Belated return cannot trigger prima facie denial of section 80P deduction under section 80AC at processing stage before 2021 amendment.

Before the Finance Act, 2021 amendment to section 143(1)(a), a belated return could not be used at the processing stage to make a prima facie adjustment denying deduction under section 80P(2)(a)(i) by invoking section 80AC(ii). The ITAT Pune held that the Central Processing Centre lacked jurisdiction to disallow the claim solely because the return was filed after the due date under section 139(1). The adjustment under section 143(1) was therefore unjustified, and the assessee remained entitled to the section 80P deduction.

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Issues: Whether, for assessment year 2019-20 and a return processed under section 143(1) of the Income-tax Act, 1961 before the Finance Act, 2021 amendment, the Central Processing Centre could make a prima facie adjustment to deny deduction under section 80P(2)(a)(i) by invoking section 80AC(ii) on the ground that the return was filed beyond the due date under section 139(1).

Analysis: The return was filed belatedly and the claim for deduction under section 80P(2)(a)(i) was disallowed at the processing stage under section 143(1)(a) by invoking section 80AC(ii). The Tribunal noted that, for the relevant assessment year and the processing date, the statutory framework prior to the Finance Act, 2021 amendment to section 143(1)(a) did not empower the Central Processing Centre to make such an adjustment solely on the basis of delayed filing and consequent denial of the deduction under section 80AC.

Conclusion: The adjustment was held to be unjustified and without jurisdiction, and the assessee was entitled to the deduction under section 80P(2)(a)(i).

Ratio Decidendi: Before the Finance Act, 2021 amendment to section 143(1)(a), a belated return could not be the basis for a prima facie adjustment at the processing stage to deny deduction under section 80P by invoking section 80AC.

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