2023 (11) TMI 1247 - AT - Income Tax

Rectification u/s 254 - Deduction u/s. 80P denied by way of prima facie adjustment u/s. 143(1)(a)(v) - ITAT allowed deduction - HELD THAT - ITAT has given a detailed legal as well as factual finding has to why the denial of claim of deduction u/s. 80P cannot be made by way of prima facie adjustment u/s.143(1)(a)(v) of the Act for the impugned assessment order i.e. A.Y. 2019-20 2022 (10) TMI 1237 - ITAT RAJKOT . We observe that ITAT has given a detailed factual and legal finding/discussion while deciding this issue. Further the decision cited by Department is not on the issue of denial of claim by way of adjustment made u/s. 143(1)(a)(v) of the Act and has been rendered on its own set of facts while the assessee s facts are on a different footing. Accordingly on going through the order passed by the ITAT we find no apparent mistake in the order passed by the ITAT so as to call for any interference. Miscellaneous Application filed by the Department is dismissed.

Summary

Issues involved: The Department filed a Miscellaneous Application against the order passed by ITAT, Rajkot Bench in ITA No. 33/Rjt/2022, regarding the denial of deduction u/s. 80P of the Act based on the timing of filing the return of income.

Issue 1 - Denial of deduction under section 80P:
The Department contended that the deduction u/s. 80P cannot be denied to the assessee solely based on the late filing of the return of income, citing a decision of the Madras High Court. The ITAT considered all aspects and amendments in section 143(1)(a)(v) of the Act, noting that the denial of the claim under section 80P would not fall under prima facie adjustment under section 143(1)(a)(v) for the relevant assessment year. The ITAT highlighted that the amendment introduced w.e.f. 01-04-2021 does not apply to the impugned assessment year, and denial of the claim under section 80P is not within the scope of prima facie adjustment. The case was restored to the file of the Ld. CIT(Appeals) for fresh adjudication.

Issue 2 - Incorrect claim adjustment under section 143(1)(a)(ii):
The ITAT analyzed whether the case of the assessee would fall under the purview of prima facie adjustment under section 143(1)(a)(ii). It was observed that the scope of adjustments under this provision, as explained in the Explanation, does not include the denial of deduction claimed by the assessee for late filing of the return of income. The ITAT referenced previous decisions and held that the case of the assessee would not fall within the purview of prima facie adjustment under section 143(1)(a)(ii).

Conclusion:
The ITAT dismissed the Miscellaneous Application filed by the Department, as it found no apparent mistake in the order passed in ITA No. 33/Rjt/2022. The decision was pronounced in the open court on 08-11-2023.