Case Law Details
Dagadudhondu Yeola Nagari Sahakari Patsanstha Maryadit Vs ITO (ITAT Pune)
CPC Cannot Deny 80P Deduction in 143(1) Before 01-04-2021 – Prima Facie Adjustment Held Invalid – ITAT Pune Allows Appeal
The ITAT Pune allowed the appeal of a co-operative society & held that CPC had no power to deny deduction under Chapter VI-A while processing return u/s 143(1)(a) prior to 01-04-2021. The CPC had disallowed deduction u/s 80P merely because the return was filed belatedly, but the Tribunal observed that such adjustment powers were introduced only by Finance Act 2021 through section 143(1)(a)(v).
Relying on several coordinate bench decisions, the Tribunal held that since the intimation denying deduction was issued before 01-04-2021, CPC exceeded its jurisdiction. Accordingly, the CIT(A)’s order was set aside & deduction u/s 80P amounting to ₹5,29,124/- was allowed, rendering alternate grounds infructuous.
Thus, the assessee’s appeal was allowed, reiterating that prima facie adjustments disallowing Chapter VI-A deductions were impermissible in pre-2021 processing.
FULL TEXT OF THE ORDER OF ITAT PUNE
The captioned appeal at the instance of assessee pertaining to the Assessment Year 2018-19 is directed against the order dated 11.08.2025 of National Faceless Appeal Centre, Delhi passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of the Rectification Order dated 03.08.2023 passed u/s.154 of the Act.
2. The sole grievance of the assessee is against the prima-facie adjustment made by the CPC denying deduction under Chapter VIA of the Act in the Intimation passed u/s.143(1)(a) dated 31.05.2019.
3. At the outset, ld. Counsel for the assessee submitted that case of the assessee is squarely covered by plethora of decisions where it has been consistently holding that the powers for making such prima-facie adjustment denying deduction under Chapter VIA of the Act for delay in filing the appeal have been conferred to the CPC from 01.04.2021 onwards and he therefore stated that the impugned disallowance deserves to be deleted.
4. On the other hand, ld. Departmental Representative supported the order of ld.CIT(A).
5. I have heard the rival contentions and perused the record placed before me. I observe that the assessee is a Cooperative Society and return of income for A.Y. 2018-19 has been furnished on 18.12.2018 which is beyond the prescribed due date of 31.10.2018. Assessee has claimed deduction u/s.80P of the Act at Rs.5,29,124/- but CPC vide Intimation dated 31.05.2019 has denied the said claim on account of delay in filing the return of income. I observe that the issue is no longer res integra by virtue of catena of decisions passed by this Tribunal.
6. So far as the issue raised by the assessee for the year under consideration that CPC was not having the powers to disallow the deduction claimed under Chapter VI if the return is furnished beyond the due date specified u/s.139(1) of the Act, I find that the said powers have been conferred to the CPC by the Finance Act, 2021 w.e.f. 01.04.2021 in section 143(1)(a)(v) of the Act subsequent to which the CPC is empowered to make prima-facie adjustment to disallow the claim of deduction u/s.10AA or deduction claimed under Chapter VIA if the return is furnished beyond the due date specified in sub-section (1) of section 139 of the Act under the provisions provided u/s.143(1)(a)(v) of the Act. This view has been consistently followed by this Tribunal and Coordinate Benches in plethora of decisions. Some of the decisions on this very issue are quoted below :
i. Pune Bench in the case of Narhari Maharaj Majoor Sahakari Sanstha Ltd. Vs. ITO – ITA No.1458/PUN/2025 order dated 16.07.2025
ii. Shiv Sahyadri Nagari Sahakari Patsanstha Maryadit in ITA No.1788/PUN/2024 order dated 07.11.2024.
iii. Coordinate Bench, Chandigarh in the case of Lanjani Cooperative Agri Service Society Ltd. vs. DCIT (2023) 146 com468 (Chandigarh-Trib.).
iv. Coordinate Bench, Lucknow in the case of Sahakari Ganna Vikas Samiti Ltd. V. ACIT (2024) 169 com300 (Lucknow-Trib.).
v. Coordinate Bench, Rajkot in the case of Chakargadh Seva Sahakari Mandali Ltd.V. DCIT (CPC) (2021) 154 com228 (Rajkot – Trib.).
7. Respectfully following the above decisions and finding that the alleged disallowance of deduction under Chapter VIA has been made by the CPC prior to 01.04.2021, I find that CPC has exceeded the jurisdiction and therefore the impugned disallowance is uncalled for. Finding of ld.CIT(A) is set aside and deduction u/s.80P of the Act at Rs.5,29,124/- stands allowed. Ground of appeal No.1 raised by the assessee is allowed.
8. Apropos to alternate Ground No.2 regarding 80P(2)(c)(ii) deduction at R.50,000/- is concerned, since deduction u/s.80P of the Act at Rs.5,29,124/- has been allowed, therefore, alternate ground becomes infructuous.
9. In the result, the appeal of the assessee is allowed as per the terms indicated hereinabove.
Order pronounced on this 12th day of February, 2026.
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