Prospective application of section 80AC bars late-filing disallowance of section 80P claim at processing stage.

The Tribunal held that the amended section 80AC, which extended the due-date filing condition to Chapter VI-A deductions including section 80P, applied prospectively from assessment year 2018-19 and not to assessment year 2015-16. It further held that a section 80P claim could not be denied as a prima facie adjustment under section 143(1) merely because the return was filed late, since the issue was debatable and fell outside the limited processing scope. The disallowance was therefore unsustainable, and the deduction claimed was allowed.

---

---

Issues: Whether deduction under section 80P could be denied by way of prima facie adjustment under section 143(1) on the ground that the return was filed beyond the due date under section 139(1) for assessment year 2015-16, and whether the amended section 80AC applied retrospectively to bar the claim.

Analysis: The Tribunal noted that the controversy stood covered by earlier coordinate bench decisions holding that the amendment to section 80AC, which extended the due-date filing condition to deductions under Chapter VI-A including section 80P, operated only prospectively from assessment year 2018-19. It further held that, for the relevant year, there was no enabling provision permitting disallowance of section 80P deduction at the processing stage merely because the return was filed late, since the issue was debatable and lay outside the limited scope of adjustments under section 143(1).

Conclusion: The denial of deduction under section 80P through processing under section 143(1) was unsustainable, and the assessee was entitled to the deduction claimed.

Ratio Decidendi: An amendment enlarging the due-date filing condition for Chapter VI-A deductions is prospective where so held, and a debatable claim for section 80P deduction cannot be disallowed as a prima facie adjustment under section 143(1) for an earlier assessment year.

---