SHIV SHAKTI STEEL PRIVATE LIMITED,KOLKATA V. ACIT CIRCLE 1(1), KOLKATA

ITA 168/KOL/2025

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Shiv Shakti Steel Private Limited appealed against the order of the CIT(A) which affirmed the decision of the AO/CPC denying the benefit of Section 115BAA and invoking Section 115JB of the Income-tax Act, 1961 for the Assessment Year 2021-22. The Tribunal noted that the AO/CPC did not issue a show cause notice before rejecting the benefit claimed under Section 115BAA, which was a procedural requirement. The Tribunal also observed that the issue was debatable and thus not suitable for summary adjustment under Section 143(1). Consequently, the Tribunal quashed the intimation under Section 143(1) and allowed the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314567 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2021-2022
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAILEN SAMADDER
• Assessee Lawyers: AKSHAY RINGASIA
• Section: 115JB

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No. 168/KOL/2025 (Assessment Year: 2021-22) SHIV SHAKTI STEEL PRIVATE LIMITED Room No 5, 4, b.b.d. Bag east, Kolkata, West Bengal, 700001 VS. ACIT Circle 1(1) Aayakar Bhawan, Kolkata, Kolkata, West Bengal, 700069 (Appellant) (Respondent) PAN No. AAGCS9768L Assessee by : Shri Akshay Ringasia, AR Revenue by : Shri Sailen Samadder, DR Date of hearing: 27.03.2025 Date of pronouncement : 06.05.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the cita.-1, ADDL/JCIT (A)-1 Ludhiana (hereinafter referred to as the “Ld. CIT(A)”] dated 22/11/2024 for the AY 2021-22. 02. The only issue raised in ground no.1 is against the order of ld. CIT (A) affirming the order of AO/CPC in not granting benefit of Section 115BAA of the Income-tax Act, 1961 (the Act) and invoking the provisions of Section 115JB of the Act by ignoring the fact that the form 10-IC was duly filed in the preceding assessment year. Whereas in ground no.2, the issue raised was against the invalid order passed by AO/CPC which was upheld/ affirmed by the ld. CIT (A) thereby confirming the adjustment u/s 143(1) of the Act by ignoring the fact that the said Page | 2 ITA No. 168/KOL/2025 SHIV SHAKTI STEEL PRIVATE LIMITED; A.Y. 2021-22 adjustment was beyond the scope of provisions of Section 143(1) of the Act. Since the issue raised in ground no.2 is jurisdictional issue, we are inclined to decide the same first of all. 03. The facts in brief are that the assessee filed the return of income on 15.03.2022, which was processed u/s 143(1) of the Act on 31.12.2023, wherein the AO/CPC denied the benefit of Sections 115BAA and invoked the provisions of Section 115JB of the Act. Pertinent to state that the assessee has opted in the preceding assessment year for lower tax rate by filing form 10-IC. The assessee filed the appeal before the ld. CIT (A) which was also dismissed by upholding the order of AO/ CPC. 04. After hearing the rival contentions and perusing the materials available on record, we find that assessee was not given any show cause notice by the AO/CPC before making rejecting the benefit benefit claimed by the assessee under section 115BAA of the Income-tax Act, 1961 (the Act) and invoking the provisions of Section 115JB of the Act. We note that in this case, the assessee has filed form no.10-IC in the preceding assessment year and has already opted for the lower tax regime. In our opinion, the action of the ld. AO/CPC is beyond the provisions of Section 143(1) of the Act as the issue involved in the present case is debatable issue and therefore, could not have been subject matter of the order passed u/s 143(1) of the Act. Besides it is mandatory to issue show cause notice to the assessee before making any adjustment in rejecting the benefit claimed by the assessee which was never issued. Accordingly, we hold that the order passed u/s 143(1) of the Act is invalid and cannot be sustained. Consequently, we quash the intimation passed u/s 143(1) of the Act. Page | 3 ITA No. 168/KOL/2025 SHIV SHAKTI STEEL PRIVATE LIMITED; A.Y. 2021-22 05. Even on merit, the form no.10-IC which was stated to be filed beyond the due date of filing the return of income u/s 139(1) of the Act, we find that the same is not mandatory and at best can be regarded as a directory and procedural issue and therefore, even on merit the assessee case is very strong case, however, we are not inclined to decide the same at this stage. 06. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 06.05.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 06.05.2025 Sudip Sarkar, Sr.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata "