Sri. Sanjay Ramprakash Saxena, Bangalore V. Deputy Commissioner of Income-Tax, CPC, , Bengaluru

ITA 176/BANG/2023

AI Insights

The case involves Shri Sanjay Ramprakash Saxena, an employee of Wipro Ltd., who appealed against the order of the National Faceless Appeal Centre (NFAC), Delhi, which had rejected his appeal concerning the processing of his income tax return for the assessment year 2009-10. The primary issues revolved around the incorrect processing of deductions and exemptions claimed by the assessee, which were not allowed by the CPC during the initial processing of the return under section 143(1)(a) of the Income Tax Act, 1961. The CIT(A) upheld the CPC's decision, leading to the appeal before the Tribunal. The Tribunal found that the CPC and CIT(A) had not adequately addressed the merits of the case and had incorrectly applied the law, particularly concerning the provisions under sections 154 and 10(13A) of the Act.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 124880 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 16-05-2023
• Assessment Year: 2009-2010
• Appeal Filed On: 14-03-2023
• Other Referred Cases: T S Balaram, ITO Vs. Volkart Brothers (1971) 82 ITR 40 (SC), Shri. Suhas Suresh Shet Vs. ITO [2022] 140 taxmann.com 96 (Bangalore \\u2013 Trib.), Majji Sannemma @ Sanyasirao vs Reddy Sridevi & Others in Civil Appeal No. 7696 of 2021 rendered by Honable Supreme Court of India order dated 16.12.2021
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BHARATH SHETTY
• Section: 154; 15; 80C; 250; 192; 139(1); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA No.176/Bang/2023 Assessment Year : 2009-10 Shri. Sanjay Ramprakash Saxena, G1, SMR Devmuk Sy. No.97/104, 9 th Main, Bannerghatta Road, Vijaya Bank Layout, Bengaluru – 560 076. PAN : AOZPS 7209 E Vs. DCIT, CPC, Bengaluru. APPELLANTRESPONDENT Assessee by:Shri.Bharath Shetty, CA Revenue by :Shri.Ganesh R. Ghale, Standing Counsel. Date of hearing:17.05.2023 Date of Pronouncement:25.05.2023 O R D E R Per Laxmi Prasad Sahu, Accountant Member : This is an appeal filed by the assessee against the order passed by the National Faceless Appeal Centre (NFAC), Delhi, (DIN & Order No. ITBA/NFAC/S/250/2022-23/104374830(1))on06.07.2022, against the rejecting the appeal filed by the assessee on the following grounds of appeal : 1.T h e L e a r n e d C IT (A ) e r r e d i n pas s i n g t he o r d e r i n th e ma n ne r h e h a s do n e a n d o n t h e f a c t s a nd in t he c i r c u ms ta n c e s of t h e ITA No.176/Bang/2023 Page 2 of 6 c a s e , t h e le a r n e d C IT ( A ) o ug ht to h a v e a c c e pt e d t h e c l a i ms o f th e A p pe l l a nt a n d a l l ow e d t he a pp e a l. 2.T h e ad di t i on i n t h e i nt i ma ti on u/ s 1 43( 1) ar e w i t ho u t an y g r ou n ds , a nd is n ot cov e r e d i n a n y o f t he pe r mi t t e d ad j us t me n t u /s 1 4 3( 1) ( a) , he n c e s qu a r e l y c o v e r e d w i t hi n t he s c o pe o f r e c t i f i c at i o n u/s 1 54. T h e L e a r n e d C I T ( A) h as g r o s s l y e r r e d i n h o ldi n g t h e a d dit io ns a s n o t ' m i s t ak e a p pa r e n t o n r e c or d' a nd n ot c o v e r e d u/ s 1 5 4, d i s m is si n g t h e App e a l . 3.T h e L ear ned C IT( A ) i s not jus tif ie d i n d ism is si ng the appe al b y uph old in g the ord e r u/s 15 4 d e nyin g t he HR A E x e mptio n c l aim ed u/ s 10( 13 ) of Rs 1 ,0 3, 77 2 and par tl y all ow i ng t h e d e du c tion u/ s 80C as aga inst th e cl ai m ma de b y t he ap pell an t i n t h e r etu rn of i n com e fo r t h e AY 20 09- 10,a nd t ax ing t he p e rqui sit es va lue of R s . 12,3 35 tw ic e , und e r the fa c ts an d in t he ci r cums ta nc e s of t h e Ap pell ant' s c as e . 4.The learned CIT(A) has passed order under section 250 without application of mind and without considering the issues raised in the grounds of appeal. 5.T h e A ppel la nt cr av es l e a v e to ad d, am end, alt er or del et e an y o f the gr ou nd s of a pp e al and p ray s t hat t h e app eal ma y be a llow ed. 2. The brief facts of the case are that the assessee Mr. Sanjay R. Saxena is an employee of Wipro Ltd., filed his return of income under section 139(1) of the Income Tax Act, 1961 (hereinafter called ‘the Act’), declaring total income of Rs.16,38,045/- under the head “Income from Salary” and he also claimed loss from house property of Rs.15,165/- meaning thereby the gross total income declared by the assessee of Rs.16,22,880/- and claimed the deduction under chapter VI A of Rs.1 lakh under section 80C, 80CC, 80CCD and Rs. 16,429/- u/s 80D, the net taxable income was shown as Rs.15,06,451/-. During the course of processing of return under section 143(1)(a) of the Act wherein disallowances were made which is as under: i.Value of perquisites under section 17(2) of the Act - Rs.12,335/- (twice considered) ii.HRA exemption under section 10(13A) of Rs.1,03,772 /- iii.Deduction under Chapter VI A – Rs.94,000/-. ITA No.176/Bang/2023 Page 3 of 6 3. The above benefits were not granted to the assessee and assessed the income at Rs.17,16,560/-. The assessee filed rectification application against the intimation u/s 143(1)(a) which was disposed off by the CPC (Central Processing Centre) on 29.08.2019 and rejected the rectification filed by the assessee under section 154 of the Act. Aggrieved from the above order passed by the CPC, the assessee filed appeal before the CIT(A). The CIT(A), after relying on the judgment of Hon’ble Supreme Court in the case of T S Balaram, ITO Vs. Volkart Brothers (1971) reported in 82 ITR 40 (SC) dismissed the appeal of the assessee observing that the issues raised by the assessee are not covered under section 154 of the Act. 4. Aggrieved from the above order, the assessee filed appeal before the Tribunal on 15.03.2023 on the dealy of 192 days. The affidavit from previous Authorized Representative has been obtained dated 19.04.2023 which is placed at Paper Book page Nos.70 to 71 explaining the reasons for delay in filing appeal. In support of condonation for delay in filing appeal he also relied on the judgments in the case of Shri. Suhas Suresh Shet Vs. ITO [2022] 140 taxmann.com 96 (Bangalore – Trib.) & Majji Sannemma @ Sanyasirao vs Reddy Sridevi & Others in Civil Appeal No. 7696 of 2021 rendered by Honable Supreme Court of India order dated 16.12.2021. 