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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM, & HON’BLE SHRI MANOMOHAN DAS
आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2019-20 arises out of order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 20-01-2023 in the matter of an intimation issued by Centralized Processing Centre, Bengaluru (CPC) u/s.143(1) on 21-01-2021. The registry has noted a delay of 7 days in the appeal which stand condoned. The sole grievance of the assessee is denial of deduction u/s 80P by CPC while processing the return u/s 143(1) on the ground that the return of income was not filed within due date as specified u/s 139(1). The due date in present case was 30.09.2019 whereas the return was filed by the assessee only on 30.11.2020. The Ld. AR submitted that such an adjustment could not be made in this year as held by this Tribunal in recent decision titled as Chennai Kulalars Co- operative Credit Society Ltd. vs. DCIT (ITA No.712/Chny/2022 dated 12.10.2022). A copy of the same has been placed on record. The ld. Sr. DR, on the other hand, submitted that such an adjustment was permissible. Having heard rival submissions, the appeal is disposed-0ff as under.
We concur with the submission of Ld. AR that this issue in covered in assessee’s favor by the cited decision wherein it was held by the co-ordinate bench as under: - 3. The relevant provisions of Section 143(1)(a) prescribing processing of return of income (as amended by Finance Act, 2018), as applicable to AY 2018- 19, read as under: 143(1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely:— (a) the total income or loss shall be computed after making the following adjustments, namely:— (i) any arithmetical error in the return; (ii) an incorrect claim, if such incorrect claim is apparent from any information in the return; (iii) disallowance of loss claimed, if return of the previous year for which set off of loss is claimed was furnished beyond the due date specified under sub-section (1) of section 139; (iv) disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return; (v) disallowance of deduction claimed under sections 10AA. 80-IA. 80- IAB. 80-IB. 80-IC. 80-ID or section 80-IE. if the return is furnished beyond the due date specified under sub- j section (1) of section 139; or (vi) addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the return:
It could be seen that sub-clause (v) covers only specified Sections and do not cover Sec.80P. In other words, no adjustment of deduction claimed u/s 80P could have been made while processing the return of income.
The sub-clause (v) has been amended by Finance Act, 2021 and the amended sub-clause read as under: - …… (v) disallowance of deduction claimed under section 10AA or under any of the provisions of Chapter VI-A under the heading "C.—Deductions in respect of certain incomes", ifthe return is furnished beyond the due date specified under sub-section (1) of section 139: or ……. Section 80P fall under Chapter VI-A under the heading “C-Deductions in respect of certain incomes”. The rational for the amendment, as given in the memorandum explaining the provisions in the Finance Bill, 2021 is as under: - Rationalisation of the provision relating to processing of returned income and issuance of notice under sub-section (2) of section 143 of the Act. The existing provisions of clause (a) of sub-section (1) of section 143 of the Act provides that at the time of processing of return of income made under section 139, or in response to a notice under sub-section (1) of section 142, the total income or loss shall be computed after making the adjustments specified in clauses (i) to (vi) therein. It is proposed to amend the following provisions of sub-section (1) of section 143 of the Act,- (i) Amend sub-clause (iv) of clause (a) of sub-section (1) of the section 143 of the Act, to allow for the adjustment on account of increase in income indicated in the audit report but not taken into account in computing the total income. (ii) Amend sub-clause (v) of clause (a) of sub-section (1) of the section 143 of the Act so as to give consequential effect to amendment carried out in section 80 AC vide Finance Act, 2018. (iii) Amend the provisions of section 143 to reduce the time limit for sending intimation under sub-section (1) of section 143 of the Act from one year to nine months from the end of the financial year in which the return was furnished. Consequently, it is also proposed to reduce the time limit for issue of notice under sub-section (2) of section 143 of the Act from six months to three months from the end of the financial year in which the return is furnished. These amendments will take effect from 1st April, 2021 5. It could thus be seen that the enabling provisions allowing specified adjustment for Sec. 80P u/s 143(1)(a) has been brought on statute only with effect from 01.04.2021 and before that no such adjustment of deduction u/s 80P could have been done by the CPC u/s 143(1)(a) even if the return of income was filed beyond due date as specified u/s 139(1). No doubt, the provisions of Sec.80AC mandate denial of deduction u/s 80P even for AY 2018-19. However, in our considered opinion, without there being corresponding enabling provisions u/s 143(1)(a), no such adjustment could have been made by CPC for AY 2018-19. The same is amply clear from the memorandum explaining the provisions in the Finance Bill, 2021 as extracted above. Considering the same, we direct revenue 4 - to grant deduction u/s 80P as claimed by the assessee in the return of income. No other ground has been urged before us. The appeal stand partly allowed. 6.
In the absence of any contrary decision on record, we direct revenue to grant impugned deduction to the assessee. 3. The appeal stand allowed in terms of our above order. Order pronounced on 26th April, 2023.