CPC not Authorized to Carry Out Adjustment for Disallowance of Deduction u/s 80P Income Tax Act: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Mumbai Bench held that Centralized Processing Centre (CPC) not authorized to carry out adjustment for disallowance of deduction under Section 80P of the Income Tax Act, 1961.

The assessee, Sai Prerana Co-op. Credit Society Ltd, filed return of income claiming deduction under Section 80P of the Income Tax and while processing the return, the CPC denied the deduction claimed of Rs. One crore under Section 80P of the Income Tax Act.

On further appeal, the CIT(A) held that the order under Section 143(1) of the Income Tax Act has merged with the assessment order under Section 143(3) of the Income Tax Act wherein the Assessing Officer has disallowed deduction under Section 80P of the Income Tax Act.

The Counsel for the assessee contended that the CPC was not authorized to make adjustment under Section 143(1) of the Income Tax Act as the issue of deduction under Section 80P of the Income Tax Act was of debatable nature.

The Counsel further contended that for the assessment year under consideration, being the assessment year 2007-08 which is prior to empowering the CPC for carrying out such adjustments and therefore, making such adjustment was beyond the power of the CPC and relied on the decision of the Tribunal in the case of Meghana Apartment Co-operative Housing Society Ltd. v. ITO.

The Departmental Representative (DR) submitted that the Revenue has preferred appeal against the said order of the CIT(A) before the ITAT, hence matter being subjudice addition should not be deleted.

The Bench comprising Om Prakash Kant, Accountant Member and Pavan Kumara Gadale, Judicial Member observed that “We uphold that the CPC was not authorized to carry out such adjustment for disallowance of deduction under Section 80P of the Income Tax Act. The adjustment made by the CPC is accordingly deleted on this ground also.”

To Read the full text of the Order CLICK HERE

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