TaxTMI 
TaxTMI 
2026 (8) TMI 462
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.... 3. The learned PCIT erred in directing the learned AO to withdraw/disallow the deduction, which was allowed under Section 80P(2)(d) of the Act." 2. Briefly, the facts of the case are that the assessee didn't file its original return of income. Thereafter, the case of the assessee was opened on the basis of the information that the assessee has made certain deposits with Saraswat Co-op Bank and NKGSB Co-operative Bank and basis that, the case of the assessee was opened for scrutiny. Thereafter, the assessment order u/s. 147 r.w.s. 144 r.w.s. 144B of the Act, was passed on 29.01.2025, wherein the assessed income was determined at Rs. 41,090/- as declared by the assessee in return of income filed in response to notice u/s. 148 of the Act. 3. Subsequently, the assessment records were examined and the ld. PCIT observed that the assessee has shown interest income of Rs. 20,26,566/- and claimed deduction u/s. 80P(2)(d) of the Act, and referring to the provisions of Section 80AC, it was held that since the assessee has not filed any return u/s. 139(1) of the Act, therefore, the order passed u/s. 147 r.w.s. 144 r.w.s. 144B is erroneous as well as prejudicial to the interest of the R....
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....e the ld. CIT(A). Further, our reference was drawn to the provisions of sub-section (2) to Section 148, wherein it has been stated that the return filed in response to notice u/s. 148 shall be considered as a return required to be furnished u/s. 139 of the Act. Further, it was submitted that the Assessing Officer has duly examined the claim of the deduction u/s. 80P(2)(d) of the Act and the said view is supported by the decision of various Benches of the Tribunal. Therefore, the view so taken by the Assessing Officer cannot be held to be erroneous view and therefore, the order passed by the ld. PCIT be set aside. 7. The ld. DR has been heard, who has relied on the order passed by the ld. PCIT. Further, the ld DR relied upon the decision of the Hon'ble Supreme Court in case of CIT vs Sun Engineering Works (P) Ltd reported in 198 ITR 297 and submitted that being a case of reopening u/s 148 of the Act, the assessee could not have claimed the deduction u/s 80(P)(2)(d) of the Act. 8. In his rejoinder, the ld AR submitted that the Revenue cannot be allowed to improve upon its case as the contentions advanced by the ld DR are beyond the scope of the findings and order of the ld PCIT....
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....relevant to assessment year commencing on or after the 1st day of April 2018, any deduction is admissible under any provisions of chapter under the heading "C-deduction in respect of certain income", no such deduction shall be allowed to the assessee unless the assessee furnishes a return of its income for such assessment year on or before the due date specified under sub-section (1) of section 139 of the Act. The emphasis thereon is on the timelines provided u/s 139(1) and not the return filed originally u/s 139(1) of the Act. 13. In the instant case, given that the return of income has been filed for the first time in response to notice u/s 148, the provisions of sub-section (2) of section 148 are equally relevant. The said provisions provide that the return of income required under sub-section (1) shall be furnished in such form and verified in such manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, apply accordingly as if such return were a return required to be furnished under section 139 of the Act. It further provides that any return of income required under sub-section (1) of section 148 furnished after the expiry o....
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....nt order. 17. Having said that, even for academic purposes, if we were to consider the aforesaid contention, we find that the reliance placed by the ld DR on the decision in case of Sun Engineering Works (P.) Ltd. (supra) is misplaced and founded on an incomplete appreciation of the ratio laid down by the Hon'ble Supreme Court. A careful reading of the judgment makes it abundantly clear that it was a case of reopening where the original assessment stood concluded and it was held by the Hon'ble Supreme Court that while reassessment proceedings cannot be converted into a forum for reopening concluded matters unrelated to escaped income, at the same time, where the matter is reopened, the assessee is not precluded from raising claims which are directly relatable to the income that has escaped assessment and the relevant findings therein read as under: "As a result of the aforesaid discussion, we find that in proceedings under section 147, the ITO may bring to charge items of income which had escaped assessment other than or in addition to that item or items which have led to the issuance of notice under section 148 and where reassessment is made under section 147 in re....