2023 (7) TMI 859

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....filed within time allowed u/s 139(1) of the Act but u/s 139(4).   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 intimation u/s 143(1) and in denying the benefit of Sec. SOP of the Act of Rs.5,58,494/-to the Appellant by failing to appreciate that this was not a prima facie adjustment permissible u/s 143(l)(a) of the Act. 1,72,574/- 2. The learned Commissioner (Appeals), National Faceless Appeal Centre, Delhi, erred in not adjudicating ground of disallowance of claim of deduction of Rs.5,58,494/-u/s SOP of the Act on merits. 1,72,574/- 3. The appellant craves leave to add, amend, alter and withdraw any ground of appeal anytime up to the hearing of this appeal.     Total tax effect 1,72,574/- 3. The brief facts of the case are that the assessee is a co-operative society, who filed return of income on 28-11-2020 declaring total income of Rs. 5,58,494/- and claimed deduction of Rs. 5,58,494/- under section 80P of the Act. The extended due date of filing original return of income ....

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.... Every provision in the statute has a purpose and the parliament in its wisdom has introduced the Sec 80AC and proviso to sec 13901) to specify that the appellant's claiming certain deduction have to file their returns within the due date specified us 139(1) of the Act. Any decision to say that it is only directory and the appellant are entitled to make claims of deduction even if returns are filed u/s 139(4) would only make the provision redundant if any assessee fails to tie the return u/s 139(1) by the due date, he is bound to pay interest u/s 234A for the delay in filing of the return. Various High Courts have held that the provisions of 234 AB&C to be valid and not ultra virus of the constitution. The assessees have been paying the interest for any such delay. On comparison, it is not farfetched to argue that the assessees have to forgo certain benefits for not complying with the provisions. 6.3 The appellant further relied on various judicial decisions in regards to the liberal interpretation should be given in case of deductions in this issue. The observation of the Supreme Court in the following cases are relevant and are to be taken on note (i) In the....

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....t. In view of this, the disallowance made by the CPC is upheld Therefore, ground no 3 of the appeal is dismissed." 5. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A) denying assessee's claim of exemption under section 80P of the Act. 6. Before us, the counsel for the assessee submitted that CPC made adjustment to income of the assessee by denying assessee's claim of deduction of Rs. 5,58,494/- under section 80P of the Act on the ground that the claim of assessee was incorrect 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 whic....

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....n entry, in the return,- (i) of an item, which is inconsistent with another entry of the same or some other item in such return; (ii) in respect of which the information required to be furnished under this Act to substantiate such entry has not been so furnished; or (iii) in respect of a deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction 7.1 A joint reading of the above provisions makes it evident that the claim of deduction under section 80P of the Act cannot be allowed the assessee, if the assessee does not file its return of income within the due date stipulated under section 139(1) of the Act w.e.f. assessment year 2018-19 onwards. However, we also note that amendment has been introduced in section 143(1)(a)(v) of the Act to provide that the claim of deduction under section 80P of the Act can be denied to the assessee, in case the assessee does not file its return of income within the time prescribed under section 139(1) of the Act with effect from 01-04-2021 and does not apply to the impugned assessment year i.e. assessment year 2019-20 relevant to f....

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....claim was not made in original return but subsequently in revised return filed in response to notice issued under section 153A. In the case of Lanjani Co-Operative Agri Service Society Ltd. (CPC) v. DCIT [2023] 146 taxmann.com 468 (Chandigarh - Trib.), the ITAT held that the enabling provisions of subclause (v) of section 143(1) providing for disallowance of deduction under section 80P due to late filing of return having been introduced by Finance Act, 2021 effective from 1-4-2021, disallowance of deduction claimed under section 80P during relevant years 2018-19 and 2019-20 on grounds of late filing of return was unjustified. In the case of Lunidhar Seva SahkariMandali Ltd.149 taxmann.com 28 (Rajkot - Trib.) the ITAT held that denial of claim under section 80P would not come within purview of prima facie adjustment under section 143(1)(a)(v) for reason that said section was not in force during period under consideration i.e. assessment year 2019-20. Further, the case of assessee would also not fall within purview of prima facie adjustment under section 143(1)(a)(ii), which specifies the list for disallowance under the said provision and prima facie adjustment for late filing of ret....