2023 (2) TMI 749 - AT - Income Tax

Tribunal grants deduction despite minor filing delay, overturns denial.

The Tribunal overturned the denial of deduction under section 80P to a Credit Co-op. Society for A.Y. 2019-20 due to a minor delay of 4 minutes and 42 ... Disallowance of deduction u/s. 80P - adjustment while processing the return u/s. 143(1) - return was not filed within due date prescribed u/s. 139(1) - whether once the Return of Income is filed beyond the prescribed date u/s. 139(1) of the Act, can the deduction u/s. 80P of the Act be denied to the assessee, by way of adjustment u/s. 143(1)? - HELD THAT:- Section 143(1)(a)(v) of the Act provides that disallowance of deduction claimed under any of the provisions of Chapter VI-A under the heading “C- Deductions in respect of certain incomes” (which includes deduction under section 80P of the Act), can be made if the Return is filed beyond the due date specified under sub-section (1) of Section 139. This amendment has been introduced w.e.f. 01.04.2021 and does not apply to the impugned assessment year involved herein namely Assessment Year 2019-20. Accordingly in our considered view denial of claim of deduction u/s. 80P of the Act would not come within the purview of prima facie adjustment under section 143(1)(a)(v) of the Act. Thus the case laws relied by the Ld. CIT(A) in its order is clearly distinguishable to the facts of the present case and the same are not applicable. CPC Centre is not correct in denying the claim of deduction u/s. 80P of the Act to the assessee under 143(1)(a)(v) proceedings for this Assessment Year 2019-10. Hence the intimation made by the CPC Centre and tax demand raised thereon are hereby quashed. Thus the grounds raised by the assessee are hereby allowed. Issues:1. Denial of deduction u/s. 80P due to late filing of return.2. Interpretation of statutory provisions regarding deduction under section 80P.3. Application of case laws in determining the eligibility for deduction.4. Consideration of technical delays in uploading returns.Analysis:The appeal pertains to the denial of deduction u/s. 80P to the Assessee for A.Y. 2019-20 due to a delay of 4 minutes and 42 seconds in filing the return. The Assessee, a Credit Co-op. Society, filed the return after the due date specified under section 139(1) of the Income Tax Act, resulting in a tax demand of Rs. 22,64,181/- as per the intimation under section 143(1). The Assessee contended that technical glitches caused the delay, and requested the deduction be allowed. The Ld. CIT(A) upheld the denial based on previous ITAT decisions. The Assessee appealed, arguing against the denial of deduction u/s. 80P, emphasizing the technical issues faced during filing.The Tribunal analyzed the statutory provisions, noting that section 80AC requires filing the return by the due date for claiming deductions under section 80P. However, the amendment under section 143(1)(a)(v) disallowing deductions for late filing was not applicable for A.Y. 2019-20. The Tribunal distinguished the ITAT decisions relied upon by the Ld. CIT(A) as inapplicable to the present case. Additionally, a Co-ordinate Bench decision in a similar case condoned a delay of 12 minutes and 31 seconds due to technical issues, emphasizing the importance of justice in such matters.The Ld. D.R. supported the lower authorities, but the Tribunal found that the Assessee's minor delay did not warrant denial of the deduction u/s. 80P. Relying on the principles of fairness and justice, the Tribunal set aside the CPC Centre's decision, quashed the tax demand, and allowed the Assessee's appeal. The Tribunal emphasized the need to consider technical delays and upheld the Assessee's claim for deduction u/s. 80P. The order was pronounced on 17-02-2023, in favor of the Assessee.