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Facts
The assessee filed a return of income claiming a deduction of Rs. 6,12,386/- under section 80P. The CPC disallowed this claim while processing the return under section 143(1)(a), stating the return was filed belatedly. The assessee's appeals to the NFAC and CIT(A) were unsuccessful.
Held
The Tribunal held that the disallowance of the section 80P deduction was not justified because the amendment to section 143(1)(a)(v) was effective from April 1, 2021, and therefore not applicable to AY 2019-20. The return was filed within the permissible extended time under section 139(4).
Key Issues
Whether the disallowance of deduction under section 80P is justified when the return was filed under section 139(4) and the CPC made the adjustment beyond its scope under section 143(1) for AY 2019-20.
Sections Cited
80P, 143(1)(a), 139(4), 143(1), 250, 143(1)(a)(v), 80AC, 139(1)
AI-generated summary — verify with the full judgment below
PER PAWAN SINGH, JUDICIAL MEMBER;
This appeal by assessee is directed against the order of Ld. CIT(A)/ADDL/JCIT (A) – 2, Ahmedabad dated 17.02.2025 for assessment year (AY) 2009-10. The assessee has raised following grounds of appeal:
“1) The appellant had filed their Return of Income declaring income at Rs. 1,36,780/-
2) While filing return of income, amount of Rs. 6,12,386/- was claimed as deduction u/s 80P of Income Tax Act, 1961.
3) Intimations u/s 143 (1) (a) were passed disallowing above claim u/s 80P of Income Tax Act, 1961.
4) Last intimation disallowing the said claim was dated 16.02.2024.
5) Against the said intimation, appellant had preferred an appellant to NFAC.
6) The point in appeal was that section 80P deduction cannot be denied u/s 143 (1) (a) (v) for the simple reason that this provision was not in force during A.Y 2019-20.
7) NFAC while passing order u/s 250 of Income Tax Act, 1961 rejected appeal on grounds that return was filed beyond time and hence no deduction u/s 80P of Income Tax Act, 1961 can be allowed.
8) The Appellant craves leave to alter and/or add grounds as and when necessary.”
Rival submissions of both the parties have been heard and record perused.
The ld. AR of the assessee submits that the assessee filed return of income within extended time period under section 139(4). The return was processed under section 143(1a). The CPC while processing return of income not allowed deduction under section 80P of Rs. 6,12,386/-. The assessee filed application for rectification which was also rejected. The ld. CIT(A) also upheld the action made by CPC by taking view that return of income was filed belatedly. The adjustment made by CPC was beyond the scope of section 143(1). The ld. AR of the assessee submits that once the CPC has no authority to make such adjustment therefore, adjustment/addition is liable to be deleted. The amendment made in section 143(1a) is applicable / effective from 01.04.2021. Accordingly, the denial of deduction under section 80P was not justified. To support his submission, the ld. AR of the assessee relied upon the decision of Tribunal in Premier Co-operative Credit Society Ltd. vs dated 20.08.2024, Vishva Villa Co-op Housing Society Ltd. vs ITO in to 684/M/2024 for A.Y. 2012-13 to 2014- 15, Sahkari Ganna Vikas Samiti Ltd. vs ACIT (2024) 169 taxmann.com 300 (Lucknow – Trib.) for A.Y. 2019-20 and Medi Seva Sahkari Mandali Ltd. vs ADIT (CPC) (2023) 146 taxmann.com 3 (Rajkot – Trib).
On the other hand, the learned Senior Departmental Representative (ld. Sr.
DR) for the revenue supported the order of lower authorities. The ld. Sr. DR submits that assessee has not filed return of income under section 139(1), rather filed under section 139(4).
I have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. I have also deliberated on various case laws relied by ld. AR of the assessee. I find that assessee has filed return of income under section 139(4) within due date permissible under said sub-section. It is settled position in the law that when return was filed within due date permissible under section 139(4) and claim deduction under section 80P, deduction cannot be denied only on the basis that assessee did not file within due date. Similar view was taken by Division Bench of Rajkot Tribunal in Medi Seva Sahkari Mandali Ltd. vs ADIT (CPC) (supra). I further find that amendment to section 143(1)(a)(v) enabling disallowance of deduction claimed under Chapter VI-A was made by Finance Act, 2021 with effect from 01.04.2021 and thus, assessee’s claim for deduction under section 80P for Assessment Year 2019-20 was not hit by section 80AC.
Similar view was taken in a series of decision by Division Bench of Tribunal including in Sahkari Ganna Vikas Samity Ltd. vs ACIT (supra) and Vishva Villa Co-op Housing Society Ltd. vs ITO (supra). Thus, respectfully following the decisions of Division Benches of Tribunal, the assessing officer is directed to allow deduction under section 80P to the assessee. In the result, grounds of appeal of assessee are allowed.
In the result, the appeal of assessee is allowed.