The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the disallowance made under Section 80 P of the Income Tax Act, 1961, as it was beyond the scope of adjustment under Section 143(1) of the Income Tax Act, 1961.
The assessee had appealed against the order passed by the Commissioner of Income Tax Appeals [CIT(A)] for the assessment year (AY) 2014-15.
In this case, the assessee is a cooperative society registered under the Maharashtra Cooperative Societies Act. For the AY 2014-15, the assessee filed its Income Tax Returns ( ITR ) and declared a total income of Rs. 38.20 lakhs.
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The assessing officer (AO) disallowed the deduction claimed by the assessee under section 80P of the Act amounting to Rs. 7,26,628. Although the assessee filed a rectification under Section 154 of the Income Tax Act, 1961, it was rejected.
It is to be noted that there was a delay of 2202 days in filing the appeal before the CIT(A). The CIT(A) did not condone the delay and dismissed the appeal filed by the assessee. Aggrieved by the above decision, the assessee appealed for relief before the ITAT.
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The main issue in this case relates to the disallowance of Rs. 7.26 lakhs under Section 80 P of the Income Tax Act, 1961.
Read More: 80P Deduction cannot be claimed beyond due date of ITR Filing u/s 139(1): ITAT [Read Order]
The counsel on behalf of the assessee submitted that the prima facie adjustment under section 143(1)(a) of the Act to disallow the claim under section 80P of the Income Tax of the Act cannot be made without granting an opportunity of being heard to the assessee.
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The ITAT relied on the decision of the ITAT in the case of Vishva Villa Co-op Housing Society Ltd. vs. ITO in ITA No.682, 683 & 684/M/2024, in which the co-ordinate bench of the tribunal held that disallowance made by the CPC under Section 143(1)(a) of the Act on the claim of deduction under Section 80P of the Income Tax Act, 1961, is beyond the scope of adjustment under Section 143(1) of the Act.
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The ITAT, comprising of Judicial Member Beena Pillai, allowed the appeal filed by the assessee and directed the AO to delete the disallowance made under Section 80P of the Income Tax Act, 1961.
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