2023 (8) TMI 1060 - AT - Income Tax

Appeal allowed: Late filing not reason to deny deduction under Income Tax Act

Sahakari Ganna Vikas Samiti Versus ITO-2 (5), Chandausi Uttar Pradesh

The Tribunal allowed the appeal, ruling that the denial of deduction under Section 80P of the Income Tax Act for filing a belated return was not valid for ... Deduction u/s 80P - claim denied on intimation u/ 143(1) - assessee has not filed the return of income within the due date specified u/s 139(1) for the A.Y. 2019-20 in question - HELD THAT:- The identical issue has come up before case of Kishorepur Paschimanchal SKUS Limited . [2023 (5) TMI 1243 - ITAT KOLKATA] wherein after taking note of provisions of Section 80AC of the Act and provision of Section 143(1) and subsequent amendment thereto, it was concluded that such adjustments under Chapter VI-A was not permissible u/s 143(1) of the Act in response of assessment years prior to A.Y. 2021-22. In the light of observations towards impermissibility to make adjustments towards deduction claimed under Section 80P of the Act prior to the amendment carried out in Section 143(1)(a)(v) of the Act effective prospectively from 01.04.2021 i.e. A.Y. 2021-22, we are of the view that CPC, Bengaluru has committed prima facie error in making adjustments to the returned income on account of deduction claimed u/s 80P of the Act while drawing intimation u/s 143(1) - We, thus, find merit in the plea of the assessee seeking rectification of the apparent error. Consequently, we set aside the order of the CIT(A) and direct the designated authority/CPC, Bengaluru to restore the deduction claimed under Section 80P of the Act made by the assessee - Appeal of assessee allowed. Issues:The denial of deduction claimed under Section 80P of the Income Tax Act due to filing the return after the due date specified under Section 139(1) for Assessment Year 2019-20.Summary:The appeal was filed against the order of the Commissioner of Income Tax (Appeals) concerning the denial of deduction under Section 80P of the Act due to the belated filing of the return. The assessee argued that the denial was not permissible as the relevant amendment authorizing such denial was effective from A.Y. 2021-22, whereas the case pertained to A.Y. 2019-20. The Co-ordinate Bench of Tribunal in a similar case concluded that adjustments under Chapter VI-A were not permissible for assessment years prior to A.Y. 2021-22.The Tribunal held that the denial of the deduction under Section 80P of the Act for filing a belated return was not valid for A.Y. 2019-20, as the relevant provisions were not in force during that period. The Tribunal referred to previous judgments and held that the claim of deduction cannot be denied solely based on the late filing of the return. The intimation under Section 143(1) was deemed invalid, and the assessee's appeal was allowed. The Tribunal directed the authorities to restore the deduction claimed under Section 80P of the Act by the assessee.In conclusion, the Tribunal allowed the appeal of the assessee, highlighting the impermissibility of making adjustments to the deduction claimed under Section 80P of the Act before the relevant amendment came into effect. The Tribunal found merit in the assessee's plea for rectification of the error and directed the authorities to restore the deduction claimed by the assessee.