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Facts
The assessee's appeal was filed with a delay of 1291 days. The deduction under Section 80P of the Income Tax Act for AY 2018-19 was denied by the CPC due to belated filing of the return, invoking Section 80AC. The assessee contended that the CPC's adjustment was made prior to the Finance Act, 2021 amendment and that their case is covered by previous tribunal decisions.
Held
The Tribunal condoned the significant delay in filing the appeal, citing bonafide reasons and a justice-oriented approach, supported by apex court judgments. The Tribunal held that the denial of deduction under Section 80P by the CPC via intimation under Section 143(1)(a)(v) was erroneous as the amendment to Section 143(1)(a)(v) was prospective and effective from April 1, 2021, while the denial was based on pre-amendment provisions or incorrect application of Section 80AC.
Key Issues
Whether the denial of deduction under Section 80P by CPC invoking Section 80AC in an intimation under Section 143(1)(a) for AY 2018-19, when the return was filed belatedly, is valid, considering the prospective amendment of Section 143(1)(a)(v) by the Finance Act, 2021?
Sections Cited
80P, 80AC, 143(1)(a), 250, 139(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, NAGPUR “SMC” BENCH : NAGPUR
Before: DR. MANISH BORAD
This appeal at the instance of the assessee is directed against the order of Learned Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”], dated 13/08/2021 passed u/s. 250 of the Income Tax Act, 1961 (for short, 'the Act') which is arising out of intimation dated 31.05.2019 passed u/s. 143(1)(a) of the Act for the Assessment Year 2018-19. (A.Y.)
Registry has informed that there is a delay of 1291 days in filing the instant appeal. Application for condonation of delay along with affidavit has been filed and placed on record.
2 ITA.No.313/NAG/2025 (FDCM Karmachari Sahaka) Ld. Departmental Representative (DR) opposed for condonation of delay. I have gone through the contents of the affidavit and the reasons stated for delay and find that the same are reasonable cause and the assessee had bonafide reason giving rise to this delay and also find that the delay is not intentional and the assessee has not gained delay in filing the appeal. Therefore, adopting a justice oriented approach and also taking guidance from the judgments of Hon’ble Apex Court in the case of Collector, Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors. [(1987) 2 SCC 107] and in the case of Inder Singh Vs. State of Madhya Pradesh judgment dated 21.03.2025 (2025 INSC 382), I hereby condone the delay of 1291 days in filing of the instant appeal before this Tribunal and admit the appeal for adjudication.
At the outset, learned counsel for the assessee stated that even though various grounds of appeal have been raised, however, since Ld.CIT(A) has not considered the submissions filed by the assessee, prayer made to afford one more opportunity to go before the Ld.CIT(A) for necessary adjudication of the issues raised on merits.
Ld. DR did not object the request made by the learned counsel for the assessee.
I have heard rival contentions and perused the records placed before me. The assessee is a cooperative society and
3 ITA.No.313/NAG/2025 (FDCM Karmachari Sahaka) deduction u/s. 80P of the Act claimed in the return of income for the A.Y. 2018-19 has not been allowed to the assessee by Centralized Processing Centre (CPC) because return has been filed belatedly and deduction has been denied invoking the provisions of section 80AC of the Act. Assessee preferred appeal before the Ld.CIT(A), but the details filed by the assessee are stated to have been not considered by the Ld. CIT(A). Learned counsel for the assessee submitted that case of the assessee is squarely covered in plethora of decisions consistently holding that the powers to make prima-facie adjustments made by the CPC in the intimation u/s. 143(1)(a)(v) of the Act denying deduction u/s. 80P(2)(a)(i) of the Act on account of delay in filing the return of income invoking section 80AC of the Act have been brought in by the Finance Act, 2021 w.e.f. 01.04.2021. Further, reference has been made in plethora of decisions including the decision of this Tribunal in the case of Food Corporation of India Employees Co-op. Credit Society Ltd. vs. ADIT in ITA No. 422/NAG/2022, dated 22.03.2024.
On perusal of the record it remains on undisputed fact that assessee furnished return of income on 25.12.2018 i.e. beyond due date of 31.08.2018, deduction u/s. 80P(2)(a)(i) of the Act has been denied by the CPC in the intimation u/s. 143(1)(a) of the Act framed on 31.05.2019 i.e. prior to 01.04.2021. In the case of Food Corporation of India Employees
4 ITA.No.313/NAG/2025 (FDCM Karmachari Sahaka) Co-op. Credit Society Ltd. (supra), the findings of this Tribunal reads as under:-
“3. I find no merit in the Revenue’s arguments in respect of impugned sec.80P deduction disallowance made in assessee’s hands. This is for the precise reason that legislature has introduced such a disallowance provision in sec.143(1)(a)(v) dealing with deduction claim(s) provided in Chapter-VI-A of the Act by way of Finance Act, 2021 w.e.f. 01.04.2021 with prospective effect whereas the assessment year herein is 2017-2018 only. So far as the Revenue’s case quoting sec.80AC is concerned (supra), it would be very much relevant to observe that once the legislature itself has made the impugned provision in sec.143(1)(a)(v); the same could not have led to the assessee’s 80P deduction disallowance in summary “processing”. Hon’ble Madras high court’s decision in Veerappampalayam Primary Agricultural Cooperative Credit Society (supra), is also found to be distinguishable on facts as their lordships’ had dealt with assessment year 2018-2019 vide judgment dated 07.04.2021 thereby not having benefit of the amendment made in the Finance Act, 2021 in foregoing terms. That being the clinching fact that sec.143(1)(a)(v) itself is not applicable in assessee’s case specifically dealing with filing of a sec.139(1) return, sub-clause(ii) could not be pressed in action being in the nature of a general provision only. I adopt principles of stricter interpretation as per Commissioner vs. Dilip Kumar And Co. & Ors. [2018] 9 SCC 1 (SC) (FB) to conclude that both the learned lower authorities action disallowing the assessee’s sec.80P deduction(s) claim(s) by way of sec.143(1)(a)(ii) or 143(1)(a)(v) “processing” has to be reversed. Ordered accordingly. 4. This assessee’s appeal is allowed in above terms.”
In the light of above findings of this Tribunal, I find that the same is squarely applicable on the facts of the instant case and the assessee’s case is squarely covered by the above decision. Therefore, I find no reason to restore the issues on merits to the file of the Ld.CIT(A) and I am inclined to hold that CPC grossly erred in making the alleged adjustments of denying deduction u/s. 80P of the Act in the order u/s. 143(1)(a)(v) of the Act issued prior to 01.04.2021 in the
5 ITA.No.313/NAG/2025 (FDCM Karmachari Sahaka) intimation issued on 31.05.2019. Thus, the finding of the Ld.CIT(A) is set aside and the deduction claimed u/s. 80P of the Act at ₹ 13,47,997/- is allowed. Effective grounds of appeal raised by the assessee on merits of the case are allowed as per terms indicated herein above.
In the result, appeal of the Assessee is allowed.
Order pronounced in the open Court on 03.02.2026
Sd/- Sd/- [MANISH BORAD] ACCOUNTANT MEMBER Dated : 03rd February, 2026 vr/- Copy to
The appellant 2. The respondent 3. The Pr.CIT, Nagpur concerned. 4. D.R. ITAT, SMC Bench, Nagpur. 5. Guard File.
By Order //True Copy //
Senior Private Secretary ITAT, Nagpur