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2024 (12) TMI 1160 - AT - Income TaxDeduction u/s 80P - return filed by the assessee was treated by the CIT(A) as belated return - HELD THAT - The present case before us pertains to assessment year 2019-20 (previous year 2018-19). It can be readily inferred, therefore, that an assessee will not be hit by provisions of Section 80AC of the Act, having regard to the assessee claim for deductions under Chapter VIA of I. T. Act, while processing the return and making adjustments u/s 143(1) of the Act. It follows accordingly that in the present case before us, the assessee s claim for deduction u/s 80P of the Act (which falls under Chapter VI-A of the Act) is not hit by Section 80AC of the Act while processing the return and making adjustments under section 143(1) of the Act. We direct the AO to allow the assessee s claim under section 80P of the Act. Appeal of the assessee is allowed.
Issues Involved:
1. Disallowance of deduction under Section 80P of the Income Tax Act. 2. Applicability of Section 80AC and Section 143(1)(a)(v) for the assessment year 2019-20. 3. Jurisdiction of CPC to make disallowance under Section 143(1). 4. Relevance of judicial precedents and amendments in the context of the case. Detailed Analysis: 1. Disallowance of Deduction under Section 80P: The primary issue revolves around the disallowance of the assessee's claim for deduction under Section 80P of the Income Tax Act, amounting to Rs. 1,63,83,734/-. The Central Processing Centre (CPC) rejected this claim on the basis that the return was filed beyond the due date specified under Section 139(1). The assessee argued that the disallowance was unjustified as the return was delayed by only one day due to technical difficulties. 2. Applicability of Section 80AC and Section 143(1)(a)(v): The assessee contended that the amendment to Section 143(1)(a)(v), which allows for the disallowance of deductions under Chapter VI-A if the return is filed late, was effective from 01.04.2021 and thus not applicable to the assessment year 2019-20. The Tribunal agreed, noting that Section 80AC mandates filing the return on or before the due date for claiming deductions, but the amendment to Section 143(1)(a)(v) was not applicable for the assessment year in question. 3. Jurisdiction of CPC to Make Disallowance: The assessee challenged the jurisdiction of the CPC to make such disallowance, arguing that the enabling provision for disallowing claims under Chapter VI-A was legislated only from 01.04.2021. The Tribunal found merit in this argument, stating that the CPC committed a prima facie error by making adjustments to the returned income on account of deduction under Section 80P for the assessment year 2019-20. 4. Relevance of Judicial Precedents and Amendments: The Tribunal relied on several judicial precedents, including decisions from the ITAT Rajkot Bench and ITAT Chandigarh Bench, which held that disallowance of deductions under Chapter VI-A due to late filing of returns was not permissible for assessment years prior to 2021-22. The Tribunal emphasized that the amendment introduced by the Finance Act, 2021 was prospective and not applicable to the assessment year 2019-20. Conclusion: The Tribunal concluded that the assessee's claim for deduction under Section 80P should not have been disallowed based on the late filing of the return, as the relevant amendment was not applicable for the assessment year 2019-20. The Tribunal directed the Assessing Officer to allow the deduction, thereby allowing the appeal of the assessee.
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