5. The ld. AR reiterated the submissions made before the lower authorities and he submitted that the CIT(A) dismissed the appeal of the assessee without going into the merits of the case. All the documents were produced before CIT(A) in support of its claim for deduction / exemptions. Form No.16 was also produced which is an income certificate issued by the employer after considering the entire income/expemption/deductions of the assessee and ITA No.176/Bang/2023 Page 4 of 6 deductions claimed has also been allowed in Form 16. During the course of processing of return, the CPC has not granted the deductions / exemptions without giving any reasons and the rectification application has also been dismissed without any reasons which is also placed in the Paper Book. The detailed written submissions were placed before the CIT(A) which the learned CIT(A) has incorporated in his order. Accordingly, the CIT(A) was not justified for not accepting the claim of the assessee and the mistakes were apparent from the record. 6. On the other hand, the learned DR vehemently opposed the condonation petition filed by the assessee. The learned DR relied on the order of the lower authorities and submitted that the benefits claimed by the assessee is not covered under section 154 of the Act. Therefore, the CIT(A) has rightly dismissed the appeal of the assessee and the issue requires verification as observed by the CIT(A). 7. During the course of hearing the ld. AR. dully explained the reason for delay for filling appeal as stated above. Accordingly, the delay in filing the appeal is condoned. 8. After hearing both the parties and perusal of the orders of theauthorities below, we noted that the assessee is an employee of the Wipro Ltd., and the assessee has been issued Form 16 by his employer which is placed on record at Paper Book Page Nos.38 to 40. While processing the return filed by the assessee, the CPC did not allow the exemption and deductions and twice considered the value of perquisites as noted (supra). The assessee filed rectification application under section 154 against the processing of return u/s 143(1)(a) which is also not accepted by the Department and passed the order ITA No.176/Bang/2023 Page 5 of 6 without giving reasons for not giving credit to the assessee. The CIT(A) also did not accept the appeal filed by the assessee. On going through the order passed under section 154 which is placed at Paper Book Page Nos.25 to 31, we noted that at internal Page No.5 of the order under the “notes” at Sl. No.4 in which it has been stated as under: “If you are not satisfied with the intimation / order, you may seek rectification as per section 154 by filing an application electronically for rectification to CPC for which details are available on website https://www.incometax.gov.in. It is clear from the above noted points from the CPC that the intimation itself is covered for rectifying the mistakes as per section 154 of the Act to which the CIT(A) has not accepted. On the one hand, the Income Tax Department itself has stated that the intimation is covered under section 154 of the Act and on the other hand, the CIT(A) has dismissed the appeal without deciding issues on merits of the case, which is wrong. On going through the Paper Book filed by the assessee in Form 16 which is placed at Page Nos. 38 to 40 of the Paper Book in which the value of perquisite under section 17(2) of the Act of Rs.12,335/- has been added into the income of the assessee whereas it has been twice considered by the CPC which is wrong. Therefore, the addition of Rs.12,335/- is to be deleted. In Form 16, the employer has also given exemption under section 10(13A) for HRA of Rs.1,03,772/- and employer has also granted deduction under Chapter VI A of Rs.1,16,429/- out of which Rs.94,000/- is breakup of LIC premium, unit linked insurance plan, housing loan principal repayment and employee PF totaling to Rs.94,000/- has also been allowed under section 80C. Without rejecting the Form No. 16 by the revenue authorities they are bound to accept the income/exemption/deductions and other contents therein shown in the Form No. 16 issued by the employer. The section 192 has cast duty upon the employer for deducting tax on the estimated income of employees at per the rate in force for the particular financial year and the employer has to issue Form No. 16 as ITA No.176/Bang/2023 Page 6 of 6 per Rule 31(1)(a). Accordingly, considering the totality of the facts, we allow the appeal of the assessee. 9. In the result, appeal of the assessee is allowed. Pronounced in the open court on the date mentioned on the caption page. Sd/- (GEORGE GEORGE K) Sd/- (LAXMI PRASAD SAHU) Judicial MemberAccountant Member Bangalore, Dated: 25.05.2023. /NS/* Copy to: 1.Appellants2.Respondent 3.CIT4.CIT(A) 5.DR, ITAT, Bangalore.6. Guard file By order Assistant Registrar, ITAT, Bangalore.