Patna HC: Disciplinary Authority Cannot Impose Major and Minor Penalties in a Single Order  ||  Calcutta HC: Landlord Decides His Residential Needs; Courts Cannot Set Living Standards in Eviction  ||  Orissa HC: Second Marriage During Subsistence of First Remains Invalid Even After First Wife's Death  ||  Karnataka HC: Appeals Against Acquittal in Bailable Offences Lie Only Before High Court  ||  Supreme Court: Stamp Duty on an Agreement to Sell is Leviable Only if Possession is Transferred  ||  SC: Motive Becomes Irrelevant When Direct Evidence Such as a Dying Declaration is Available  ||  Supreme Court Issues Directions to CoC in Builder Insolvency Cases To Protect Homebuyers’ Interests  ||  MP High Court: Women Retain Reservation Benefits After Marriage if Caste is Recognized in Both States  ||  Allahabad HC: Police Must Prosecute Informants of False Firs, and IOs May Face Contempt if They Fail  ||  MP HP: Over-Age Candidate Cannot Claim Age Relaxation Due to Delay in Earlier Recruitment    

The Mundkhar Co-Operative Society Limited vs. Income Tax Officer - (Income Tax Appellate Tribunal) (05 Apr 2023)

In the absence of enabling powers, no disallowance can be made

MANU/IG/0050/2023

Direct Taxation

The Assessee filed its return of income declaring total income at Rs. 'Nil' after claiming deduction under Section 80P of the Income-tax Act, amounting to Rs. 2,27,994. The return was processed by the CPC, under Section 143(1) of the I.T. Act, denying the deduction claimed under Section 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 filed late; that the due date under Section 139 (1) of the Act was 27th December, 2018, whereas the return had been filed on 13th October, 2018; and that according to section 80AC, after 1st April, 2018, and no deduction under Chapter VIA heading 'C' would be allowed unless the return was filed before the due date under Section 139(1) of the I.T. Act.

By virtue of the impugned order, the learned CIT(A) dismissed the appeal. It was observed that the provisions of section 80AC are applicable from assessment year 2018-19 onwards; that as per these amended provisions, no deduction under Chapter VIA, Part C can be allowed, unless the return is filed within the time allowed under Section 139(1) of the Act.

It is not in question that, Section 80AC of the I.T. Act, as amended by Finance Act, 2018, stipulated that for claiming deduction under Section 80P of the Act, the return of income was required to be filed before the due date, as prescribed by 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 by Finance Act, 2021, that the CPC can be said have been vested, exercising powers under Section 143(1)(a), to make disallowance on the ground of belated return. Prior to that, as per the un-amended provisions, the AO could disallow a claim under Section 143(1) (a) only on the grounds of arithmetical error or that the Assessee had made an incorrect claim, etc. In the absence of enabling powers, no disallowance can be made. Enabling provisions being absent, the CPC did not have the jurisdiction to make the disallowance in question, in the order under Section 143 (1) of the Act. The order under appeal is accordingly reversed. Consequently, the disallowance of Rs. 2,27,994 is cancelled. Appeal allowed.

Tags : ASSESSMENT   DISALLOWANCE   LEGALITY  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved