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Facts
The Assessee declared 'Nil' income after claiming a deduction of Rs. 32,98,980/- under section 80P of the Act. The Assessing Officer (AO) disallowed this deduction, treating it as income from business or profession. The Assessee's subsequent application under section 154 and the first appeal were rejected by lower authorities.
Held
The Tribunal noted that the Assessee claimed the same deduction was allowed in previous years without factual differences. While acknowledging the issue might be debatable, the Tribunal held that tax cannot be levied without authority of law. Thus, the deduction under section 80P should be allowed, subject to verification.
Key Issues
Whether the deduction claimed under section 80P of the Income Tax Act, 1961, for AY 2019-20 is admissible.
Sections Cited
80P, 250, 143(1), 154, 265
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, NAGPUR BENCH “SMC”, NAGPUR
Before: SHRI NARENDER KUMAR CHOUDHRY
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 13.03.2025, impugned herein, passed by the National Faceless Appeal Center (NFAC)/ Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2019-20.
M/s. Akola Zillha Nayayalayin Karamchari Sahakari Pat Sanstha Maryadit 2. In the instant case, the Assessee by filing its return of income for the assessment year under consideration on dated 29.09.2020 had declared total income at “Rs.Nil” after claiming deduction of Rs.32,98,980/- u/s 80P of the Act, which was processed by the CPC/Assessing Officer (AO) vide order dated 04.01.2021 u/s 143(1) of the Act determining the total income at Rs.32,98,980/- by disallowing the claim of deduction u/s 80P of the Act being income from business or profession.
The Assessee, being aggrieved, preferred an application u/s 154 of the Act before the CPC/AO and thereafter on failure, filed first appeal before the Ld. Commissioner, however, both the authorities below refused to entertain the claim of the Assessee mainly on the ground that the issue needs deep scrutinization of documents to reach the conclusion apart from there being possibility or multiple options on this issue. Also, the reasons and basis of allowability of deduction u/s 80P of the Act may defer every year. Since the same is not a mistake apparent from record and rather requires deliberation on various aspects of the case as well as documentary evidences and the Assessee’s previous application u/s 154 of the Act has already been rejected by the CPC. Thus, there is no mistake from record, which is said to be rectified.
This Court has given thoughtful considerations to the peculiar facts and circumstances of the case. The Assessee before this Court has claimed that in the previous assessment years the identical claim has also been allowed by the Revenue Department and there is no factual difference in the instant year and the previous years, when the identical claim has been allowed. On the contrary the Ld. DR refuted the claim of the Assessee. This Court has given thoughtful consideration to rival claims of the parties. No doubt the issue involved appears to be debatable, however, it is the mandate M/s. Akola Zillha Nayayalayin Karamchari Sahakari Pat Sanstha Maryadit of the law, as enshrined in Article 265 of the Constitution of India that no tax can be levied except by authority of law and therefore in the considered opinion of this Court, the claim of the Assessee qua deduction claimed u/s 80P of the Act is liable to be allowed on the basis of parity as well but subject to verification. Thus, on the aforesaid reasons, thus the orders passed by the authorities are set aside and the case is remanded to the file of the AO for verification of Assessee’s claim and decision on merit.
In the result, the appeal filed by the Assessee is allowed for statistical purposes.
Order pronounced in the open court on 27.06.2025.