2023 (3) TMI 814 - AT - Income Tax

Exemption u/s. 80P - denial of exemption on the ground that the Return was filed belatedly u/s. 139(4) - adjustment u/s. 143(1)(a) - HELD THAT - It is apparent from the Ld. NFAC order when the assessee has clearly pointed out the amendment in Section 143(1) made by Finance Act, 2021 which is not applicable for the present assessment year 2019-2020. However the same was not been considered by the Ld. NFAC and erroneously dismissed the assessee s appeal. Assessee cannot be denied the deduction u/s. 80P of the Act on the ground that the assessee did not file the Return of Income within the due date prescribed u/s. 139(1) of the Act under proceedings made u/s. 143(1)(a)(v) of the Act for the Assessment Year 2019-20. Thus the intimation made u/s. 143(1) is invalid in law and thereby quashed. Appeal filed by the Assessee allowed.

Summary

Issues involved:
Denial of exemption u/s. 80P of the Act due to belated filing of Return of Income u/s. 139(4) of the Act.

Comprehensive details of the judgment:

Issue 1: Denial of exemption u/s. 80P of the Act

The appellant, a Co-operative Society, filed its original Return of Income for A.Y. 2019-20 on 30.11.2020, claiming deduction u/s. 80P. The Intimation u/s. 143(1) denied the deduction due to late filing. The appellant contended that denial of deduction u/s. 80P cannot be made under 143(1)(a)(v) for belated filing u/s. 139(4). The Ld. CIT(A) dismissed the appeal, stating that the cited case laws were not applicable.

Issue 2: Grounds of Appeal

The appellant raised several grounds of appeal, challenging the legality of the order passed by the Assistant Director of Income-tax. The appellant argued that the denial of deduction u/s. 80P was not permissible under 143(1)(a) and that the incorrect claim was not apparent from the return of income.

Issue 3: Tribunal's Decision

The Tribunal considered the amendment in Section 143(1) by the Finance Act, 2021, which was not applicable for A.Y. 2019-20. Referring to the Co-ordinate Bench decision in Lunidhar Seva Sahakari Mandali Ltd., the Tribunal held that denial of deduction u/s. 80P was not justified for late filing under 139(1) for A.Y. 2019-20. The Tribunal also noted that the claim of deduction under section 80P cannot be denied if the return is filed within the due date u/s. 139(4). Therefore, the intimation made u/s. 143(1) was deemed invalid, and the appeal of the Assessee was allowed.

In conclusion, the Tribunal ruled in favor of the Assessee, allowing the appeal and quashing the intimation made under section 143(1) on the grounds of denial of exemption u/s. 80P of the Act due to belated filing of the Return of Income.