Prima facie adjustment limits prevent disallowance of section 80P deduction in processing and rectification proceedings.

A deduction under section 80P could not be disallowed as a prima facie adjustment in processing under section 143(1)(a) because the proposed disallowance fell outside the permissible scope of that provision for the relevant period, and the later amendment under section 143(1)(a)(v) was not applicable before 01.04.2021. The same disallowance also could not be sustained in rectification under section 154, since rectification cannot expand the scope of the original processing. The tax demand based on the impugned adjustment was therefore not upheld, and the matter was decided in favour of the assessee.

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Issues: Whether the disallowance of deduction under section 80P could be made while processing the return under section 143(1)(a), and whether the same disallowance could be sustained in rectification under section 154 on the basis of section 80AC for a return filed beyond the time under section 139(1).

Analysis: The adjustment disallowing the deduction was treated as falling outside the permissible scope of section 143(1)(a)(ii), and the corresponding adjustment under section 143(1)(a)(v) could not be applied for a period prior to 01.04.2021, when the relevant amendment became effective. Since the rectification proceedings merely reiterated the same disallowance, they could not enlarge the scope of the original processing.

Conclusion: The disallowance of deduction under section 80P was not sustainable in the processing or rectification proceedings, and the issue was decided in favour of the assessee.

Final Conclusion: The tax demand founded on the impugned adjustment could not be upheld, and the assessee's appeal succeeded.

Ratio Decidendi: A deduction claim cannot be disallowed through prima facie adjustment under section 143(1)(a), or reiterated in rectification under section 154, unless the adjustment squarely falls within the statutory scope in force for the relevant assessment period.

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