CPC cannot Deny S. 80P Deduction to Cooperatives for AY 2018–19: ITAT clarifies Prima Facie Adjustment Begins from AY 2021–22

The Income Tax Appellate Tribunal (ITAT) has clarified that the Central Processing Centre (CPC) cannot make a prima facie adjustment to deny a cooperative society's claim for deduction under Section 80P for the Assessment Year 2018-19. The tribunal ruled that the specific power for the CPC to make such adjustments during the initial processing of returns was introduced only from AY 2021-22. Therefore, for earlier years like AY 2018-19, any disallowance of the 80P deduction can only be made through a regular scrutiny assessment process, not through an intimation under Section 143(1). This decision provides significant relief to cooperative societies, as it prevents the automatic denial of their claimed deductions by the CPC for prior assessment years and ensures that any such disallowance is subject to the due process of a full assessment.