2023 (11) TMI 1246 - 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 2022 (11) TMI 128 - 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 judgment deals with the denial of deduction under section 80P of the Income Tax Act to an assessee who filed the return of income beyond the due date specified under section 139(1) of the Act. The key issue is whether such denial can be made by way of adjustment under section 143(1) of the Act.

Issue 1: Denial of deduction under section 80P:
The Department contended that the ITAT did not consider the binding decision of the Madras High Court regarding the inadmissibility of claims under Chapter VIA in case of belated returns. The Department argued that the Explanation to section 143(1)(a) cannot restrict the main provision and that the order should be recalled. The assessee's counsel, however, asserted that the ITAT thoroughly analyzed the issue and took into account the amendment in section 143(1)(a)(v) regarding the denial of deduction under section 80P. The counsel argued that the Miscellaneous Application was beyond the scope of section 254(2) as there was no apparent mistake in the ITAT's order.

Issue 2: Legal and factual findings by ITAT:
The ITAT, in its order, discussed the statutory provisions related to the deduction under section 80P and the amendments introduced in section 143(1)(a)(v) of the Act. It highlighted that the denial of the claim under section 80P could not be considered a prima facie adjustment under section 143(1)(a)(v) for the assessment year in question. The ITAT also analyzed the scope of adjustments under section 143(1)(a)(ii) and concluded that the case did not fall within the purview of prima facie adjustment under this provision. The ITAT referred to judicial precedents and held that the claim of deduction under section 80P could not be denied solely based on the delay in filing the return of income within the due date specified under section 139(1) of the Act.

Conclusion:
Upon reviewing the detailed legal and factual findings in the ITAT's order, it was determined that there was no apparent mistake warranting interference in the decision. The Miscellaneous Application filed by the Department was dismissed, affirming the ITAT's ruling on the denial of deduction under section 80P.