2024 (11) TMI 1609 - AT - Income Tax

Section 80P deduction cannot be rejected in a section 143(1) intimation solely for late return filing.

A deduction under section 80P could not be denied through an intimation under section 143(1) merely because the return was filed after the due date under ... Disallowance of deduction claimed u/sec.80P through intimation u/s 143(1) - not filing the Return of Income within the time mentioned u/s 139(1) HELD THAT: - The Tribunal held that, although the return was admittedly filed belatedly, section 143(1) as applicable to the year under consideration did not contain any enabling provision for disallowing a claim under section 80P on that basis. Clause (v) of section 143(1) referred to specified deductions and did not include section 80P. The Tribunal therefore held that such denial also did not fall within the permissible scope of prima facie adjustment while processing the return. Following the earlier coordinate bench view, it confined its decision to the validity of adjustment under section 143(1) and did not examine whether such deduction could be disallowed in regular assessment. [Paras 4] The adjustment made under section 143(1) denying deduction under section 80P was held to be unsustainable, and the assessee's appeal was allowed. Final Conclusion: The Tribunal held that for A.Y. 2019-20, deduction under section 80P could not be denied by way of prima facie adjustment under section 143(1) merely because the return was filed beyond the due date under section 139(1). The assessee's appeal was accordingly allowed. Issues: Whether deduction under section 80P of the Income-tax Act, 1961 could be denied through an intimation under section 143(1) solely because the return was filed beyond the due date under section 139(1).Analysis: The return was admittedly filed belatedly, but the adjustment made under section 143(1) was held unsustainable because the then applicable provision did not provide for disallowance of deduction under section 80P merely on account of late filing. The reasoning turned on the limited scope of prima facie adjustments under section 143(1), which did not include the impugned denial for the assessment year in question. The decision also followed the view that deduction claims of this nature could not be rejected by way of a mechanical adjustment in the absence of a specific enabling provision applicable for that year.Conclusion: The denial of deduction under section 80P through section 143(1) for delayed filing was not sustainable, and the issue was decided in favour of the assessee.