ITAT: Centralized Processing Centre Not authorized to Make Adjustment for Disallowance of Deduction under Section 80P
The Income Tax Appellate Tribunal (ITAT), Mumbai by its division member bench comprising of Justice Pavan Kumar Gadale
ITAT: Centralized Processing Centre Not authorized to Make Adjustment for Disallowance of Deduction under Section 80P
The Income Tax Appellate Tribunal (ITAT), Mumbai by its division member bench comprising of Justice Pavan Kumar Gadale (Judicial Member) and Om Prakash Kant (Accountant Member) ruled that the Centralised Processing Centre (CPC) was not authorized to make adjustment under Section 143(1) of the Income Tax Act, 1961 for disallowance of carry out such adjustments for disallowance of deduction under section 80P of the Income Tax Act (the Act).
The factual matrix of the case was that the Sai Prerana Co-op. Credit Society Ltd,- appellant/assessee on 19th September, 2017 filed a return of income claiming a deduction under Section 80P of the Act. While processing the return, the CPC denied the deduction claimed of Rs. 1,82,74,406 under Section 80P.
The Commissioner of Income Tax (Appeals) (CIT[A]) determined that the order merged with the assessment order dated 17th December 2019, by which the Assessing Officer denied the deduction.
The learned Counsel for the assessee submitted that power to make disallowance of deduction under the heading C- “Deductions in respect of certain incomes under Chapter VI-A”, while processing return under Section 143(1) only by the Finance Act, 2021 with effect from 1st April, 2022 prior to that there was no power available to the Assessing Officer to allow the claim made under the heading “C- deduction in respect of certain incomes” under Chapter VI-A.
The Counsel further submitted that assessment year in the year under consideration being assessment year 2007-2008 which is prior to empowering the CPC for carrying out such adjustments and therefore, making such adjustment was beyond the power of the CPC.
The ITAT concurred with the Counsel for the assessee who relied on the decision of the Tribunal in the case of Meghana Apartment Co-operative Housing Society Ltd. v. ITO and upheld that Ld. CPC was not authorized to carry out such adjustment for disallowance of deduction under Section 80P of the Act. The adjustment made by the CPC was accordingly deleted.