For Assessment Year 2019-20, the CPC lacks jurisdiction under Section 143(1) to disallow a claim for deduction under Section 80P solely on the ground of belated filing of the return, as the enabling provision for such adjustment was introduced prospectively w.e.f. 01.04.2021.

O R D E R

Per Rahul Chaudhary, Judicial Member:

1. The present appeal preferred by the Revenue is directed against the Order, dated 23/10/2025, passed by the Additional/Joint Commissioner of Income Tax (Appeals), Gwalior [hereinafter referred to as the ‘CIT(A)’], whereby the Learned CIT(A) had allowed the appeal of the Assessee against the Intimation Order, dated 03/02/2021, passed under Section 143(1) of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’], for the Assessment Year 2019-2021.

2. The Revenue has raised following Grounds of Appeal:

“1. On the facts and in the circumstances of the case, the Addl./JCIT(A) has erred in law in allowing the assessee's claim of deduction under section 80P of the Income-tax Act, 1961, despite the fact that the return of income was not filed within the due date prescribed under section 139(1) of the Act.

2. On the facts and in the circumstances of the case, the Addl./JCIT(A) has failed to appreciate that the CBDT Circular F. No. 225/150/2020-ITA-II dated 30.09.2020 extended the due date only for filing belated returns under section 139(4) and revised returns under section 139(5), and not for original returns under section 139(1).

3. The Addl./JCIT(A) has erred in directing the Assessing Officer to allow deduction under section 80P of the Act, despite the statutory bar under section 80AC of the Act, which mandates filing of the return of income within the due date specified under section 139(1) for claiming deductions under Chapter VIA.”

3. The sole issue raised in the present appeal relates to claim of deduction under Section 80P of the Act. In the present case, the Assessee, a Co-operative Credit Society registered under Maharashtra Co-operative Societies Act, 1960, claimed deduction under Section 80P (2)(a)(i) of the Act in the return of income for the Assessment Year 2019-2020. The aforesaid return of income as processed under Section 143(1) of the Act and vide Intimation Order, dated 03/02/2021, Assessee’s claim for deduction under Section 80P (2)(a)(i) of the Act was rejected by the Central Processing Centre – Assessing Officer [hereinafter referred to as ‘CPC-Assessing Officer’]. Being aggrieved, the Assessee preferred appeal before Learned CIT(A) which was allowed by way of Impugned Order, dated 23/10/2025. Being aggrieved, the Revenue has now preferred the present appeal before the Tribunal on the ground reproduced at Paragraph 2 above.

4. We have heard both the sides and have perused the material on record. The contention of the Revenue is that in terms of the provisions contained in Section 80AC of the Act, the deduction claimed by the Assessee under Section 80P (2)(a)(i) of the Act could not have been allowed to the Assessee as the return of income for the Assessment Year 2019-2020 was filed by the Assessee after the due date of filing return of income specified under Section 139(1) of the Act. The contention of the Assessee is that the intimation issued under Section 143(1) of the Act did not provide any reasoning. Further, the CPC-Assessing Officer lacked jurisdiction to make disallowance of deduction claimed under Section 80P of the Act under Section 143(1) of the Act since the enabling provision were introduced by way of Finance Act, 2021.

5. We have given thoughtful consideration to the rival submissions. On perusal of Order passed by Learned CIT(A), we find that the Learned CIT(A) has granted relief to the Assessee by incorrectly relying upon Circular F.No. 225/150/2020-ITA-II dated 30/09/2020 issued by the Central Board of Direct Taxes which had extended the time limit specified under Section 139(4)/139(5) of the Act for the Assessment Year 2019-2020 till November 30, 2020. The aforesaid Circular did n