2024 (3) TMI 1123 - AT - Income Tax

Disallowance u/s 80P - claim disallowed u/sec. 143(1)(a)(ii) by way of processing as an instance of incorrect claim if such incorrect claim is there from any information in the return - HELD THAT - Legislature has introduced such a disallowance provision in sec. 143(1)(a)(v) dealing with deduction claim(s) provided in Chapter-VI-A of the Act by way of Finance Act 2021 w.e.f. 01.04.2021 with prospective effect whereas the assessment year herein is 2017-2018 only. So far as the Revenue s case quoting sec. 80AC is concerned it would be very much relevant to observe that once the legislature itself has made the impugned provision in sec. 143(1)(a)(v); the same could not have led to the assessee s 80P deduction disallowance in summary processing . As in Veerappampalayam Primary Agricultural Cooperative Credit Society 2021 (4) TMI 1169 - MADRAS HIGH COURT is also found to be distinguishable on facts as their lordships had dealt with assessment year 2018-2019 vide judgment dated 07.04.2021 thereby not having benefit of the amendment made in the Finance Act 2021 in foregoing terms. That being the clinching fact that sec. 143(1)(a)(v) itself is not applicable in assessee s case specifically dealing with filing of a sec. 139(1) return sub-clause(ii) could not be pressed in action being in the nature of a general provision only. We adopt principles of stricter interpretation as per Dilip Kumar And Co. Ors. 2018 (7) TMI 1826 - SUPREME COURT to conclude that both the learned lower authorities action disallowing the assessee s sec. 80P deduction(s) claim(s) by way of sec. 143(1)(a)(ii) or 143(1)(a)(v) processing has to be reversed. Assessee appeal allowed.

Summary

Issues Involved:
The appeal involves the disallowance of sec. 80P deduction claim under sec. 143(1) of the Income Tax Act, 1961 for assessment year 2019-2020.

Analysis:
The Revenue contended that the sec. 80P deduction claim of the assessee was rightly disallowed for not filing the sec. 139(1) return within the due date. They argued that such claim could be disallowed under sec. 143(1)(a)(ii) of the Act if it is incorrect. Reference was made to sec. 80AC and a judgment in Veerappampalayam Primary Agricultural Cooperative Credit Society Vs. DCIT to support their position.

However, the Tribunal found no merit in the Revenue's arguments. It noted that the disallowance provision in sec. 143(1)(a)(v) dealing with deduction claims under Chapter-VI-A was introduced by the Finance Act, 2021 with prospective effect from 01.04.2021, while the assessment year in question was 2017-2018. Therefore, the Tribunal held that sec. 143(1)(a)(v) was not applicable to the assessee's case. Citing the principles of stricter interpretation, the Tribunal concluded that the disallowance of the sec. 80P deduction claim by the lower authorities was incorrect and ordered it to be reversed.

As a result, the Tribunal allowed the assessee's appeal, overturning the disallowance of the sec. 80P deduction claim.

Separate Judgement:
No separate judgment was delivered in this case.