Adjustments for disallowance of deduction u/s 80P not authorized to be carried out by CPC

Sai Prerana Co-op. Credit Society Ltd. Vs ITO (ITAT Mumbai)

ITAT Mumbai held that CPC (Centralised Processing Centre) is not authorized to carry out adjustments for disallowance of deduction under section 80P of the Income Tax Act.

Facts- The assessee filed return of income claiming deduction u/s 80P of the Act on 19.09.2017. While processing the return, the Ld. CPC denied the deduction claimed of Rs.1,82,74,406/- u/s 80P of the Act. On further appeal, the Ld. CIT(A) held that the order u/s 143(1) of the Act has merged with the assessment orderu/s 143(3) of the Act dated 17.12.2019 wherein the Assessing Officer has disallowed deduction u/s 80P of the Act and therefore, no intervention was required as the subject matter and the issue involved has merged with the subsequent assessment order challenged by the assessee.

Conclusion- In Meghana Apartment Co-operative Housing Society Ltd. vs. ITO it was held that the Assessing Officer could not have disallowed the deduction claimed by the assessee under section 80P of the Act in all the three years under consideration, whil processing the returns of income us 143(1) of the Act.

Held that the Ld. CPC was not authorized to carry out such adjustment for disallowance of deduction u/s 80P of the Act. The adjustment made by the CPC is accordingly deleted on this ground also.

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