2023 (2) TMI 1012

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.... 2. The assessee has taken the following grounds of appeal:- Grounds of Appeal Tax effect relating to each Ground of appeal 1. The learned Commissioner (Appeals), National Faceless Appeal Centre, Delhi erred in confirming action of CPC Bengaluru by disallowing claim of deduction of Rs.2,22,704/- by failing to appreciate that provisions of Sec. 143{l)(a)(v) do not provide for denial of deduction u/s SOP of the Act when the return of income is not filed within time allowed u/s 139(1) of the Act but u/s 139(4). 66,362/- 2. The learned Commissioner (Appeals), National Faceless Appeal Centre, Delhi erred in upholding action of the CPC Bengaluru in making adjustment to the returned income of the Appellant by way of an intim....

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..... 4. The assessee filed appeal against the order of Ld. CIT(A), who dismissed assessee's appeal with the following observations: "4.4 Adjudication The submission has been considered but cannot be accepted. The due date for filing the return of income under Sec. 139(1) was 31.08.20.19. The due date for filing the return of income under Sec.139(4) was 31.03.2021. Even though, the due date for filing the return of income for this year was extended Upto 30.09.2020 under Sec.119 by the Board due to covid pandemic. The appellant filed the return of income on 30.11.2020 which is within one year from the end of the relevant Assessment Year. Hence, it has to be construed as a belated return under Sec. 139(4) of the Act. Whether ....

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....ncorrect under section 143(1)(a)(ii) of the Act since the return of income was not filed within the due date prescribed under section 139(1) of the Act. The counsel for the assessee submitted that the adjustment made by the CPC was beyond the scope of section 143(1)(a)(v) of the Act. The counsel for the assessee submitted that 143(1)(a)(v) of the Act was amended w.e.f. 01-04-2021 and hence any prima facie adjustment relating to denial of deduction when the return of income was not filed within due date, was not possible for the year under consideration. Further, "incorrect claim" u/s 143(1)(a)(ii) of the Act is defined by way of an Explanation to section 143(1) of the Act which does not state that the claim would be "incorrect" if return of....

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....er VI-A under the heading "C.- Deductions in respect of certain incomes" (which includes deduction under section 80P of the Act), can be made if the return is furnished beyond the due date specified under sub-section (1) of section 139. This amendment has been introduced w.e.f. 1-4-2021. Accordingly, the above amendment would not apply to the impugned assessment year. Further, section 143(1)(ii) of the Act permits adjustment in case of an incorrect claim, if such incorrect claim is apparent from any information in the return. However, Explanation to the aforesaid section specifies the following cases where the claim made in the return of income can be said to be "incorrect" for the purposes of this subsection: (a) "an incorrect cla....

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....ple reason that the section was not in force during the period under consideration i.e. assessment year 2019-20. 7.2 The second issue for consideration is that whether the case of the assessee would fall within the purview of prima facie adjustment under section 143(1)(a)(ii) (an incorrect claim, if such incorrect claim is apparent from any information in the return). In our view, the scope of the adjustments that can be made under the said provision has been elaborated in the Explanation to the aforesaid section, which does not include denial of deduction claimed by the assessee in case the assessee does not furnish its return of income within the date stipulated under section 139(1) of the Act. The Explanation to the said section speci....