Vikram Singh Yadav ORDER
Vikram Singh Yadav, Member (A)
1. This is assessee's appeal against the order of the ld. CIT(A), NationalFaceless Appeal Centre (NFAC), Delhi, dated 21.04.2022, for the Assessment Year2018-19, taking the following grounds of appeal:-
(i) The order/intimation under section 143 (1)(a) & 154 passed by theAssessing Authority and that of the Appellate Authority confirming the same areillegal, unjust, arbitrary and opposed to the facts of the case and need to be quashed and addition to be deleted in toto and the tax andinterest be reduced to nil.
(ii) the Authorities below, while considering the claim of deduction undersection 80-P amounting to Rs. 2,27,994/-without complying with provisions ofprovio l & 2 to section 143 (1)(a), i.e. opportunity of hearing and withoutconsidering objections of the assessee that there is no provision in thissection to make this type of adjustment and without following the principles ofnatural justice to give opportunity of hearing, in spite of there being nodisallowance of the same, wrongly giving priority to the provisions of section80AC of the Income Tax Act introduced with effect from 01-04-2018.
(iii] The provisions of section 80AC are violative of the constitutionbecause the same have denied the benefits of law of land and that too at a dis-proportionately high cost compared to other categories of assessees when a veryreasonable cost is fixed which is with the object of advisory in nature.
(iv) The slight delay in completing the audit by the Govt. of Department andthe assessee which is of human nature, without any deliberate, malafide, becauseof reasonable and sufficient cause, these need to be reasonably, sympatheticallyand favourably considered.
2. The Assessee filed its return of income declaring total income at Rs. 'Nil'after claiming deduction u/s 80P of the Income-tax Act, 1961 (in short, 'the I.T. Act' ) amounting to Rs. 2,27,994/-. The return wasprocessed by the CPC, Bangalore u/s 143(1) of the I.T. Act, denying the deductionclaimed u/s 80P. The Assessee filed rectification application before the AO,stating that the deduction claimed had wrongly been denied by the CPC. The AO,rejecting the application, observed that the return of income had been filedlate; that the due date u/s 139 (1) of the Act was 27.12.2018, whereas thereturn had been filed on 13.10.2018; and that according to section 80AC, after01.04.2018, and no deduction under Chapter VIA heading 'C' would be allowedunless the return was filed before the due date u/s 139(1) of the I.T. Act.
3. In its appeal before the Ld. CIT(A), the Assessee contended that the AuditReport under the Act had taken time to complete, which was the reason for thedelay in filing the return, which delay was beyond the Assessee; that the AuditReport was dated 27.12.2018, and it was only after filing thereof, that thereturn was filed on 13.10.2018; that the amendment under section 80C is advisoryand not mandatory; that no opportunity of hearing had been given to theAssessee; and that such an adjustment could not be made u/s 143(1) of the Act.Reliance was placed on, inter alia, 'M/s Chirakkal Service Cooperative BankLtd.', 384 ITR 190 (Kerala), holding that even if the return was filed late, the deduction u/s 80P of the Act should be allowed, as long asthe return is filed within the time allowed u/s 139(4) of the Act.
4. By virtue of the impugned order, the ld. CIT(A) dismissed the appeal. Itwas observed that the provisions of section 80AC are applicable from assessmentyear 2018-19 onwards; that as per these amended provisions, no deduction underChapter VIA, Part C can be allowed, unless the return is filed within the timeallowed u/s 139(1) of the Act; that the amendment covers deduction u/s 80P aswell; that since the provision uses the expression 'shall', there is noscope to consider reasonable cause, etc.; that in this case, the Audit Reporthad been obtained after the date prescribed under section 139(1) and, as such,it is not a case where the Audit Report was uploaded within time but the returnwas filed late; that the return having been filed late, in accordance with theprovisions of section 143(1) (a) (ii), the provisions of section 80AC wouldlimit and disallow the deduction u/s 80P; and that the decisions relied uponpertain to the pre-amended provisions of section 80AC and, therefore, they arenot applicable.
5. None appeared on behalf of the Assessee. However, the Ld. counsel for theAssessee, through his written submissions, relied on the recent decision of theITAT, Bench 'B', Chandigarh ITA No. 447/Chd/2022 order dated 20.3.2023, andhas also placed reliance on the earlier decision of the ITAT, SMC Bench,Chandigarh, rendered on 30.08.2022 in 'The Lanjani Co-operative Agri Service SocietyLtd., VPO Lanjani, Kangra (HP) v. The DCIT (CPC) Bangaluru' , ITA No.332/Chd/2021, for assessment year 2018-19 and other cases.
6. On the other hand, the ld. DR has placed strong reliance on the impugnedorder.
7. We have heard the rival contentions and have perused the material onrecord. It is not in question that section 80AC of the I.T. Act, as amended byFinance Act, 2018, stipulated that for claiming deduction u/s 80P of the Act,the return of income was required to be filed before the due date, as prescribedby section 139(1) and in the present case, the return was filed belatedly.However, it was only by the amendment to section 143(1) (a)(v) brought in byFinance Act, 2021, that the CPC can be said have been vested, exercising powersu/s 143(1)(a), to make disallowance on the ground of belated return. Prior tothat, as per the un-amended provisions, the AO could disallow a claim u/s 143(1)(a) only on the grounds of arithmetical error or that the Assessee had made anincorrect claim, etc. Reference, in this regard, may be had to 'FatehrajSinghvi & Ors. v. UOI and Ors'; 289 ITR 602 (Kar.). It goes without sayingthat in the absence of enabling powers, no disallowance can be made. As such,enabling provisions being absent, the CPC did not have the jurisdiction to makethe disallowance in question, in the order u/s 143 (1) of the Act. For this, we find support from 'The Lanjani Co-operative Agri Service Society Ltd.,VPO Lanjani, Kangra (HP) v. The DCIT (CPC) Bangaluru' (supra).
8. For the above discussion, finding merit in the grievance raised by theAssessee, the same is accepted. The order under appeal is accordingly reversed.Consequently, the disallowance of Rs. 2,27,994/- is cancelled.
9. In the result, the appeal is allowed.
Order pronounced on 05.04.2023
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