THE SATARA ZILLA KRISHI BANK KARMACHARI SAHAKARI PATSANSTHA LTD,SATARA vs. ACIT , SATARA

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ITA 1219/PUN/2026Status: DisposedITAT Pune15 July 2026AY 2019-206 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the CPC order was bad in law due to the contradictory disallowance and allowance of the same deduction. It was also noted that Section 143(1) has limitations on the adjustments that can be made.

What were the facts?

The assessee claimed deductions under Section 80P. The processing of the return under Section 143(1) by the CPC showed contradictory outcomes, allowing the deduction on one page and disallowing it on another. The appeal before the CIT(A) was dismissed due to delay.

What were the issues?

Whether the CPC has the jurisdiction to disallow a deduction under Section 143(1) when the order shows contradictory outcomes and whether the delay in filing the appeal before the CIT(A) should have been condoned.

Which sections of the Income-tax Act were involved?

Section 80P,Section 139(1),Section 143(1),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE

Before: SHRI PAVAN KUMAR GADALE & SHRI Dr. DIPAK P. RIPOTE

For Appellant: Ms. Renuka Ghatge
For Respondent: Ms. Bhavya. I.V., Jt. CIT

आदेश /ORDER

PER Dr. DIPAK P. RIPOTE, A.M : This is an appeal filed by the assessee against the order of the Learned Additional/Joint Commissioner of Income Tax (Appeals)-1, Ahmedabad [Ld. Addl./JCIT(A)], passed u/s. 250 of the Income Tax Act, 1961 (‘the Act’) for AY 2019-20 on 28.01.2026.

Findings and analysis:

2.

We have heard both the parties and perused the record. In this case, the assessee had filed return of income for AY 2019-20 on 23.09.2019 and due date for filing return of income as per section 139(1) of the Act was 30.09.2019. Accordingly, the return of income was filed u/s 139(1) of the Act. The assessee had claimed deduction u/s 80P(2)(a)(i) of the Act of Rs.1,13,00,425/-. The assessee also claimed deduction u/s 80P(2)c) of the Act of Rs.50,000/-. Thus, the deduction claimed by the assessee under Chapter VI-A was Rs.1,13,50,425/-. However, the return

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of income was processed u/s 143(1) of the Act by the Centralized Processing Center, Bengaluru (CPC).

2.1 Aggrieved by the order passed by the CPC u/s 143(1) of the Act, the assessee filed an appeal before the Ld. CIT(A). There was a delay in filing of the appeal before the Ld. CIT(A). The assessee pleaded before the Ld. CIT(A) that the assessee had filed an application for rectification u/s 154 of the Act with CPC. The Ld. AR pleaded that the assessee was pursuing an alternate remedy. The Ld. AR also pleaded that it was a Covid period and the Hon’ble Supreme Court had extended all the dates. However, the Ld. CIT(A) dismissed the appeal of the assessee on account of delay in filing of the appeal.

2.2 Aggrieved by the order u/s 250 of the Act, the assessee filed an appeal before this Tribunal.

2.3 In this case, the Ld. AR took us through the order u/s 143(1) of the Act and submitted that the CPC has allowed the assessee’s claim for 80P which is in Schedule 80P. The Ld. AR took us through the relevant page to demonstrate the same. However, the Ld. AR submitted that at another page the CPC has denied the assessee’s claim for deduction u/s 80P of the Act. The Ld. AR submitted that thus in the same order, the CPC has allowed the assessee’s claim of 80P in one page and disallowed it in another page. The Ld. AR submitted that this shows that the order is bad in law. The Ld. AR further submitted that even otherwise section 143(1) of the Act, the CPC do not have any jurisdiction to verify the assessee’s claim for deduction under Chapter VI-A of the Act. The Ld. AR submitted that the assessee’s appeal may kindly be allowed.

3.

The Ld. DR supported the order of the First Appellate Authority and the CPC.

4.

In this case, admittedly, the assessee is a Credit Co-operative Society of employees of The Satara Zilla Krishi Bank. It is also observed that the assessee has earned interest income from The Satara District Co-operative Bank. In this case, admittedly, the return of income was filed by the

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assessee u/s 139(1) of the Act. We have carefully studied order u/s 143(1) of the Act and noted that the CPC had allowed assessee deduction u/s 80P of the Act. The said page is scanned and reproduced here as under :

4.1 However, at page No. 24, the CPC has disallowed the assessee’s claim of deduction under Chapter VI-A which is scanned and reproduced here as under :

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4.2 We have carefully studied the order u/s 143(1) of the Act but could not find any specific reason for such discrepancies. The Ld. DR also could not explain us. It is observed that the Ld. CIT(A) has merely dismissed the appeal of the assessee on account of delay without understanding the

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basic facts that the assessee was pursuing an alternate remedy in the form of rectification. In this case, the CPC has erroneously disallowed the assessee’s claim for deduction u/s 80P of the Act of Rs.1,13,50,425/-. We have already mentioned that the CPC has not given any reason for such disallowance. We have already reproduced above that the CPC has at one place allowed the assessee’s claim of deduction u/s 80P of the Act of Rs.1,13,50,425/- and at another page disallowed the assessee’s deduction u/s 80P of the Act of Rs.1,13,50,425/-. Thus, Rs.1,13,50,425/- has been allowed as well as disallowed. This explains that the CPC has not considered the facts of the case properly. Therefore, we are of the considered opinion that the order passed by the CPC is bad in law.

5.

Even otherwise as per section 143(1) of the Act only limited adjustments are possible. The relevant part of section 143(1) of the Act is reproduced here as under : “(1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, - (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 [or increase in income] indicated in the audit report but not taken into account in computing the total income in the return; (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", if] the return is furnished beyond the due date specified under sub-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: Provided that no such adjustments shall be made unless an intimation is given to the assessee of such adjustments either in writing or in electronic mode:” s

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5.1 Thus, as per section 143(1) of the Act only arithmetical error or incorrect claims can be disallowed or other disallowance as mentioned in section. In this case, there is no material before the CPC to say that the assessee’s claim was incorrect. We have already mentioned that the CPC has not specified any reason. In these facts and circumstances of the case, we agree with the Ld. AR that the CPC has no jurisdiction to make any adjustment. We have also mentioned in earlier paragraphs that CPC had allowed assessee’s claim of deduction u/s 80P of the Act in the order u/s 143(1) of the Act in one page and disallowed the same in another page. Therefore, for all the reasons discussed above, we direct the AO to allow deduction u/s 80P of the Act as claimed of Rs.1,13,50,425/-. Accordingly, the grounds of appeal raised by the assessee are allowed.

6.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open Court on 15th July, 2026

Sd/- Sd/- (PAVAN KUMAR GADALE) (Dr. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे/Pune; दिन ांक/Dated : 15-07-2026 Ravi Kumar Digitally signed by Ravi Kumar Ravi Kumar Date: 2026.07.15 17:20:06 +05'30' आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent 3. The concerned Pr. CIT, Pune 4. DR, ITAT, ‘B’ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अदिकरण,पुणे / ITAT, Pune

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