Chapter VI-A deduction requires return filing within due date; delay may still be condoned on sufficient cause.

Delay in filing the Tribunal appeal was condoned on sufficient cause, as the assessee showed continued pursuit of the matter and the delay was considered in light of the Covid period; the matter was remitted for fresh consideration because the merits had not been examined by the first appellate authority. By contrast, deduction under Chapter VI-A, including section 80P(2), was denied where the return was filed beyond the due date under section 139(1) and the required audit report was not filed in the prescribed manner, because the statutory filing condition was mandatory and the disallowance could be made at the processing stage under section 143(1).

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Issues: (i) Whether the delay in filing the appeal before the Tribunal deserved to be condoned and the matter remitted for fresh consideration; (ii) Whether the disallowance of deduction under section 80P(2) for filing the return beyond the due date was sustainable.

Issue (i): Whether the delay in filing the appeal before the Tribunal deserved to be condoned and the matter remitted for fresh consideration.

Analysis: The appeal was delayed before the Tribunal, but the explanation showed that the assessee was pursuing the matter, had acted on the intimation, and later approached counsel after noticing the orders and the limitation position during the Covid period. The delay was accepted as having been explained with sufficient cause, and the Tribunal also noticed that the first appellate authority had not examined the issue on merits.

Conclusion: The delay was condoned and the matter was remitted to the CIT(A) for fresh consideration in favour of the assessee.

Issue (ii): Whether the disallowance of deduction under section 80P(2) for filing the return beyond the due date was sustainable.

Analysis: For the later assessment year, the return was filed beyond the extended due date and the assessee had not filed the audit report in the manner required to claim the extended time limit. The Tribunal relied on the mandatory nature of the filing requirement for Chapter VI-A deductions and accepted that an adjustment under section 143(1) could be made where the statutory condition was not met.

Conclusion: The disallowance of deduction under section 80P(2) was upheld and the assessee's claim was rejected.

Final Conclusion: The appeal relating to condonation and remand succeeded, but the substantive claim for deduction under section 80P(2) failed, resulting in one appeal being sent back for reconsideration and the other being dismissed.

Ratio Decidendi: A deduction under Chapter VI-A cannot be allowed unless the return is filed within the due date prescribed under section 139(1), and where that statutory condition is not satisfied, the adjustment can be made at the processing stage under section 143(1); delay in appeal may nevertheless be condoned on sufficient cause being shown.

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