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Facts
The assessee filed its return of income for AY 2019-20, claiming a deduction of ₹40,07,277 under section 80P. The CPC processed the return under section 143(1) and disallowed this deduction, citing the return being filed belatedly. The CIT(A) upheld this disallowance.
Held
The Tribunal held that the intimation under section 143(1) was issued on 29.09.2020, before the amendment to section 143(1)(a)(v) of the Act, which allowed disallowance for belated returns, came into effect on 01.04.2021. Therefore, the CPC lacked the jurisdiction to make such a disallowance at that time. The disallowance was deemed invalid and bad in law.
Key Issues
Whether the CPC had the jurisdiction to disallow a deduction under section 80P for a belated return processed prior to the amendment inserting such power in section 143(1)(a)(v).
Sections Cited
143(1), 80P, 139(1), 250, 143(1)(a)(v)
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Income Tax Appellate Tribunal, ‘D’ BENCH KOLKATA
Before: Shri Sonjoy Sarma & Shri Rakesh Mishra
Assessment Year: 2019-20 Satgram R Collery Employees Cooperative Credit Society Ltd……....Appellant Satgram Project, P.O Debichand Nagar, Block-Jamuria-1, Asansol, W.B. 713332. [PAN: AAJAS8427K] vs. ACIT, Circle-1, Asansol……..……………....…..………………….…..... Respondent Appearances by: Shri Abhijit Banerjee, Advocate, appeared on behalf of the appellant. Shri S. B. Chakraborty, Addl. CIT, Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : November 24, 2025 Date of pronouncing the order : November 25, 2025 आदेश / ORDER
Per Sonjoy Sarma, Judicial Member:
This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre (hereinafter referred to as “ld. CIT(A)”) dated 03.02.2025 passed under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”).
At the time of hearing of the matter, the learned representative submitted that there was a delay of 115 days in filing the appeal. In this connection, the assessee filed an affidavit explaining the reasons for the delay. After considering the submissions of the assessee and examining the contents of the affidavit, we are satisfied that the reasons for the delay are bona fide and deserve to be condoned.
Satgram R Collery Employees Cooperative Credit Society Ltd 3. Brief facts of the case are that the assessee filed its return of income for A.Y. 2019–20 on 18.06.2022, declaring total income of ₹40,07,277. The Centralized Processing Centre (CPC) processed the return under section 143(1) of the Act and disallowed deduction under section 80P of the Act amounting to ₹40,07,277 on the ground that the assessee had not filed the return within the time prescribed under section 139(1) of the Act.
Aggrieved, the assessee filed an appeal before the CIT(A), who sustained the disallowance.
The assessee is now in further appeal before the Tribunal. The assessee contends that the intimation under section 143(1) dated 29.09.2020 was passed before the amendment to section 143(1)(a)(v) of the Act came into effect on 01.04.2021. Prior to 01.04.2021, CPC did not possess the power to disallow claims under Chapter VI-A, including section 80P of the Act, merely for filing a belated return. Therefore, the disallowance of deduction u/s 80P of the Act is without legal authority and the order of the CIT(A) sustaining such disallowance is bad in law.
On the other hand LD. DR. supported the order of the Authority below but could not controvert the fact.
We have considered the submissions parties and examined the material available on record. It is an undisputed fact that the CPC passed the intimation under section 143(1) of the Act on 29.09.2020. The enabling provision permitting disallowance of deductions under Chapter VI-A for delayed filing of the return was inserted in section 143(1)(a)(v) of the Act with effect from 01.04.2021. Thus, on the date when the assessee’s return was processed, the statutory power to make such an adjustment did not exist. The Hon'ble High Courts and Satgram R Collery Employees Cooperative Credit Society Ltd Tribunals have consistently held that a statutory amendment cannot apply retrospectively to intimation orders passed before the amendment date. As the CPC lacked jurisdiction to make the adjustment at the relevant time, the disallowance under section 80P of the Act is invalid. The CIT(A), without appreciating this legal position, erred in sustaining the adjustment is bad in law. In view of the above, we hold that the disallowance of ₹40,07,277 under section 80P of the Act made in the intimation u/s 143(1) and sustained by the CIT(A) is bad in law. Accordingly, the order of the CIT(A) is set aside, and the CPC is directed to allow the deduction under section 80P of the Act as claimed by the assessee.