Tribunal restores deduction claim under section 80P for fairness in tax assessments.

The Tribunal set aside the orders and restored the issue to the Assessing Officer for fresh consideration on the merits of the deduction under section 80P for the assessment year 2018-19. The Tribunal emphasized the importance of natural justice and directed the Assessing Officer to verify the claim under section 80P after affording the assessee an opportunity to present their case, ensuring due process and fairness in tax assessments.

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Issues:
1. Adjustment under section 143(1)(a)(v) disallowing deduction under section 80P of the Income Tax Act for assessment year 2018-19.
2. Violation of principles of natural justice by not affording an opportunity to the assessee to explain their case.

Analysis:
1. The appeal was filed by the assessee against the order of the Commissioner of Income Tax (Appeals) regarding the disallowance of deduction under section 80P of the Income Tax Act for the assessment year 2018-19. The assessee contended that the amendment to Section 143(1)(a)(v) was effective from 01/04/2021 and no adjustment could be made without seeking the explanation of the assessee. The Commissioner dismissed the appeal citing Section 80AC(ii) which disallows claims made after April 1, 2018, if the return was not filed within the due date under section 139(1) of the Act. The Tribunal held that the disallowance of deduction under section 80P does not arise at the stage of section 143(1) but may be relevant at the stage of section 143(3) assessment. The Tribunal set aside the orders and restored the issue to the Assessing Officer for fresh consideration on the merits of the deduction under section 80P.

2. The assessee raised concerns about the violation of principles of natural justice as the deduction under section 80P was denied without affording an opportunity to explain. The Tribunal acknowledged the importance of natural justice and directed the Assessing Officer to verify the claim under section 80P after giving the assessee an opportunity to present their case. The Tribunal emphasized the need for due process and fairness in tax assessments. The issue was remanded to the Assessing Officer for proper adjudication, ensuring the principles of natural justice were upheld. The Tribunal's decision aimed to ensure a fair and just determination of the deduction under section 80P without compromising procedural fairness.

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