2023 (11) TMI 1244 - AT - Income Tax

Rectification u/s 254 - Denial of claim of deduction u/s. 80P by way of prima facie adjustment u/s. 143(1)(a)(v) - ITAT allowed deduction - HELD THAT - ITAT has given a detailed legal as well as factual finding has to why the denial of claim of deduction u/s. 80P cannot be made by way of prima facie adjustment u/s.143(1)(a)(v) of the Act for the impugned assessment order i.e. A.Y. 2019-20 2023 (1) TMI 752 - ITAT RAJKOT . We observe that ITAT has given a detailed factual and legal finding/discussion while deciding this issue. Further, the decision cited by Department is not on the issue of denial of claim by way of adjustment made u/s. 143(1)(a)(v) of the Act and has been rendered on its own set of facts while the assessee s facts are on a different footing. Accordingly, on going through the order passed by the ITAT, we find no apparent mistake in the order passed by the ITAT so as to call for any interference. Miscellaneous Application filed by the Department is dismissed.

Summary

Issues involved:
The Department filed a Miscellaneous Application against the ITAT order in ITA No. 38/Rjt/2022, contending that deduction u/s. 80P cannot be denied to the assessee for not filing the return within the due date u/s. 139(1) of the Act. The Department argued that the ITAT did not consider the Madras High Court decision and that the Explanation to section 143(1)(a) cannot restrict the main provision. The assessee's counsel argued that the ITAT considered all aspects and amendments, stating that the Miscellaneous Application is beyond the scope of section 254(2) as there is no mistake in the ITAT's order.

Decision on the issue:
The ITAT considered whether deduction under section 80P can be denied if the return is filed beyond the due date under section 139(1) of the Act. It noted that amendments from 01-04-2021 do not apply to the relevant assessment year 2019-20. The ITAT found that denial of claim under section 80P does not fall under prima facie adjustment under section 143(1)(a)(v) as it was not in force during the assessment year. The ITAT also analyzed whether the case falls under prima facie adjustment under section 143(1)(a)(ii) and concluded that the claim of deduction cannot be denied solely based on late filing of the return.

Legal findings and reasoning:
The ITAT extensively discussed the statutory provisions, highlighting that denial of deduction under section 80P is not permissible solely due to late filing of the return. It referred to judicial precedents supporting the allowance of deductions even if claims were made in revised returns. The ITAT emphasized that in the case at hand, the delay in filing the return did not warrant denial of the deduction under section 80P. The ITAT restored the case to the CIT(A) for fresh adjudication, emphasizing the importance of judicial precedents and the interests of justice.

Final decision:
After thorough analysis, the ITAT dismissed the Department's Miscellaneous Application, citing that there was no apparent mistake in the ITAT's order in ITA No. 23/Rjt/2022. The decision was pronounced in the open court on 08-11-2023.