deduction has already been allowed by the Ld. CIT(A) in 143(3) proceedings has already been allowed by the Ld. CIT(A) in 143(3) proceedings has already been allowed by the Ld. CIT(A) in 143(3) proceedings and therefore, the Revenue should have reduce and therefore, the Revenue should have reduced the demand raised d the demand raised u/s 143(1) of the Act also. The Ld. AO is accordingly directed to give . The Ld. AO is accordingly directed to give
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effect of the finding of the Ld. CIT(A) in the impugned order that effect of the finding of the Ld. CIT(A) in the impugned order that effect of the finding of the Ld. CIT(A) in the impugned order that order u/s 143(1) already order u/s 143(1) already merged with the section 143(3) of the Act with the section 143(3) of the Act and the said addition u/s 143(3) addition u/s 143(3) has been deleted by the Ld. CIT(A) has been deleted by the Ld. CIT(A) vide order dated 01.12.2022. vide order dated 01.12.2022.
6.1 Before us, the Ld. Counsel of the assessee has raised an Before us, the Ld. Counsel of the assessee has raised an Before us, the Ld. Counsel of the assessee has raised an additional ground that the Ld. CPC was not authorized to make additional ground that the Ld. CPC was not authorized to make additional ground that the Ld. CPC was not authorized to make adjustment u/s 143(1) of the Act as the issue of deduction u/s 80P adjustment u/s 143(1) of the Act as the issue of deduction u/s 80P adjustment u/s 143(1) of the Act as the issue of deduction u/s 80P of the Act was of debatable nature. The Ld. Counsel also submitted of the Act was of debatable nature. The Ld. Counsel also submitted of the Act was of debatable nature. The Ld. Counsel also submitted that power to make disallowance of deduction under the heading C that power to make disallowance of deduction under the heading C that power to make disallowance of deduction under the heading C – “Deductions in respect of “Deductions in respect of certain incomes u/s u/s VI-A, while processing return u/s 143(1) only by the Finance Act, 2021 w.e.f. processing return u/s 143(1) only by the Finance Act, 2021 w.e.f. processing return u/s 143(1) only by the Finance Act, 2021 w.e.f. 01.04.2022 prior to that there was no power available to the 01.04.2022 prior to that there was no power available to the 01.04.2022 prior to that there was no power available to the Assessing Officer to allow the claim made under the heading “C- Assessing Officer to allow the claim made under the heading Assessing Officer to allow the claim made under the heading deduction in respect of certain incomes deduction in respect of certain incomes” under Chapter VI under Chapter VI-A. She submitted that assessment year in the year under consideration submitted that assessment year in the year under consideration submitted that assessment year in the year under consideration being assessment year 2007 being assessment year 2007-08 which is prior to empowering the o empowering the CPC for carrying out such adjustment out such adjustments and therefore, making and therefore, making such adjustment was beyond the power of the CPC. She relied on the adjustment was beyond the power of the CPC. She relied on the adjustment was beyond the power of the CPC. She relied on the decision of the Tribunal in ITA No. 612 to 614/M/2022 for decision of the Tribunal in ITA No. 612 to 614/M/2022 for decision of the Tribunal in ITA No. 612 to 614/M/2022 for 15, in the case of Meghana assessment year 2012 assessment year 2012-13 to 2014-15, in the case of Apartment Co-operative Housing Society Ltd. v. ITO operative Housing Society Ltd. v. ITO order dated operative Housing Society Ltd. v. ITO 20.07.2022. The relevant finding of the said decision is reproduced 20.07.2022. The relevant finding of the said decision is reproduced 20.07.2022. The relevant finding of the said decision is reproduced as under:
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“7. I have heard rival contentions and perused the record. 7. I have heard rival contentions and perused the record. 7. I have heard rival contentions and perused the record. Provisions of section 80A(5) reads as udder : Provisions of section 80A(5) reads as udder :- “80A(5) Where the assessee fails to make a claim in 80A(5) Where the assessee fails to make a claim in 80A(5) Where the assessee fails to make a claim in his return of income for any deduction under section his return of income for any deduction under section his return of income for any deduction under section 10A or section 10AA or section 10B or section 10BA 10A or section 10AA or section 10B or secti 10A or section 10AA or section 10B or secti or under any provision of this Chapter under the or under any provision of this Chapter under the or under any provision of this Chapter under the heading heading "C.-Deductions "C. Deductions in in respect respect of of certain certain incomes", no deduction shall be allowed to him incomes", no deduction shall be allowed to him incomes", no deduction shall be allowed to him thereunder. thereunder. As per sec. 80A(5), if an assessee has not made a claim As per sec. 80A(5), if an assessee has not made a claim As per sec. 80A(5), if an assessee has not made a claim for deduction under any of the sections for deduction under any of the sections mentioned in sec. mentioned in sec. 80A(5) of the Act, then such deduction shall not be allowed 80A(5) of the Act, then such deduction shall not be allowed 80A(5) of the Act, then such deduction shall not be allowed to him. As rightly pointed out by learned AR, the provisions to him. As rightly pointed out by learned AR, the provisions to him. As rightly pointed out by learned AR, the provisions of section 80A(5) would be applicable only if an assessee of section 80A(5) would be applicable only if an assessee of section 80A(5) would be applicable only if an assessee fails to make a claim for deduction under the heading "C fails to make a claim for deduction under the heading "C fails to make a claim for deduction under the heading "C - Deductions in respect of certain incomes" under Chapter Deductions in respect of certain incomes" under Chapter Deductions in respect of certain incomes" under Chapter VIA, which includes section 80P of the Act. In the instant VIA, which includes section 80P of the Act. In the instant VIA, which includes section 80P of the Act. In the instant cases, there is no dispute that the assessee has made a cases, there is no dispute that the assessee has made a cases, there is no dispute that the assessee has made a claim for deduction u/s 80P of the Act. Hence the claim for deduction u/s 80P of the Act. Hence the claim for deduction u/s 80P of the Act. Hence the provisions of sec. 80A(5) are not provisions of sec. 80A(5) are not applicable to the applicable to the assessee. 