Department's rectification application rejected as no apparent mistake found in allowing section 80P deduction previously denied through prima facie adjustment

ITAT Rajkot dismissed the Department's rectification application under section 254. The Department challenged ITAT's earlier decision allowing section 80P deduction to the assessee, arguing it was wrongly denied through prima facie adjustment under section 143(1)(a)(v) for AY 2019-20. ITAT found no apparent mistake in its original order, noting it had provided detailed factual and legal findings explaining why the deduction denial through prima facie adjustment was improper. 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.

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Issues:
The Department filed a Miscellaneous Application against the ITAT order denying deduction u/s. 80P based on belated filing of return.

Summary:
The Department contended that the ITAT did not consider the binding decision of Madras High Court regarding denial of claims in case of belated returns. The ITAT, however, noted that the amendment in section 143(1)(a)(v) post-April 1, 2021, does not apply to the assessment year in question, 2019-20. The ITAT emphasized that denial of claim under section 80P does not fall under prima facie adjustment under section 143(1)(a)(v) for the relevant assessment year. The ITAT also analyzed the scope of adjustments under section 143(1)(a)(ii) and concluded that the case did not warrant denial of deduction under section 80P. The ITAT referred to previous judicial decisions supporting the acceptance of belated returns for deduction claims under section 80P. Consequently, the ITAT allowed the appeal and remanded the case for fresh adjudication by the CIT(Appeals).

The ITAT provided a detailed legal and factual analysis supporting its decision to disallow the Department's claim for deduction denial under section 80P. The ITAT found no apparent mistake in its order and dismissed the Department's Miscellaneous Application.

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