Federation of AP Cooperative Urban Banks & Credit Societies Ltd. Vs ITO (ITAT Hyderabad)
80P Cannot Be Disallowed in 143(1) — ITAT Deletes CPC Adjustment
CPC, while processing the return u/s 143(1), disallowed Assessee’s Section 80P deduction of ₹36,70,431, solely on the ground that the return was filed after the due date u/s 139(1). CIT(A) upheld the adjustment.
Before the ITAT, Assessee first sought condonation of 290-day delay, explaining that CIT(A)’s order was emailed to an old email ID of a retired CEO & therefore never reached the management. Tribunal accepted the explanation—supported by medical records & affidavit—& condoned the delay, following the Supreme Court’s liberal approach in Vidya Shankar Jaiswal (2025).
On merits, ITAT held that CPC had no authority to disallow Section 80P deduction under Section 143(1) for AY 2019–20 because:
- Section 143(1)(a)(v) (pre-amendment) permitted adjustments only for deductions under 10AA, 80-IA/IB/IC/ID/IE,
- Section 80P was added only from 01.04.2021 (Finance Act 2021) & cannot apply retrospectively,
- A specific clause overrides the general clause under Section 143(1)(a)(ii).
Relying on Narhari Maharaj Sahakari Sanstha & Pahalampur Samabay Krishi Unnayan, ITAT held that the Section 80P deduction could not be touched under 143(1) for this year.
Held: CPC exceeded its jurisdiction; Section 80P disallowance deleted.
