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Facts
The assessee's appeal pertains to AY 2018-19 and is directed against an order confirming the disallowance of deduction under Section 80P. The disallowance was made by CPC, Bengaluru for delay in filing the Income Tax Return. The assessee faced a delay of 182 days in filing the appeal, which was condoned by the Tribunal.
Held
The Tribunal held that prior to 01.04.2021, CPC could not make prima facie adjustments for disallowing deduction under Section 80P for delay in filing the return, as the relevant legislative amendment was prospective. Consequently, the disallowance made by CPC and confirmed by CIT(A) was set aside.
Key Issues
Whether CPC could disallow deduction under Section 80P for delay in filing the return prior to the amendment effective from 01.04.2021?
Sections Cited
80P, 250, 143(1), 139(1), 80AC, 143(1)(a)(ii), 143(1)(a)(v)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, SMC BENCH, PUNE
Before: Dr. MANISH BORAD
Assessee by : Shri Vinay Kawaia (Through Virtual) Revenue by : Shri Deepak Kumar Kedia, JCIT Date of hearing : 09.07.2025 Date of : 16.07.2025 pronouncement आदेश/ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
This appeal at the instance of assessee pertaining to Assessment Year 2018-19 is directed against the order passed by the Ld. CIT(A) National Faceless Appeal Centre, (NFAC) Delhi u/s 250 of the Income-Tax Act, 1961 dated 27.09.2024 which in turn is arising out of the Assessment Order passed u/s 143(1) dated 13.05.2019 of the Income Tax Act, 1961.
A. Registry has informed that the present appeal is delayed by 182 days. Application for condonation of delay alongwith affidavit and the evidence about the medical treatment of Mr. Bhagyesh Hari Dhakne, Director of the assessee society is placed on record. After going through the application and also hearing the Ld. Departmental Representative (DR), I observe that reasonable cause gave rise to the said delay. The Hon’ble Apex Court in the case of Inder Singh Vs State of Madhya Pradesh judgement dated 21.03.2025 (2025 INSC 382) condoned the delay of 1537 days on observing that the delay was unintentional and less due to deliberate laches and was well explained. Hon’ble Court also held that in case where the merits are consistent, a more liberal approach may be adopted for the examination of the case on its merits. Having gone through the averments made in the affidavit and considering the ratio laid down by the High Court in the case of Inder Singh (Supra) , I am of the view that reasonable cause prevented the assessee in filing the appeal within the stipulated time and therefore of 182 days in filing of appeal is condoned and admit the appeal for adjudication.
Assessee has raised following grounds of appeal:- 1) Under the facts and circumstances of the case and in law the learned CIT(A). NFAC has erred in confirming the disallowance of deduction of Rs. 18.98.260/- made by CPC, Bengaluru u/s 80P due to delay in filing ITR for AY 2018-19. 2) The learned CIT(A),NFAC erred in not appreciating the fact that the appellant Co-operative society is an eligible person under the provisions of IT Act, 1961 to claim deduction under s. 80P on merit and the same should not be disallowed merely because of the fact that there is a delay in filing the return for therelevant assessment year under consideration. Hence no disallowance was warranted on the fact of the case. 3) The learned CIT(A) erred in confirming the disallowance of deduction u/s 80P made by CPC by erroneously treating the same as "incorrect claim" u/s 143(1)(a)(ii)r.w.s. 80AC(ii) of the Act. Reliance is placed on NRB Bearings Sevakanchi Patsanstha vs. ADIT, CPC [ITA No. 422/PUN/2024(Pune)]. 4) The appellant craves the permission to add, amend, modify, alter, revise, substitute, delete any or all grounds of appeal, if deemed necessary at the time of hearing of the appeal.
At the outset Ld. Counsel for the assessee referring to the 3. decision of this Tribunal in the case of NRB Bearings Sevakachi Patsanstha vs.ADIT, CPC (ITA No. 422/PUN/2024) dated 12.06.2024 (PUNE) and the other decision in the case of Finolex Industries Ltd. Employees Co-operative Credit Society Ltd. Vs ITO (ITA No. 76/PUN/2023 dated 03.04.2023) submitted that the Ld. CIT(A) erred in confirming the disallowance of deduction u/s 80P of Rs. 18,98,260/- made by CPC, Bangalore for delay in filing the I.T. return for A.Y. 2018- 19 without considering that such powers were given to CPC by making necessary amendment in section 143(1)(a)(v) from 01.04.2021 onwards.
On the other hand Departmental Representative (DR) vehemently argued supporting the orders of Ld. CIT(A).
I have heard rival contentions and perused the record placed before me. Admittedly the assessee society has filed the return of income on 06.12.2018 which is after the due date of filing the return u/s 139(1) i.e. 30.09.2018. As per section 80AC of the Act for claiming deduction u/s 80P of the Act assessee is required to furnish the return of income within the due date prescribed u/s 139(1). However the return of the assessee has been processed by CPC, u/s 143(1) of the Act. Now CPC has to process the return strictly as per section 143(1)(a) and in the said section upto 31.03.2021 there had been no specific provisions for making Prime Facie adjustments for disallowing deduction claimed u/s 80P of the Act. Therefore prior to 01.04.2021, CPC could not make Prime-Facie adjustments by disallowing deduction u/s 80P of the Act for delay in filing the return. This issue has been dealt by this Tribunal on number of occasions. In the written submissions, assessee has referred and relied on the decision of this tribunal in the case of NRB Bearings Sevakachi Patsanstha (Supra) and Finolex Industries Ltd. Employees Co- op Credit Society Ltd. (Supra), wherein it has been held that the legislature has introduced such disallowance provisions in section 143(1)(a)(v) dealing with deduction claim(s) provided in Chapter VIA of the Act by way of Finance Act, 2021 w.e.f 01.04.2021 with prospective effect and therefore prior to 01.04.2021 the disallowance u/s 80P of the Act cannot be made in the returns processed u/s 143(1)(a) of the Act. Respectfully following the same and taking a consistent view, I hereby hold that Ld. CIT(A) erred in affirming the action of the CPC. Finding of the Ld. CIT(A) is set aside and disallowance of deduction u/s 80P of the Act is hereby deleted. Grounds of appeal raised by the assessee allowed as per terms indicated above.
In the result, appeal of the assessee is allowed for as per terms indicated above.
Order pronounced on this 16th day of July, 2025.