CPC not within Jurisdiction to Disallow Deduction u/s 80P of Income Tax Act: ITAT Allows West Bengal Cooperative Society's Claim [Read Order]

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) has held that the Central Processing Centre (CPC) was not within its jurisdiction to disallow a deduction claimed by a West Bengal cooperative society under Section 80P of the Income Tax Act, 1961.

The Assessee, West Bengal State Multipurpose Consumers Cooperative Federation Limited, a cooperative society registered under the West Bengal Co-operative Societies Act, 1961, filed its 2019-20 return of income on 03.10.2019. The due date was 30.09.2019, but the CBDT extended it to 31.10.2019.

 The CPC disallowed the deduction under Section 80P of the Income Tax Act, as the return was filed beyond the due date. The CPC's power to make prima facie adjustments was introduced by the Finance Act, of 2021, but only became effective on 01.04.2021.

The assessee argued that the CPC was not within its jurisdiction to make any such prima facie adjustment disallowing the deduction under Section 80P of the Income Tax Act, since such power was given to the CPC with effect from 01.04.2021 and also argued that it had filed the return of income within the due date prescribed under Section 139(1) of the Income Tax Act.

The Revenue contended that as the income tax return was filed beyond the due period, the CPC was within its power to make the prima facie adjustment disallowing the deduction under Section 80P of the act and further claimed that the assessee had failed to file the income tax return within the time period specified in Section 139(1) of the Income Tax Act.

The Two-Member Bench comprising Sanjay Garg (Judicial Member) and Manish Borad (Accountant Member) held that the CPC was not within its jurisdiction to make any such prima facie adjustment disallowing the deduction under Section 80P of the Income Tax Act, since such power was given to the CPC with effect from 01.04.2021

The Tribunal also held that the assessee had filed the return of income within the due date prescribed under Section 139(1) of the Income Tax Act and appeal filed by the assessee and directed the Assessing Officer (AO) to allow the claim of deduction under Section 80P of the Act at Rs. 1,82,65,272/-.

To Read the full text of the Order CLICK HERE

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