2022 (12) TMI 752 - AT - Income Tax

Deduction u/s 80P - intimation issued u/s. 143(1) - Disallowance of deduction as assessee-society had filed its return of income belatedly, i.e., beyond the due date specified u/s.139(1) - scope of pre-amended Section 143(1)(a)(v) and post amendment - HELD THAT - As stated by the Ld. AR, and, rightly so, the amendment in the machinery proviso i.e. Section 143(1)(a)(v) of the Act rendering the same as workable to disallow any deduction claimed by the assessee under Chapter VIA in a case return of income is furnished by him beyond the due date specified in sub-section (1) of Section 139 of the Act was made available only vide the Finance Act, 2021, w.e.f. 01.04.2021 i.e. from A.Y.2021-22 onwards. We concur with the claim of the Ld. AR that as the pre-amended Section 143(1)(a)(v) jeopardized the allowability of an assessee s claim for deduction only qua those claimed under Section 10A, 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID or 80-IE of the Act, and Section 143(1)(a)(v) was only post-amendment that was made available on the statute vide the Finance Act, 2021 w.e.f. 01.04.2021 been made compatible, and in fact workable, to facilitate a disallowance contemplated u/s.80P w.e.f. A.Y.2021-22, therefore, it is beyond comprehension that as to how any such adjustment could have been made by the CPC, Bengaluru vide an intimation issued u/s.143(1) of the Act, dated 25.06.2019 for the year under consideration, i.e., A.Y.2018-19. Thus find favour with the claim of the Ld. AR that as the CPC, Bengaluru had clearly traversed or, in fact exceeded its jurisdiction for disallowing u/s.143(1)(a)(v) the assessee s claim for deduction u/s.80P de hors any power vested with it at the relevant point of time, thus, the same cannot be sustained and is liable to be vacated. Accordingly, set-aside the order of the CIT(Appeals) and vacate the disallowance of the assessee s claim for deduction u/s.80P made by the A.O. Appeal of the assessee is allowed.

Summary

Issues:
1. Disallowance of deduction u/s.80P of the Income Tax Act, 1961 due to belated filing of return of income.

Analysis:
1. The controversy in the appeal revolves around the disallowance of the assessee's claim for deduction of Rs.16,40,116/- u/s.80P of the Act because the return of income was filed beyond the due date specified under Sec. 139(1) of the Act.

2. The assessee, a Credit Co-operative Society, filed its return for A.Y. 2018-19 on 30.03.2019, declaring Nil income after claiming deduction u/s.80P. However, the Centralized Processing Center (CPC) disallowed the deduction in an intimation issued under Sec. 143(1) on 25.06.2019 due to the belated filing of the return.

3. The CIT(Appeals) upheld the disallowance, citing the mandatory nature of filing the return before the due date under Sec. 139(1). The appellant's argument for the delay was dismissed based on legal provisions.

4. The ITAT observed that the amendment to Section 80AC of the Act, effective from 01.04.2018, required timely filing for deduction under Chapter VIA. However, the corresponding amendment in Section 143(1)(a) was only introduced in the Finance Act, 2021, effective from 01.04.2021.

5. The ITAT concluded that the CPC exceeded its jurisdiction by disallowing the deduction u/s.80P in the intimation dated 25.06.2019 for A.Y. 2018-19. As the relevant amendment was not in place at that time, the disallowance was deemed unjustified, leading to the allowance of the assessee's appeal.

6. The ITAT set aside the CIT(Appeals) order and vacated the disallowance of the deduction u/s.80P of Rs.16,40,116/- made by the Assessing Officer, ultimately allowing the appeal of the assessee based on the legal analysis and jurisdictional issues.