The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that the Income Tax deduction cannot be denied on the ground of a return filed belatedly under Section 139(4) of the Income Tax Act, 1961.
The assessee has challenged the denial of deduction claimed under Section 80P of the Income Tax Act while drawing intimation under Section 143(1) of the Income Tax Act on the premise that the assessee has not filed the return of income within the due date specified under Section 139(1) of the Income Tax Act.
The counsel submitted that the deduction has been denied taking shelter of Section 80AC(ii) of the Income Tax Act. It was submitted that the assessee has filed and uploaded the return which is belated by only one day on account of technical difficulties in the Income-tax site.
It was further submitted that in the instant case, the intimation has been drawn under Section 143(1) of the Income Tax Act which specifies the nature of adjustments under Section 143(1)(a) of the Income Tax Act permissible for adjustments.
The Departmental Representative relied upon the action of the Revenue authorities and submitted that in view of express provisions of Section 80AC of the Income Tax Act, the Revenue authorities were fully justified in denying the deduction where the return was filed beyond the date specified under Section 139(1) of the Income Tax Act.
An identical issue had come up in the case of Kishorepur Paschimanchal SKUS Limited wherein after taking note of provisions of Section 80AC and Section 143(1) of the Income Tax Act and subsequent amendment thereto, it was concluded that such adjustments under Chapter VI-A were not permissible under Section 143(1) of the Income Tax Act.
The Two-bench member comprising of Kul Bharat (Judicial member) and Pradip Kumar Kedia (Accountant member) held that Central Processing Centre (CPC), Bengaluru has committed prima facie error in making adjustments to the returned income on account of deduction claimed under Section 80P of the Income Tax Act while drawing intimation under Section 143(1) of the Income Tax Act.
Therefore, the order of the Commissioner of Income Tax (Appeal) was set aside and the designated authority/CPC, Bengaluru was directed to restore the deduction claimed under Section 80P of the Income Tax Act.
Thus, the appeal of the assessee was allowed.
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