Nippon Power Ltd., Kolkata V. I.T.O.Ward-12(3), Kolkata

ITA 349/KOL/2019

AI Insights

Nippon Power Limited appealed against the order of the Commissioner of Income Tax (Appeals)-24, Kolkata, which confirmed the disallowance of a deduction under section 80IA amounting to Rs.1,73,72,926. The deduction was initially granted in the return processed under section 143(1) but was later disallowed during a subsequent processing related to a TDS credit application. The Tribunal found that the disallowance was made without a show-cause notice, which was necessary for such an adjustment, thereby infringing the assessee's rights to a fair hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129078 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 15-08-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 24-02-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS
• Section: 154; 143(1); 80IA

Judgement Text

ITA No. 349/KOL/2019 Assessment Year : 2016-2017 Nippon Power Limited 1 IN THE INCOME TAX APPELLATE TRIBUNAL, ‘A’ BENCH, KOLKATA Before Shri Rajpal Yadav, Vice-President & Shri Rajesh Kumar, Accountant Member I.T.A. No. 349/KOL/2019 Assessment Year: 2016-2017 Nippon Power Limited,.............................Appellant Unit No. 4A & 4B, 4 th Floor, 240B, A.J.C. Bose Road, Kolkata-700020 [PAN: AABCN1074D] -Vs.- Income Tax Officer,.................................Respondent Ward-12(3), Kolkata Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 Appearances by: Shri Manish Tiwari, A.R., appeared on behalf of the assesseee Shri B.K. Singh, JCIT, Sr. D.R, appeared on behalf of the Revenue Date of concluding the hearing : August 22, 2023 Date of pronouncing the order : August 24, 2023 O R D E R Per Shri Rajpal Yadav, Vice-President (KZ):- The assessee is in appe al before the Tribunal against the order of ld. Commissioner of Income Tax (Appeals)-24, Kolkata dated 14 t h January, 2019 passed for A.Y. 2016-17. ITA No. 349/KOL/2019 Assessment Year : 2016-2017 Nippon Power Limited 2 2. The assessee has taken five grounds of appeal, but its solitary grievance is that the ld. CIT(Appeals) has erred in denying deduction under section 80IA of the Income Tax Act amounting to Rs.1,73,72,926/-. 3. Brief facts of the case are that the assessee has filed its return of income on 17.10.2016. It claimed deduction under section 80IA of the Income Tax Act. This return was not selected for scrutiny assessment but processed under section 143(1) of the Income Tax Act on 13.01.2017. The return was accepted on the income declared by the assessee after claiming deduction under section 80IA. The assessee-company has filed an application on 19.07.2017 pleading therein that tax credit of Rs.11,262/- was not given to it. While dealing with this application of the assessee, ld. Assessing Officer has disallowed the deduction admissible under section 80IA on the ground that the assessee did not file audit report in Form 10CCB with the Income Tax return. Dissatisfied with this disallowance, the assessee carried the matter in appeal before the ld. CIT(Appeals) and submitted that the ld. Assessing Officer has not issued any notice while processing the return unde r section 154 on 13.01.2017. The ld. CIT(Appeals) did not acce pt the contention of the assesese and confirmed the order of the ld. Assessing Officer passed under section 154 of the Income Tax Act. ITA No. 349/KOL/2019 Assessment Year : 2016-2017 Nippon Power Limited 3 4. The ld. Counsel for the assessee has reiterated the submissions as was raised before the ld. 1 s t Appellate Authority. 5. On the other hand, ld. D.R. contended that since the assessee has filed an application for rectification of the apparent error, therefore, ld. Assessing Officer got an opportunity to consider the facts and made the disallowance of claim made under section 80IA on the ground that the report required to be submitted under section 80IA(4)(iv) was not submitted by the assessee. 6. We have duly considered the rival contentions and gone through the record carefully. The alleged order dated 13.01.2017 exhibiting the processment of return of assessee under section 143(1) was passed by the Computer on the basis of artificial intelligence. It could not detect any error in the accounts of the assessee and allowed the deduction. The assessee thereafter filed an application for grant of credit of TDS amounting to Rs.11,262/-. The whole details of the assessee were again processed by the computer and in this processment, the result came out by disallowance of a claim under section 80IA. We are of the view that in the second proce ssment, the only issue which required to be gone into by the computer was, whether TDS credit ITA No. 349/KOL/2019 Assessment Year : 2016-2017 Nippon Power Limited 4 deserves to be granted to the assessee or not. The assessee has pointed out an apparent mistake to that extent, but if it is felt by the ld. Assessing Officer that there are certain other errors, then, instead of carrying out a processment, a show-cause notice ought to have been given to the assessee before making any adjustment. It is not within the power of the ld. Assessing Officer to suo motu make the disallowance of deduction already granted to the assessee without issuance of a show-cause notice for his intention to do so. Therefore, the second order passed under section 154 on 19.07.2017 is to be confined to the extent tax credit given to the assessee and it cannot go beyond that. Accordingly we quash any further adjustment if made by the ld. Assessing Officer without issuing show-cause notice to the assessee. Accordingly the appeal of the assessee is allowed and the disallowance of deduction claimed under section 80IA being an incentive provision is deleted. 7. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on August 24, 2023. Sd/- Sd/- (Rajesh Kumar) (Rajpal Yadav) Accountant Member Vice-President(KZ) Kolkata, the 24 th day of August, 2023 ITA No. 349/KOL/2019 Assessment Year : 2016-2017 Nippon Power Limited 5 Copies to : (1) Nippon Power Limited, Unit No. 4A & 4B, 4 th Floor, 240B, A.J.C. Bose Road, Kolkata-700020 (2) Income Tax Officer, Ward-12(3), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 (3) Commissioner of Income Tax(Appeals)-24, Kolkata (4) Commissioner of Income Tax , (5) The Departmental Representative (6) Guard File TRUE COPY By order Assistant Registrar Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S.