Section 80P deduction cannot be denied through prima facie adjustment under section 143(1)(a)(v) rectification application dismissed

ITAT Rajkot dismissed the Department's rectification application under section 254. The case involved denial of section 80P deduction through prima facie adjustment under section 143(1)(a)(v). ITAT had previously allowed the deduction after detailed factual and legal findings, concluding that section 80P deduction cannot be denied through prima facie adjustment under section 143(1)(a)(v) for AY 2019-20. The Department's cited precedent was distinguished as being decided on different facts and not addressing the specific issue of denial through section 143(1)(a)(v) adjustment. Finding no apparent mistake in the original order, ITAT rejected the Department's rectification plea.

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Issues involved:
The Department filed a Miscellaneous Application against the ITAT order in ITA No. 38/Rjt/2022, contending that deduction u/s. 80P cannot be denied to the assessee for not filing the return within the due date u/s. 139(1) of the Act. The Department argued that the ITAT did not consider the Madras High Court decision and that the Explanation to section 143(1)(a) cannot restrict the main provision. The assessee's counsel argued that the ITAT considered all aspects and amendments, stating that the Miscellaneous Application is beyond the scope of section 254(2) as there is no mistake in the ITAT's order.

Decision on the issue:
The ITAT considered whether deduction under section 80P can be denied if the return is filed beyond the due date under section 139(1) of the Act. It noted that amendments from 01-04-2021 do not apply to the relevant assessment year 2019-20. The ITAT found that denial of claim under section 80P does not fall under prima facie adjustment under section 143(1)(a)(v) as it was not in force during the assessment year. The ITAT also analyzed whether the case falls under prima facie adjustment under section 143(1)(a)(ii) and concluded that the claim of deduction cannot be denied solely based on late filing of the return.

Legal findings and reasoning:
The ITAT extensively discussed the statutory provisions, highlighting that denial of deduction under section 80P is not permissible solely due to late filing of the return. It referred to judicial precedents supporting the allowance of deductions even if claims were made in revised returns. The ITAT emphasized that in the case at hand, the delay in filing the return did not warrant denial of the deduction under section 80P. The ITAT restored the case to the CIT(A) for fresh adjudication, emphasizing the importance of judicial precedents and the interests of justice.

Final decision:
After thorough analysis, the ITAT dismissed the Department's Miscellaneous Application, citing that there was no apparent mistake in the ITAT's order in ITA No. 23/Rjt/2022. The decision was pronounced in the open court on 08-11-2023.

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