Condoned return-filing delay removes the basis for rectification denial of cooperative deduction when delay was the sole ground.

Condonation of delayed return filing under section 119(2)(b) removes the factual basis for denying deduction under section 80P(2) through rectification where the disallowance rests solely on delay under section 139(1). The delay was condoned because of delayed statutory audit and operational difficulties. Consequently, the deduction remained available and the rectification-based disallowance was set aside.

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Issues: Whether deduction under section 80P(2) could be denied through rectification solely because the return of income was filed belatedly, after the delay had been condoned by the competent authority.

Analysis: The rectification disallowance rested exclusively on delay in filing the return under section 139(1). The competent authority subsequently condoned that delay under section 119(2)(b), accepting that it resulted from delayed statutory audit and operational difficulties. The factual basis for denying the deduction consequently ceased to exist.

Conclusion: The assessee was entitled to deduction under section 80P(2); the disallowance made through the rectification order was set aside.

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