TMI Blog2023 (9) TMI 1220X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 became law, is made applicable w.e.f. 01/4/2021. The provision in the amended form was thus not on the statute at the time of processing of the relevant returns. There is thus no question of the same having been invoked for effecting the disallowance, as being claimed before us. Why, the processing of the return being machine-made, which could not possibly have been updated for the revised procedure prior to 28/3/2021, there is no question of disallowance u/s 80AC of the Act being carried out by the AO u/s. 143(1)(a)(v) of the Act prior to 01/4/2021. The only manner, therefore, whereby the impugned disallowance could be made on processing of a return u/s. 143(1)(a) of the Act is under sub-clause (ii) thereof, which is to be read along with Explanation below section 143(1) of the Act. The date of filing the return, it was submitted by Shri Suresh, is not an information required to be furnished under this Act to substantiate any entry. It cannot therefore be regarded as an invalid claim on the basis of inconsistency u/s. 143(1)(a)(ii) of the Act r/w Explanation thereto. The date of filing the return, he would add, appears only in the acknowledgement to the return, which cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsequent to its amendment by FA, 2018, in its relevant part, reads as under: Assessment. 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-section (1) of section 139; or (vi) addition of income appearing in Form 26AS..,,: Provided that no such adjustments shall be made unless an intimation is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the judicial precedence, and toward which aspect, though well-settled, we may refer to the decisions in Mavilayi Service Co-op. Bank Ltd. v. CIT [2021] 431 ITR 1 (SC) and Shri Bhagavati Textiles Ltd v. CIT [2000] 244 ITR 496 (Ker): (i) Taxing statutes, more so exemption provisions, are to strictly construed; (ii) section 80AC of the Act is mandatory in character; (iii) the charging and computation provisions form an integral part, so that in the absence of the latter, the former would fail; (iv) section 143(1)(a)(v) of the Act, prior to its amendment by Finance Act, 2021, did not include within its ambit the disallowance of deduction under Chapter VI-A(C) and, thus, u/s. 80P of the Act; and (v) section 143(1)(a)(ii) of the Act is prima facie inapplicable. 5.2 There was before us no dispute, nor could possibly be, qua the first two propositions, advanced with reference to the decision in Dilipkumar and Co. Section 143(1) is not a computational provision, but a procedural provision with a view to give effect to s. 80AC, on the statute w.e.f. 01/4/2006, and in the amended form w.e.f. 01/4/2018, the mandate of which is clear, i.e., for a valid claim u/s. 80P (r/w ss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f. a particular date and, besides, there being no vested right in procedure, it would apply irrespective of the year to which the return, to which it is applied, pertains. That is, is retroactive. Finance Act, 2021, received the assent of the Hon'ble President of India on 28.3.2021. As such, even assuming it to have a retroactive operation, i.e., for assessment year commencing 01.4.2018 and subsequent years, on which aspect it being a procedural provision, there could be no doubt, being only to give effect to the statutory mandate of section 80AC, even as explained in the Finance Bill, 2021, also referred to during hearing, it could only be while processing a return of income on or after 28.3.2021, while it would in any case be applicable for any processing on or after 01.4.2021. In other words, the amendment has been given an almost immediate effect. We state so by way of a passing reference only, with a view to emphasize that the Legislature, conscious of the mismatch that obtains resulting in substantive law applying differently across persons similarly placed, made the corrective applicable with immediate effect. Section 80AC, which provides for non-eligibility to deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the assertion by Ms. Devi, as the processing is by the Central Processing Centre (CPC), i.e., machine made, which runs on a software. The scope of section 143(1)(a)(v) could not possibly have been extended prior to 28.3.2021, only whereby it became law. In fact, disallowance in ITA Nos. 995/Coch/2022 and 47/Coch/2023 was admitted as u/s. 143(1)(a)(ii), and only for 95/Coch/2023 it was stated by Shri Suresh, the ld. counsel for the assessee, as made under subclause (v), even as there is nothing on record to exhibit so. This we may though add would be of no consequence as where there is power to justify the action, a nonmention or wrong mention of the provision would be of no moment [Hukumchand Mills Ltd. vs. State of Madhya Pradesh [1964] 52 ITR 583 (SC); IshaBeevi vs. TRO [1975] 101 ITR 449 (SC)] 5.6 We, accordingly, next examine s. 143(1)(a)(ii), reproduced supra. Explanation thereto, which only makes its reading complete, reads as under: - Explanation. For the purposes of this sub-section, (a) an incorrect claim apparent from any information in the return shall mean a claim, on the basis of an entry, in the return, (i) of an item, which is inconsistent with ano ..... X X X X Extracts X X X X X X X X Extracts X X X X
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