SALEM DISTT. CHILD WELFARE ORG.ASST.TCS LIMIED, SALEM V. ITO, WARD-1(1), SALEM

ITA 402/CHNY/2023

AI Insights

The case involves the Salem District Child Welfare Organization appealing against an intimation by the Centralized Processing Centre (CPC), which denied a deduction under Section 80P of the Income Tax Act during the processing of their return for the Assessment Year 2019-20. The CPC's denial was based on the return being filed after the due date. The tribunal referenced a previous decision (Chennai Kulalars Co-operative Credit Society Ltd. vs. DCIT) which supported the assessee's position that such an adjustment could not be made for the year in question. The tribunal agreed with the assessee, noting that the specific provisions allowing for the adjustment of deductions under Section 80P were not in effect until after the relevant assessment year.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 133922 (ITAT-CHENNAI)
• Duration Of Justice: 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-04-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 27-03-2023
• Other Referred Cases: Chennai Kulalars Co-operative Credit Society Ltd. vs. DCIT (ITA No.712/Chny/2022 dated 12.10.2022)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: FORM 26AS
• Section: 10AA; 143(1); 80P

Judgement Text

आयकर अपीलीय अिधकरण ‘बी’ ायपीठ चे ई म । IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI माननीय +ी मनोज कु मार अ/वाल ,लेखा सद4 एवं माननीय +ी मनोमोहन दास ाियक सद4 के सम8। BEFORE HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM, AND HON’BLE SHRI MANOMOHAN DAS, JUDICIAL MEMBER आयकर अपील सं./ ITA No. 402/Chny/2023 (िनधा@रण वष@ / Assessment Year: 2019-20) Salem District Child Welfare Org. Asst. TCS Limited 199/1, Sundar Nagar, Mallamooppampatty, Salem-636 302. बनाम / V s . Income Tax Officer Ward-1(1) Salem. थायी लेखा सं. /जीआइ आर सं. /P AN / G I R No . AAR AS -28 41-P (अपीलाथ$/Appellant) : (%&थ$ / Respondent) अपीलाथ$ की ओरसे/ Appellant by : Shri S.Sridhar (Advocate-Erode)-Ld. AR %&थ$ की ओरसे/Respondent by : Shri D.Hema Bhupal (JCIT) –Ld.DR सुनवाई की तारीख/Date of Hearing : 26-04-2023 घोषणा की तारीख /Date of Pronouncement : 26-04-2023 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2019-20 arises out of order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 20-01-2023 in the matter of an intimation issued by Centralized Processing Centre, Bengaluru (CPC) u/s.143(1) on 21-01-2021. The registry has noted a delay of 7 days in the appeal which stand condoned. The sole grievance of the assessee is denial of deduction u/s 80P by CPC while processing the return u/s 143(1) on the ground ITA No.402/Chny/2023 - 2 - that the return of income was not filed within due date as specified u/s 139(1). The due date in present case was 30.09.2019 whereas the return was filed by the assessee only on 30.11.2020. The Ld. AR submitted that such an adjustment could not be made in this year as held by this Tribunal in recent decision titled as Chennai Kulalars Co- operative Credit Society Ltd. vs. DCIT (ITA No.712/Chny/2022 dated 12.10.2022). A copy of the same has been placed on record. The ld. Sr. DR, on the other hand, submitted that such an adjustment was permissible. Having heard rival submissions, the appeal is disposed-0ff as under. 2. We concur with the submission of Ld. AR that this issue in covered in assessee’s favor by the cited decision wherein it was held by the co-ordinate bench as under: - 3. The relevant provisions of Section 143(1)(a) prescribing processing of return of income (as amended by Finance Act, 2018), as applicable to AY 2018- 19, read as under: 143(1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely:— (a) the total income or loss shall be computed after making the following adjustments, namely:— (i) any arithmetical error in the return; (ii) an incorrect claim, if such incorrect claim is apparent from any information in the return; (iii) disallowance of loss claimed, if return of the previous year for which set off of loss is claimed was furnished beyond the due date specified under sub-section (1) of section 139; (iv) disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return; (v) disallowance of deduction claimed under sections 10AA. 80-IA. 80- IAB. 80-IB. 80-IC. 80-ID or section 80-IE. if the return is furnished beyond the due date specified under sub- j section (1) of section 139; or (vi) addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the return: ITA No.402/Chny/2023 - 3 - It could be seen that sub-clause (v) covers only specified Sections and do not cover Sec.80P. In other words, no adjustment of deduction claimed u/s 80P could have been made while processing the return of income. 