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Facts
Two assessees filed their income tax returns for AY 2018-19 after the due date, claiming deductions under Section 80P. The CPC disallowed these deductions, citing Section 80AC and an amendment to Section 143(1)(a)(v) of the Income Tax Act.
Held
The Tribunal held that prior to the amendment by the Finance Act, 2021, the CPC did not have the power to deny deductions under Section 80P solely because the return was filed beyond the due date. The amendment was prospective, and thus not applicable to AY 2018-19.
Key Issues
Whether the CPC can disallow deductions under Section 80P for returns filed beyond the due date, considering the amendment to Section 143(1)(a)(v) of the Income Tax Act.
Sections Cited
80P, 80AC, 139(1), 143(1)(a)(v), 143(1), 250
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Income Tax Appellate Tribunal, PUNE BENCHES “SMC”, PUNE
Before: DR.MANISH BORAD
Appellant by : Shri Vinay Kawadia (through virtual) Respondent by : Shri Deepak Kumar Kedia Date of hearing : 10.07.2025 Date of pronouncement : 23.07.2025 आदेश / ORDER
The captioned appeals at the instance of two different assessees pertain to A.Y. 2018-19 and are directed against the separate orders dated 12.04.2024 and 20.09.2024 of Addl/JCIT(A) Madurai/ Addl/JCIT(A)-1, Hyderabad passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of respective Intimation Orders dated 13.05.2019 passed u/s.143(1) of the Act.
Registry has informed that the appeals of the two assessee(s) before this Tribunal are time barred by limitation by 335 days and 182 days respectively. Assessee(s) have filed applications for and 1460/PUN/2025 Panchashil Majoor Sahakari Society Ltd. Navrang Majoor Sahakari Society Ltd. condonation of delay explaining the reasons which led to filing of appeals belatedly. After hearing both the sides and perusing the averments made in the condonation applications, I am satisfied that due to ‘reasonable cause’ assessees failed to file the appeals within the stipulated time limit. I therefore condone the delay of 335 days and 182 days in filing the appeals by the assessee(s) in light of Judgment of Hon’ble Supreme Court in the case of Collector, Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors. reported in (1987) 2 SCC 107 and proceed to adjudicate the issues raised in the instant appeals.
At the outset, Ld. Counsel for the assessee referring to both the appeals stated that the CPC has disallowed the deduction claimed by the assessees u/s.80P of the Act for A.Y. 2018-19 which is not in accordance with law because the powers have been given to the CPC by way of amendment brought in from 01.04.2021 subsequent to which CPC can deny deduction u/s.80P of the Act if the return of income is not filed within the statutory time limit provided u/s.139(1) of the Act. In support, Ld. counsel for the assessee placed reliance on the following decision of this Tribunal :
NRB Bearings Sevakachi Patsanstha Vs. ADIT – dated 12.06.2024 2. Finolex Industries Ltd. Employees Credit Society Ltd. Vs. ITO – order dated 03.04.2023
Ld. Departmental Representative failed to controvert the submissions advanced by ld. Counsel for the assessee.
I have heard the rival contentions and perused the record placed before me. I observe that the assessee(s) namely and 1460/PUN/2025 Panchashil Majoor Sahakari Society Ltd. Navrang Majoor Sahakari Society Ltd. Panchashil Majoor Sahakari Society Ltd. and Navrang Majoor Sahakari Society Ltd. have furnished their return of income for A.Y. 2018-19 on 04.12.2018 which is after the due date of 30.09.2018 claiming deduction u/s.80P of the Act at Rs.11,31,610/- and Rs.12,92,261/- respectively.
CPC while processing the returns for both the assessee(s) has denied the deduction u/s.80P of the Act by invoking section 80AC of the Act which provides that for claiming deduction u/s.80P of the Act, the return is to be filed before the due date prescribed u/s.139(1) of the Act. However, the issue is no longer res integra by virtue of catena of decisions rendered by this Tribunal including the cases relied upon by the ld. Counsel for the assessee wherein it has been held that prior to amendment brought in by Finance Act, 2021 in clause (v) of section 143(1)(a) of the Act, CPC had no powers u/s.143(1)(a)(v) of the act to deny the deduction u/s 80P of the Act even if the return of income is not filed within the statutory time limit provided u/s.139(1) the Act. For the sake of brevity, I proceed to extract the finding given by this Tribunal in the case of Finolex Industries Ltd. Employees Credit Society Ltd. (supra) which reads as follows :
“5. We have heard the submissions of the parties, considered the relevant materials/documents on record and analysed the facts and circumstances in Finolex Industries A.Y. 2019-20 this case. Section143(1)(a)(v) of the Act spells out that if any deduction is claimed under any of the provisions of Chapter VI-A which include deduction u/s 80P such deduction has to be allowed only if the return is filed within due date specified under sub-section 139(1) of the Act. In other words, if any return is filed beyond due date u/s 139(1) of the Act then no deduction u/s 80P shall be allowed. However, clause (v) was inserted by the Finance Act, 2021 w.e.f. 01-04-2021. The case of the assessee, on the other hand, is for F.Y. 2018-19 relevant to A.Y. 2019- 20 which is the period prior to amendment brought in by the Finance Act, 2021. Before this amendment, clause (v) did not include and cover deduction u/s 80P. So therefore, in the present Case of the assessee though admittedly return was filed beyond the time limit prescribed u/s 139(1) of the Act but still section 143(1)(a)(v) is not applicable to the and 1460/PUN/2025 Panchashil Majoor Sahakari Society Ltd. Navrang Majoor Sahakari Society Ltd. assessee since the case of the assessee is for A.Y. 2019-20, which is before the amendment. We also accept the argument of the ld. A.R for the assessee that even if the revenue intends to invoke clause (ii) of section 143(1)(a) that would also not be permissible since in the definition of incorrect claim as provided in the provision, the deduction u/s 80P is not included anywhere and is therefore, outside the purview of the said provision. Therefore, rigors of provisions of section 143(1)(a)(ii) and clause (v) are not applicable to the case of the assessee. On this legal ground itself, the assessee succeeds and any other grounds on merits, if any, becomes academic in nature.”
Respectfully following the above decision and following the rule of consistency, I hold that CPC erred in disallowing the deduction u/s.80P of the Act claimed by both the assessee’s under consideration for A.Y. 2018-19. Impugned orders for the appeals under consideration are set-aside and Jurisdictional Assessing Officer is directed to allow impugned deduction u/s.80P of the Act. Grounds of appeal raised by both the assessee (s) are allowed
In the result, both the appeals of the assessee(s) are allowed.
Order pronounced on this 23rd day of July, 2025.