Chapter VI-A deductions cannot be prima facie disallowed in processing for belated returns before the 2021 amendment.

A Chapter VI-A deduction could not be prima facie disallowed under section 143(1)(a)(v) for assessment year 2019-20 merely because the return was filed after the due date under section 139(1). The power to make such an adjustment was introduced only by the Finance Act, 2021 with effect from 1 April 2021, so it did not apply to the relevant year. Although section 80AC may bar the claim in regular assessment proceedings, it did not expand processing jurisdiction under section 143(1). The intimation could not validly disallow the section 80P deduction.

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Issues: Whether, for assessment year 2019-20, the processing authority could disallow deduction under section 80P of the Income-tax Act, 1961 while processing the return under section 143(1)(a)(v) merely because the return was filed beyond the due date under section 139(1).

Analysis: The disallowance of deductions under the heading "C.- Deductions in respect of certain incomes" in Chapter VI-A at the stage of processing under section 143(1)(a)(v) became available only by the Finance Act, 2021 with effect from 01.04.2021. For the relevant assessment year, that amendment was not in force. The bar under section 80AC may operate in regular assessment proceedings, but it did not authorise a prima facie adjustment under section 143(1) for the year in question. The adjustment therefore exceeded the scope of processing jurisdiction.

Conclusion: The disallowance of deduction under section 80P in the intimation under section 143(1) was not permissible and the deduction was required to be allowed.

Ratio Decidendi: A deduction under Chapter VI-A cannot be prima facie disallowed under section 143(1)(a)(v) for an assessment year prior to the amendment conferring such power, even if the return was filed belatedly.

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