CHENNAI KULALARS CO-OPERATIVE CREDIT SOCIETY LIMITED REGD.NO.X 35, CHENNAI V. DCIT , CPC , BANGALORE

ITA 712/CHNY/2022

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1049 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Next Hearing Date: 25-09-2022
• Assessment Year: 2018-2019
• Appeal Filed On: 21-08-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: FORM 26AS
• Section: 10AA; 143(1); 80P

Judgement Text

आयकर अपीलीय अिधकरण ‘ए’ ायपीठ चे ई म । IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI माननीय +ी महावीर िसंह, उपा12 एवं माननीय +ी मनोज कु मार अ6वाल ,लेखा सद9 के सम2। BEFORE HON’BLE SHRI MAHAVIR SINGH, VICE PRESIDENT AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपीलसं./ITA No.712/Chny/2022 (िनधाBरणवषB / Assessment Year: 2018-19) Chennai Kulalars Co-operative Credit Society Limited (Regd. No. X 35) 86/1, Kandaswamy Koil Street, Kosapet, Chennai – 600 012. बनाम/ V s . DCIT CPC, Bangalore. थायीलेखासं. /जीआइआरसं. /P AN / G I R N o . AAC AC- 0 4 2 0 - B (अ पीलाथ /Appellant) : ( थ / Respondent) अपीलाथ कीओरसे/ Appellant by : Shri N. Arjunraj (CA) for S. Sridhar (Advocate) – Ld. AR थ कीओरसे/Respondent by : Shri AR V Sreenivasan (Addl. CIT) –Ld. DR सुनवाईकीतारीख/Date of Hearing : 26-09-2022 घोषणाकीतारीख /Date of Pronouncement : 12-10-2022 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. In this appeal, the only grievance of the assessee is denial of deduction u/s 80P by Centralized Processing Center (CPC) while processing the return u/s 143(1) vide order dated 16.10.2019 which has been rectified on 02.03.2020. The deduction has been denied on the ground that the return of income has not been filed within due date ITA No.712/Chny/2022 - 2 - as specified u/s 139(1). The due date in present case is 31.08.2018 whereas the return has been filed by the assessee only on 30.03.2019. 2. The Ld. AR submitted that such an adjustment could have been made by CPC only w.e.f. Assessment Year (AY) 2021-22 since the amendment to Sec. 143(1)(a) was made by Finance Act, 2021 w.e.f. 01.04.2021. For the same, Ld. AR drew our attention to the relevant amendment made by Finance Act, 2021. The Ld. Sr. DR relied on impugned order wherein learned firstappellate authority has relied on the provisions of Sec.80AC to confirm the adjustment so made in the intimation issued by CPC. Having heard rival submissions, the appeal is disposed-off 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: 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 ITA No.712/Chny/2022 - 3 - 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 ITA No.712/Chny/2022 - 4 - 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 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. Order pronounced on 12 th October, 2022. Sd/- (MAHAVIR SINGH) उपा12 /VICE PRESIDENT Sd/- (MANOJ KUMAR AGGARWAL) लेखासद9 /ACCOUNTANT MEMBER चे+ई/ Chennai; िदनांक/ Dated : 12-10-2022 JPV JPVJPV JPV आदेशकीVितिलिपअ6ेिषत/Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. यथ /Respondent 3. आयकरआयु (अपील)/CIT(A)4. आयकरआयु /CIT 5. िवभागीय ितिनिध/DR6. गाड फाईल/GF