8. I also noticed that the provisions of section 80AC which 8. I also noticed that the provisions of section 80AC which 8. I also noticed that the provisions of section 80AC which bars claiming of deduction if the return of income was not bars claiming of deduction if the return of income was not bars claiming of deduction if the return of income was not filed before the due date specified under section 139(1) of filed before the due date specified under section 139(1) of filed before the due date specified under section 139(1) of the Act, was made applicable to the deduction the Act, was made applicable to the deduction under the under the heading "C heading "C - Deductions in respect of certain incomes" Deductions in respect of certain incomes" under Chapter VIA of the Act w.e.f. Ist day of April, 2018. under Chapter VIA of the Act w.e.f. Ist day of April, 2018. under Chapter VIA of the Act w.e.f. Ist day of April, 2018. Hence, for all the three years under consideration, Hence, for all the three years under consideration, Hence, for all the three years under consideration, provisions of section 80AC are also not applicable to the provisions of section 80AC are also not applicable to the provisions of section 80AC are also not applicable to the assessee, since all t assessee, since all these three years prior to assessment hese three years prior to assessment year 2018-19. 19. 9. The Learned AR also brought to my notice that the 9. The Learned AR also brought to my notice that the 9. The Learned AR also brought to my notice that the power to make disallowance of deduction under the power to make disallowance of deduction under the power to make disallowance of deduction under the heading "C heading "C - Deductions in respect of certain incomes" Deductions in respect of certain incomes" under Chapter VIA, while processing return unde under Chapter VIA, while processing return unde under Chapter VIA, while processing return under section 143(1) of the Act has been given to the Assessing Officer 143(1) of the Act has been given to the Assessing Officer 143(1) of the Act has been given to the Assessing Officer only by the Finance Act 2021 w.e.f. 1.4.2021. Prior to that, only by the Finance Act 2021 w.e.f. 1.4.2021. Prior to that, only by the Finance Act 2021 w.e.f. 1.4.2021. Prior to that, there was no power available with the AO to disallow the there was no power available with the AO to disallow the there was no power available with the AO to disallow the
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claim made under the heading "C claim made under the heading "C - Deductions in respect Deductions in respect of certain inc of certain incomes" under Chapter VIA. 10. Hence, for all reasoning mentioned above, I am of the 10. Hence, for all reasoning mentioned above, I am of the 10. Hence, for all reasoning mentioned above, I am of the view that the Assessing Officer could not have disallowed view that the Assessing Officer could not have disallowed view that the Assessing Officer could not have disallowed the deduction claimed by the assessee under section 80P the deduction claimed by the assessee under section 80P the deduction claimed by the assessee under section 80P of the Act in all the three years under consideration, whil of the Act in all the three years under consideration, whil of the Act in all the three years under consideration, while processing the returns of income us 143(1) of the Act. processing the returns of income us 143(1) of the Act. processing the returns of income us 143(1) of the Act. Accordingly, I set aside the orders passed by ld CIT(A) on Accordingly, I set aside the orders passed by ld CIT(A) on Accordingly, I set aside the orders passed by ld CIT(A) on this issue in all the three years under consideration and this issue in all the three years under consideration and this issue in all the three years under consideration and direct the A to delete the disallowance of claim for direct the A to delete the disallowance of claim for direct the A to delete the disallowance of claim for deduction made u/s 80P of the deduction made u/s 80P of the Act.” 6.2 Respectfully following the above decision, we uphold that the Respectfully following the above decision, we uphold that the Respectfully following the above decision, we uphold that the Ld. CPC was not authorized to carry out such adjustment for Ld. CPC was not authorized to carry out such adjustment for Ld. CPC was not authorized to carry out such adjustment for disallowance of deduction u/s 80P of the Act. The adjustment made deduction u/s 80P of the Act. The adjustment made deduction u/s 80P of the Act. The adjustment made by the CPC is accordingly deleted on this ground also. CPC is accordingly deleted on this ground also. CPC is accordingly deleted on this ground also.
In the result, the appeal filed by the assessee is allowed. In the result, the appeal filed by the assessee is allowed. In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open Court Order pronounced in the open Court on 20/02/2023. 02/2023. Sd/- Sd/- - (PAVAN KUMAR GADALE PAVAN KUMAR GADALE) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 20/02/2023 Rahul Sharma, Sr. P.S.
Copy of the Order forwarded to Order forwarded to : 1. The Appellant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai
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Guard file.
BY ORDER, BY ORDER, //True Copy// (Assistant Registrar) (Assistant Registrar) ITAT, Mumbai ITAT, Mumbai