4. The sub-clause (v) has been amended by Finance Act, 2021 and the amended sub-clause read as under: - ...... (v) disallowance of deduction claimed under section 10AA or under any of the provisions of Chapter VI-A under the heading "C.—Deductions in respect of certain incomes", ifthe return is furnished beyond the due date specified under sub-section (1) of section 139: or ....... Section 80P fall under Chapter VI-A under the heading “C-Deductions in respect of certain incomes”. The rational for the amendment, as given in the memorandum explaining the provisions in the Finance Bill, 2021 is as under: - Rationalisation of the provision relating to processing of returned income and issuance of notice under sub-section (2) of section 143 of the Act. The existing provisions of clause (a) of sub-section (1) of section 143 of the Act provides that at the time of processing of return of income made under section 139, or in response to a notice under sub-section (1) of section 142, the total income or loss shall be computed after making the adjustments specified in clauses (i) to (vi) therein. It is proposed to amend the following provisions of sub-section (1) of section 143 of the Act,- (i) Amend sub-clause (iv) of clause (a) of sub-section (1) of the section 143 of the Act, to allow for the adjustment on account of increase in income indicated in the audit report but not taken into account in computing the total income. (ii) Amend sub-clause (v) of clause (a) of sub-section (1) of the section 143 of the Act so as to give consequential effect to amendment carried out in section 80 AC vide Finance Act, 2018. (iii) Amend the provisions of section 143 to reduce the time limit for sending intimation under sub-section (1) of section 143 of the Act from one year to nine months from the end of the financial year in which the return was furnished. Consequently, it is also proposed to reduce the time limit for issue of notice under sub-section (2) of section 143 of the Act from six months to three months from the end of the financial year in which the return is furnished. These amendments will take effect from 1 st April, 2021 5. It could thus be seen that the enabling provisions allowing specified adjustment for Sec. 80P u/s 143(1)(a) has been brought on statute only with effect from 01.04.2021 and before that no such adjustment of deduction u/s 80P could have been done by the CPC u/s 143(1)(a) even if the return of income was filed beyond due date as specified u/s 139(1). No doubt, the provisions of Sec.80AC mandate denial of deduction u/s 80P even for AY 2018-19. However, in our considered opinion, without there being corresponding enabling provisions u/s 143(1)(a), no such adjustment could have been made by CPC for AY 2018-19. The same is amply clear from the memorandum explaining the provisions in the Finance Bill, 2021 as extracted above. Considering the same, we direct revenue ITA No.402/Chny/2023 - 4 - to grant deduction u/s 80P as claimed by the assessee in the return of income. No other ground has been urged before us. 6. The appeal stand partly allowed. In the absence of any contrary decision on record, we direct revenue to grant impugned deduction to the assessee. 3. The appeal stand allowed in terms of our above order. Order pronounced on 26 th April, 2023. Sd/- ( MANOMOHAN DAS) ाियक सद4 / JUDICIAL MEMBER Sd/- (MANOJ KUMAR AGGARWAL) लेखा सद4 / ACCOUNTANT MEMBER चे6ई / Chennai; िदनांक / Dated : 26-04-2023 DS आदेश की Sितिलिप अ /ेिषत/Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. यथ /Respondent 3. आयकर आय ु त/CIT 4. वभागीय त न ध/DR 5. गाड फाईल/GF