Deduction under section 80P for prior assessment year permitted where section 80AC prospectivity excludes its application, claim to be reconsidered.

The note addresses denial of a Chapter VIA deduction (section 80P) where the return was filed after the due date but in response to a notice. It explains that the amendment denying certain Chapter VIA deductions for late-filed returns (introduced from the relevant later assessment year) is prospective and does not apply to the earlier assessment year under review; consequently the tax authority must reconsider the claimants 80P deduction as declared in the belated return and examine the claim on merits for that assessment year.

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Issues: Whether a primary agricultural cooperative society can claim deduction under section 80P of the Income-tax Act, 1961 for A.Y.2017-18 where the return claiming the deduction was filed belatedly on 28.11.2019 during assessment proceedings.

Analysis: Section 80A(5) requires that a claim for specified deductions must be made in the return of income, but does not prescribe that the return must be filed within the due date. Section 80AC, as amended w.e.f. A.Y.2018-19, conditions certain Chapter-C deductions on filing the return on or before the due date under section 139(1); that amendment is prospective and applies only to assessment years commencing on or after 1 April 2018. For A.Y.2017-18 the amended condition in section 80AC(ii) is not applicable. The assessee made an express claim for deduction under section 80P in the belated return filed during assessment proceedings. The matter was remitted to the Assessing Officer for examination of the claim on merits since the statutory bar introduced from A.Y.2018-19 does not operate retrospectively to deny the 80P claim for A.Y.2017-18.

Conclusion: The assessee is entitled to have the deduction under section 80P considered despite filing the return belatedly for A.Y.2017-18; the matter is remanded to the Assessing Officer for adjudication of the claim on merits in accordance with law.

Final Conclusion: The appeal is allowed for statistical purposes and the issue of entitlement to deduction under section 80P for A.Y.2017-18 is restored to the Assessing Officer for merits determination.

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