Amarnagar Seva Sahakari Mandali Ltd., At. Amarnagar, Tal. Jetpur, Dist. Rajkot V. The ITO Ward 1 (2) (3), Rajkot

ITA 31/RJT/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 9208 (ITAT-RAJKOT)
• Duration Of Justice: 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 03-01-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 09-02-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHISH KUMAR PANDEY
• Keywords: Rectification of order; Revised return
• Section: 10; 154; 2; 10AA; 139(5); 143(1); 80P

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT (Conducted through E-Court at Ahmedabad) BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I .T .A . N o .3 1 / R j t/2 0 2 3 ( A s se ss m e nt Y e a r : 20 18- 19 ) A m ar na g a r S ev a Sa ha k ar i M a nd al i Ltd ., At- A ma r n ag ar , T e l . J e t pu t, Di s t. R aj k o t, G uj a r a t- 36 0 3 70 V s.I nc o m e Ta x O f fic er , Wa r d- 1( 2) ( 3 ) , R a jk o t [P AN N o. A A A A A 5 00 4 H ] (Appellant) .. (Respondent) Appellant by : Shri R. D. Lalchandani, A.R. Respondent by: Shri Ashish Kumar Pandey, Sr. DR D a t e of H ea r i ng 04.01.2024 D a t e of P r o no u n ce me nt 10.01.2024 O R D E R PER SIDDHARTHA NAUTIYAL, JM: This appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeal), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi in DIN & Order No. ITBA/NFAC/S/250/2022-23/1048491623(1) vide order dated 06.01.2023 passed for Assessment Year 2018-19. 2. The assessee has taken the following grounds of appeals:- “1. The Commissioner of Income Tax (Appeals) erred in confirming the adjustment made under section 143(1)(a) of the Act. The Confirmation is not justified. 2. Without prejudice to ground no 1, The CPC erred in making in disallowing the claim under section 80P of the Act. The disallowance of the claim is not justified.” ITA No.31/Rjt/2023 Amarnagar Seva Sahakari Mandali Ltd. vs. ITO Asst.Year –2018-19 - 2 - 3. The brief facts of the case are that the assessee is a co-operative society and had filed it’s return of income for A.Y. 2018-19, on 20.06.2018 declaring total income of Rs. NIL after claiming deduction of Rs. 7,85,500/- under Section 80P of the Act. As per the assessee, deduction under Section 80P of the Act has been disallowed in the intimation dated 09.08.2019 issued under Section 143(1) of the Act. The assessee filed application for rectification on 09.10.2019 which was rejected on 05.12.2019. The assessee filed another rectification application on 09.01.2020 but the same was also rejected on 14.07.2020. 4. The assessee filed appeal before Ld. CIT(A). In appeal, Ld. CIT(A) dismissed the appeal of the assessee with the following observations:- “5.4 On perusal of the ROI for the AY 2018-19, furnished by the appellant, it is noted that the appellant has not claimed any deduction u/s 80P in Schedule "Deduction under Chapter section SOP. Accordingly, in the order appealed against deduction was not allowed and it is mentioned that "Deduction under Chapter -VIA will not be allowed unless respective schedules are filled properly". 5.4.2 Further, a copy of Audit Report filed by the appellant on 19.06.2018 is available on ITBA Portal. On examination of the same, it is noted that under the Sr. 33 "Section-wise details of deductions, if any, admissible under Chapter VIA or Chapter III (Section 10A, Section 10AA)" of Audit Report, the Auditor has mentioned "No". 5.4.3 As per section 80A(5) of the Act, where the assessee fails to make a claim in his return of income for any deduction under section 10A or section 10AA or section 10B or section 10BA or under any provision of this Chapter under the heading "C.— Deductions in respect of certain incomes", no deduction shall be allowed to him thereunder. It is clear that appellant has not made claim of deduction in ROI under the relevant Schedule "Deduction under Chapter section SOP". Further, in the Audit Report, the auditor has specified that no deduction is admissible under Chapter VI-A. Therefore, there is no defect in the intimation u/s 143(1) of the Act and accordingly grounds of appeal are dismissed. 6. In the result, the appeal is dismissed.” ITA No.31/Rjt/2023 Amarnagar Seva Sahakari Mandali Ltd. vs. ITO Asst.Year –2018-19 - 3 - 5. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A) dismissing the appeal of the assessee. The Counsel for the assessee drew our attention to Pages 1-2 of the Paper Book and submitted that on a perusal of acknowledgement of ITR for the impugned assessment year, it is evident that the assessee had claimed deduction of Rs. 7,85,500/- under Chapter VI-A of the Act. Further, the Counsel for the assessee also drew our attention to the computation of return of income and submitted that the assessee had also in the computation of income claimed deduction under Section 80P of the Act. Further, Counsel for the assessee also drew our attention to Page 27 of the Paper Book and submitted a Certificate given by the auditor of the assessee company, who has certified that in Column No. 33 of the Tax Audit Report, that the auditor has inadvertently mentioned that there is no deduction under Section 80P of the Act, whereas the correct