Section 143(1) cannot support broad disallowance of Section 80P deduction; appeal limitation runs from actual service of intimation.

Limitation for an appeal against an intimation runs from actual service where earlier receipt is not established; on these facts, the appeal was treated as timely. Processing under section 143(1) is confined to limited prima facie adjustments and does not permit a disallowance of deduction under section 80P in the manner adopted here. The adjustment was therefore held to be beyond the permissible scope of section 143(1) and was deleted.

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Issues: (i) Whether the assessee's appeal before the first appellate authority was barred by limitation. (ii) Whether disallowance of deduction under section 80P could be made by way of adjustment while processing the return under section 143(1).

Issue (i): Whether the assessee's appeal before the first appellate authority was barred by limitation.

Analysis: The date of service of the intimation was treated as the relevant date for computing limitation. On the facts, the intimation was not shown to have been received in 2014 and was supplied only in 2020, after which the appeal was filed promptly. In these circumstances, no delay in filing the appeal before the first appellate authority survived.

Conclusion: The appeal before the first appellate authority was not time-barred.

Issue (ii): Whether disallowance of deduction under section 80P could be made by way of adjustment while processing the return under section 143(1).

Analysis: The processing under section 143(1) permits only limited prima facie adjustments. For the years in question, the provision did not authorise a disallowance of deduction under section 80P in the manner adopted by the processing authority. The return was also within the time applicable to the assessee as a co-operative society, and the adjustment was therefore beyond the permissible scope of section 143(1).

Conclusion: The adjustment disallowing deduction under section 80P was not sustainable.

Final Conclusion: The assessee succeeded on both limitation and merits, and the impugned adjustment was deleted for both assessment years.

Ratio Decidendi: A processing authority under section 143(1) cannot make a disallowance of section 80P deduction beyond the limited scope of prima facie adjustments, and limitation for appeal runs from the date of actual service of the intimation where prior receipt is not established.

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