Smt.Neelam Pachisia , Bangalore V. Deputy Commissioner of Income Tax (CPC) Circle-6(3)(1), Bangalore

ITA 340/BANG/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2743 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 11-03-2020
• Assessment Year: 2016-2017
• Appeal Filed On: 25-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R. PREMI
• Assessee Lawyers: V. SRINIVASAN
• Keywords: Set aside
• Section: 143(1); 80IC; 139(1); 80IC

Judgement Text

ITA NO.340/BANG/2019 SMT. NEELAM PACHISIA, BENGALURU IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: BANGALORE BEFORE SHRI B. R. BASKARAN, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO.340/BANG/2019 ASSESSMENT YEAR: 2016-17 SMT. NEELAM PACHISIA 126A, SRI RANGA COMPLEX ABOVE CANARA BANL ASWATH NAGAR BENGALURU-560 094 PAN NO : AEYPP4378N VS. DEPUTY COMMISSIONER OF INCOME-TAX, (CPC) CIRCLE-6(3)(1) BENGALURU APPELLANT RESPONDENT APPELLANT BY : SHRI V. SRINIVASAN, A.R. RESPONDENT BY : SHRI R. PREMI, D.R. DATE OF HEARING : 13.03.2020 DATE OF PRONOUNCEMENT : 17.03.2020 O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 20-12-2018 PASSED BY LD CIT(A)-6, BENGALURU AND IT RELATES TO THE ASSESSMENT YEAR 2016-17. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN UPHOLDING THE DISALLOWANCE OF DEDUC TION CLAIMED U/S 80IC OF THE ACT WHILE PROCESSING THE RETURN OF INCO ME U/S 143(1) OF THE ACT. 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE FACTS RELATING TO THE ISSUE ARE DISCUSSED IN BRIEF. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PRODUCTION OF TOILET ROLL, HAND KERCHIE F, CLEANING TABLE ITA NO.340/BANG/2019 SMT. NEELAM PACHISIA, BENGALURU PAGE 2 OF 5 CLOTH, SERVIETTES, PAPER NAPKINS, WET TISSUES, FACI AL TISSUES, ETC. IT FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSI DERATION ON 30-03- 2017, I.E., BEYOND THE DUE DATE SPECIFIED U/S 139(1 ) OF THE ACT. THE ASSESSEE HAD ALSO CLAIMED DEDUCTION U/S 80IC OF THE ACT TO THE TUNE OF RS.38,21,576/-. THE RETURN OF INCOME WAS PROCES SED U/S 143(1) OF THE ACT ON 25.06.2017 BY DISALLOWING THE CLAIM O F RS.38,21,576/- MADE U/S 80IC OF THE ACT. THE ASSESSEE CHALLENGED T HE SAME BY FILING APPEAL BEFORE LD CIT(A). 3. BEFORE LD CIT(A), THE ASSESSEE SUBMITTED THA T THE AUDIT REPORT FOR CLAIMING DEDUCTION U/S 80IC WAS FILED IN TIME, BUT THE RETURN OF INCOME COULD BE FILED BELATEDLY, AS THE ASSESSEE DI D NOT HAVE ADEQUATE FUNDS TO PAY SELF ASSESSMENT TAX. THE ASS ESSEE, BY PLACING RELIANCE ON CERTAIN CASE LAWS, CONTENDED THAT THE D EDUCTION U/S 80IC SHOULD BE ALLOWED. HOWEVER, THE LD CIT(A) NOTICED THAT THE PROVISIONS OF SEC.143(1)(V) SPECIFICALLY STATES THA T THE DEDUCTION U/S 80IC SHALL BE DISALLOWED, IF THE RETURN OF INCOME I S FURNISHED BEYOND THE DUE DATE PRESCRIBED U/S 139(1) OF THE ACT. ACC ORDINGLY THE LD CIT(A) CONFIRMED THE DISALLOWANCE. AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL. 4. THE LD A.R SUBMITTED THAT THE YEAR UNDER CONS IDERATION IS AY 2016-17 AND THE CLAUSES (III) TO (VI) WAS INSERTED INTO SEC.143(1) OF THE ACT BY FINANCE ACT, 2016 W.E.F. 1.4.2017. THERE IS NO DOUBT THAT CLAUSE (V) OF THE AMENDED SEC. 143(1) PROVIDES FOR DISALLOWANCE OF DEDUCTION CLAIMED U/S 80IC SHALL BE DISALLOWED, IF THE RETURN OF INCOME IS FURNISHED BEYOND THE DUE