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ISSUE FOR DISCUSSION
Section 80AC of the Income Tax Act, 1961 (“the Act”) provides that, from assessment year 2018-19 onwards, where any deduction is admissible under Part C of Chapter VI-A (including section 80P), the deduction shall not be allowed unless the assessee furnishes a return of income on or before the due date specified under section 139(1) of the Act.
Section 143(1)(a) provides for certain adjustments when processing the return of income. Clause (v) of that section, as it stood from AY 2018-19 to AY 2020-21, provided for disallowance of deduction claimed under sections 10AA, 80-IA, 80-IB, 80-IC, 80-ID or 80-IE, if the return was furnished beyond the due date prescribed under section 139(1). With effect from AY 2021-22, the scope of the disallowance is widened. It now provides for disallowance of deduction claimed under section 10AA or Part C of Chapter VI-A under specified circumstances.
The issue has arisen before the Tribunal for the periods from AY 2018-19 to AY 2020-21, whether belated filing of return of income could attract disallowance of deduction claimed under any of the sections of Part C of Chapter VI-A, such as under section 80P, while processing the return of income under section 143(1)(a). In other words, whether an adjustment can be made by disallowing a deduction claimed, under one of