amount of deduction claimed by the assessee is Rs. 7,85,500/- under Section 80P of the Act. The Counsel for the assessee also drew our attention to Pages 18 of the Paper Book, wherein similar claim of deduction under Section 80P of the Act was also allowed to the assessee for A.Y. 2013-14. Accordingly, the Counsel for the assessee submitted that in the instant facts, the Ld. CIT(A) erred in facts and in law holding that the assessee is not eligible to claim deduction under Section 80P of the Act. 6. In response, the Ld. D.R. submitted that as per the observations made by Ld. CIT(A), evidently the assessee has omitted to correctly fill up the respective Schedules in the Income Tax Return Form for claiming deduction under Section 80P of the Act. Further, the assessee has also ITA No.31/Rjt/2023 Amarnagar Seva Sahakari Mandali Ltd. vs. ITO Asst.Year –2018-19 - 4 - not submitted the original intimation under Section 143(1) of the Act so as to correctly assess as to what was the reason why the claim of deduction under Section 80P of the Act was not granted to the assessee. Accordingly, the Ld. D.R. placed reliance on the observations made by the Ld. CIT(A) in the appellate order. 7. We have heard the rival contentions and perused the material on record. We observe that the auditor of the assessee has given a categorical declaration that there was a mistake on it’s part in the Tax Audit Report, Column No. 33 wherein he had inadvertently mentioned that the assessee has not claimed deduction under Section 80P of the Act whereas the correct amount of deduction to be claimed by the assessee was Rs. 7,85,500/-. Further, the claim of deduction to the assessee under Section 80P of the Act had been allowed in earlier assessment years as well (A.Y. 2013-14). Even in the ITR acknowledgement filed by the Counsel for the assessee, it is evident that the assessee had made claim of deduction under Chapter VI-A of the Act. Accordingly, in our view it is a fit case where benefit of Section 80P of the Act should not be denied to the assessee on account of inadvertent error made by the assessee in filing the Income Tax Return Form where the assessee is otherwise eligible for claim of deduction under Section 80P of the Act. In the case of Shital Bachibhai Vaidya-Individual vs. ADIT 157 taxmann.com 419 (Ahmedabad – Tribunal), the ITAT held that where in an appeal, against order under Section 154 of the Act, assessee claimed that interest income earned by it from Government companies, which was exempt under Section 10 of the Act, was inadvertently stated as dividend income ITA No.31/Rjt/2023 Amarnagar Seva Sahakari Mandali Ltd. vs. ITO Asst.Year –2018-19 - 5 - exempt from tax, in respect of interest income in the return of income, CIT(Appeals) was directed to carry out necessary verifications and if the claim of the assessee was found to be correct relief was to be allowed to assessee in accordance with law. While passing the order ITAT made the following observations:- “8. We observe that in the case of DCIT vs. Justice Dilip Kumar Seth reported at [2006] 98 ITD 241 (Kol.):: [2006] 101 TTJ 90 (Kol), the ITAT held that the Assessing Officer is well competent to rectify any mistake in the intimation u/s.143(1) of the Act which was brought to his notice by the assessee. Further, the Hon’ble Delhi High Court in the case of Pawan Kumar Aggarwal vs. CIT in ITA No.199/2014 has held that from bare reading of section 154 of the Act, it is apparent that the power of rectification extends to amendment of an intimation or deemed intimation u/s.143(1) of the Act. The Hon’ble High Court further held that this power of rectification enures even after the matter has been considered and decided in any proceedings by way of appeal or revision. It was held that necessarily this power extends even at the stage of the appeal and further appeal to the ITAT. In the case of Zen Tobacco (P.) Ltd. v ACIT 65 taxmann.com 320 (Ahmedabad - Trib.), the assessee had filed its return of income declaring certain income and the same was processed under section 143(1). Subsequently, on verification of assessee's record, it was noticed that the provision of deferred tax assets of certain amount, which ought to have been deducted from total income, was not deducted but added back to amount of profit and, thus, taxable income was overstated. Therefore, the assessee filed an application under section 154 seeking for rectification of mistake along with the revised statement of income and claimed a refund. The Assessing Officer rejected the application observing that the assessee should have filed a revised return rather than taking recourse to section 154, which was not permissible under the Act. On appeal, the Commissioner (Appeals) dismissed the appeal. On second appeal, the Ahmedabad ITAT held that from the provisions of sections 139(1), 139(5) and 143(1) it is evident that it is not the case that revenue authorities have to accept whatever has been stated in the return and compute the taxable income mechanically. As per provisions of section 143(1), the concerned revenue authority has to examine whether any claim as made by the assessee is