DATE PRESCRIBED U/S 139(1) OF THE ACT. HOWEVER, THE SAID CLAUSE WAS INSERTED WITH EF FECT FROM 1.4.2017 AND HENCE, THE AMENDED PROVISIONS SHALL APPLY ONLY FROM AY 2017- 18. SINCE THE YEAR UNDER CONSIDERATION IS AY 2016- 17, THE ABOVE SAID PROVISIONS SHALL NOT APPLY TO THE YEAR UNDER CONSID ERATION. ITA NO.340/BANG/2019 SMT. NEELAM PACHISIA, BENGALURU PAGE 3 OF 5 5. THE LD D.R, ON THE CONTRARY, SUBMITTED THAT THE RETURN OF INCOME WAS PROCESSED ON 25.06.2017, I.E., AFTER 1.4 .2017 AND HENCE THE CLAIM OF THE ASSESSEE WAS RIGHTLY DISALLOWED U/ S 143(1)(V) OF THE ACT. SHE FURTHER SUBMITTED THAT THE PROVISIONS OF SEC. 80AC MANDATES THAT THE DEDUCTION CAN BE CLAIMED ONLY IF THE RETURN OF INCOME IS FILED WITHIN THE DUE DATE. 6. HOWEVER, ON THE PERUSAL OF THE PROVISIONS OF SEC.143(1), IT WAS NOTICED THAT THE FOLLOWING PROVISO WAS ALSO INSERTE D BY FINANCE ACT, 2016:- PROVIDED THAT NO SUCH ADJUSTMENT SHALL BE MADE UNL ESS AN INTIMATION IS GIVEN TO THE ASSESSEE OF SUCH ADJUSTM ENTS EITHER IN WRITING OR IN ELECTRONIC MODE. WHEN THE BENCH ASKED AS TO WHETHER ANY INTIMATION W AS GIVEN TO THE ASSESSEE AS CONTEMPLATED UNDER THE ABOVE SAID PROVI SO, THE LD A.R SUBMITTED THAT THE ASSESSEE HAS NOT RECEIVED ANY IN TIMATION AS PROVIDED UNDER THE PROVISO TO SEC.143(1). HENCE TH E LD D.R WAS ASKED TO FIND OUT AS TO WHETHER ANY INTIMATION WAS GIVEN TO THE ASSESSEE. THE LD D.R FURNISHED A LETTER F.NO.CPC/U - IV/JUDICIAL/2019-20 DATED 03-03-2020, WHEREIN IT WA S STATED THAT NO INTIMATION WAS GIVEN TO THE ASSESSEE. IT WAS AL SO STATED THAT THE YEAR UNDER CONSIDERATION BEING AY 2016-17, NO SUCH INTIMATION NEEDS TO BE GIVEN. 7. WE HAVE NOTICED THAT THE RETURN OF INCOME O F THE ASSESSEE PERTAINING TO AY 2016-17 WAS PROCESSED U/S 143(1) O N 25.06.2017, I.E., AFTER THE DATE OF INSERTION OF CLAUSE (V) TO SEC. 143(1), I.E, AFTER 1.4.2017. THE CONTENTION OF THE REVENUE IS THAT, I F PROCESSING OF RETURN OF INCOME OF ANY ASSESSMENT YEAR IS DONE AFT ER 1.4.2017, THEN THE PROVISIONS OF CLAUSES (III) TO (VI) INSERTED W. E.F. 1.4.2017 CAN BE APPLIED. IN THAT CASE, IN OUR VIEW, THE PROVISO MA NDATING GIVING OF INTIMATION TO THE ASSESSEE TO THE PROPOSED ADJUSTME NT SHOULD HAVE ITA NO.340/BANG/2019 SMT. NEELAM PACHISIA, BENGALURU PAGE 4 OF 5 ALSO BEEN FOLLOWED BY THE REVENUE. IT IS SO BECAUS E, THE SAID PROVISO WAS ALSO INSERTED IN SEC.143(1) ALONG WITH CLAUSES (III) TO (VI) BY FINANCE ACT, 2016. SINCE NO SUCH INTIMATION WAS GI VEN TO THE ASSESSEE, THE IMPUGNED ADJUSTMENT IS LIABLE TO BE D ELETED. THE LD D.R INVITED OUR ATTENTION TO THE PROVISIONS OF SEC. 80AC OF THE ACT. HOWEVER, THE CONTROVERSY HERE IS RELATED THE POWER OF THE AO IN PROCESSING RETURN OF INCOME U/S 143(1) OF THE ACT. HENCE WE ARE OF THE VIEW THAT WE NEED NOT EXAMINE THE PROVISIONS OF SEC.80AC OF THE ACT AT THIS STAGE. 8 ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND DIRECT THE AO TO DELETE THE DISALLOWANCE OF DEDUCTION CLAIMED U/S 80IC OF THE ACT. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17.3.2020 SD/- (PAVAN KUMAR GADALE ) JUDICIAL MEMBER SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED 17 TH MARCH, 2020. VG/SPS ITA NO.340/BANG/2019 SMT. NEELAM PACHISIA, BENGALURU PAGE 5 OF 5 COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.