Prima Facie Adjustment Made By CPC Towards Deduction U/s 80P Prior To Apr 01, 2021 Is Beyond Its Jurisdiction: Kolkata ITAT
Pankaj Bajpai
17 March 2024 5:30 PM IST
The Kolkata ITAT ruled that section 80AC of the Income tax Act puts a bar against claiming of deduction in respect of certain income provided under the head (C) of Chapter VIA which includes section 80P of the Act also if the return of income are not filed before the due date prescribed u/s. 139(1) of the Act.The Bench of Rajpal Yadav (Vice President) and Girish Agrawal (Accountant...
The Kolkata ITAT ruled that section 80AC of the Income tax Act puts a bar against claiming of deduction in respect of certain income provided under the head (C) of Chapter VIA which includes section 80P of the Act also if the return of income are not filed before the due date prescribed u/s. 139(1) of the Act.
The Bench of Rajpal Yadav (Vice President) and Girish Agrawal (Accountant Member) observed that “the issue is regarding prima facie adjustment made u/s. 143(1)(a)(v) of the Act and as discussed above, such power of making the prima facie adjustment towards deduction u/s. 80P of the Act came to CPC only from 1.4.2021 and thus, the alleged disallowance by CPC is beyond its Jurisdiction”. (Para 7)
As per the brief facts of the case, the assessee is a Registered Cooperative Society, formed by the residents of the locality of Bisarpara Kodalia, with the primary objective of accepting deposits of the members of the society and providing loan and credit facilities to them. The return filed by assessee was processed by disallowing deduction u/s 80P since return was not filed within the due date. The assessee thereafter filed Rectification of Mistake stating that assessee a Credit Co-operative Society dealing only with its members and its Income is exempt u/s 80P(2)(b) and Interest Income from West Bengal State Co-operative Bank is also exempt u/s 80P(2)(d). However, the CPC passed order u/s 154, determining total income which was processed originally u/s 143(1).
The Bench noted that the Central Processing Centre denied the deduction u/s. 80P of the Act solely for the reason that return was not filed within the due date.
In the provision of Section 143(1)(a)(v), the Bench found that an “amendment is brought in by Finance Act from 01.04.2021 w.e.f. 1.4.21 and before such amendment in place of the phrase section 10A or in any of the provisions of Chapter VIA under the head – the words “deductions in respect of certain income, previously which was provided as section 10AA, 80IA, 80IB, 80IC, 80ID or section 80IE of the Act were appearing.”
From perusal of the said amendment, the Bench noted that before Apr 01, 2021 there was no mechanism for the CPC to prima facie disallow the claim u/s. 80P and it was only from Apr 01, 2021 that such powers have been conferred with the CPC to make prima facie disallowance in case of the claim made u/s 10AA or deduction claimed under any of the provisions in Chapter VIA which, inter alia, includes 80P of the Act.
The ITAT therefore allowed assessee's appeal and held that the CIT(A) had erred in denying the deduction u/s 80P of the Act for Rs.19,42,264/-.
Counsel for Appellant/ Taxpayer: Indranil Banerjee
Counsel for Respondent/ Revenue: B.K Singh
Case Title: Bisharpara Kodalia Cooperative Credit Society Ltd. verses ITO
Case Number: ITA No.1248/Kol/2023
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