correct or not. This includes understatement and overstatement of the income. If the revenue authority failed to take note of any incorrect claim with regard to total income of the assessee, such failure would necessarily mean mistake apparent from the record. In the case of Shri Chetanbhai Ramjibhai Avaiya vs. ITO (ITA No. 364/Srt/2017 A.Y. 2014-15 dated 15.07.2022) the ITAT has held as under:- “8. We have considered the rival submission of both the parties. We find that there is no dispute on the facts of the present case that at the time of filing of return of income, assessee offered LTCG on sale of agriculture land and made payment tax of Rs.34,87,890/- . As per Ld. AR of the assessee, the ITA No.31/Rjt/2023 Amarnagar Seva Sahakari Mandali Ltd. vs. ITO Asst.Year –2018-19 - 6 - assessee realized his mistake and filed an application for rectification under section 154 of the Act by taking plea that the agriculture land is not falls under the definition of capital asset. The said application of assessee was dismissed by Assessing Officer by holding that in the order under section 143(1) no prima facie adjustment can be made nor any levy of additional income can be made by the Assessing Officer. The Assessing Officer cannot visit beyond that return except to compute tax or interest after adjustment of prepaid taxes. The Assessing Officer have no power to disturb the income disclosed in the return of income. And the assessee has failed to furnish any revised return, after taking into consideration all the facts of the case. The Ld. CIT(A) confirmed the action of Assessing Officer with the observation that the “mistake is by the appellant in computation of income”. 9. Now before us, the Ld. AR for the assessee vehemently relying upon the CBDT Circular No.14(XL-35) dated 11.04.1955 and submitted that though the assessee committed mistake which was realized later on, however, it was the duty of officer of the Department not to take the advantage of ignorance of as about his right. The Ld. AR for the assessee submits that the CBDT’s Circular dated 11.04.1955 has not been withdrawn till now and various courts including Hon'ble jurisdictional High Court by referring the said CBDT’s Circular dated 11.04.1955 held that it is the policy of Department that office should not take advantage of ignorance of the ae about his right. Besides reliance on various case laws, Ld. AR for the assessee vehemently relied on the decision of Hon'ble jurisdictional High Court in the case of Ahmedabad Keiser-E-Hind Mills Co. Ltd. (supra), wherein the Hon'ble jurisdictional High Court while referring the said CBDT”s Circular dated 11.04.1955 held that is incumbent on the Income Tax Officer to advice the assessee to claim relief if any preceding either at this stage of original am that the assessee was entitled to such relief.” 9. In our considered view, looking into the instant facts placed before us and in the interest of justice, the matter is being restored to the file of the Ld. CIT(A) to carry out necessary verifications and if the claim of the assessee is found to be correct, may be allowed relief to the assessee in accordance with law. 10. In the result, the appeal of the assessee is allowed for statistical purpose.” 8. Accordingly, in light of the observations made by the Jurisdictional ITAT decision and facts of the instant case, the matter is being restored to the file of Ld. CIT(A) to carry out necessary verifications and if the assessee is otherwise found to be eligible after claim for deduction under Section 80P of the Act, relief may be allowed to the assessee in accordance with law and the assessee should not be denied benefit of deduction under Section 80P of the Act simply on ITA No.31/Rjt/2023 Amarnagar Seva Sahakari Mandali Ltd. vs. ITO Asst.Year –2018-19 - 7 - account of an inadvertent error by the assessee in filling up certain columns in ITR Form while filing the return of income, and inadvertently omitting to claim deduction under Section 80P of the Act. 9. In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 10/01/2024 Sd/- Sd/- (WASEEM AHMED) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 10/01/2024 TANMAY, Sr. PS TRUE COPY आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. वभागीय त न ध, आयकर अपील!य अ धकरण, राजोकट / DR, ITAT, Rajkot 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार Dy./Asstt.Registrar) आयकर अपील य अ धकरण, राजोकट / ITAT, Rajkot 1. Date of dictation 05.01.2024 2. Date on which the typed draft is placed before the Dictating Member 05.01.2024 3. Other Member..................... 4. Date on which the approved draft comes to the Sr.P.S./P.S 10.01.2024 5. Date on which the fair order is placed before the Dictating Member for pronouncement .01.2024 6. Date on which the fair order comes back to the Sr.P.S./P.S 10.01.2024 7. Date on which the file goes to the Bench Clerk 10.01.2024 8. Date on which the file goes to the Head Clerk.......................................... 9. The date on which the file goes to the Assistant Registrar for signature on the order.......................... 10. Date of Despatch of the Order..........................................