NIPPON POWER LTD.,KOLKATA vs. I.T.O.WARD-12(3), KOLKATA

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ITA 349/KOL/2019Status: DisposedITAT Kolkata24 August 2023AY 2016-175 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the Assessing Officer could not suo motu disallow a deduction already granted without issuing a show-cause notice, especially when the assessee's application was for a specific TDS credit adjustment. The disallowance made without proper procedure was quashed.

What were the facts?

The assessee claimed deduction under section 80IA, which was initially allowed during processing under section 143(1). Subsequently, upon the assessee's application for TDS credit, the Assessing Officer disallowed the 80IA deduction without issuing a show-cause notice, citing the non-filing of the audit report in Form 10CCB.

What were the issues?

Whether the Assessing Officer can disallow a deduction already granted under section 80IA while processing an application for TDS credit under section 154 without issuing a show-cause notice.

Which sections of the Income-tax Act were involved?

Section 80IA,Section 143(1),Section 154

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, KOLKATA

Before: Shri Rajpal Yadav, Vice- & Shri Rajesh Kumar

Per Shri Rajpal Yadav, Vice-President (KZ):- The assessee is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax (Appeals)-24, Kolkata dated 14th January, 2019 passed for A.Y. 2016-17. 1

1.

Assessment Year : 2016-2017 Nippon Power Limited 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 under section 154 on 13.01.2017. The ld. CIT(Appeals) did not accept the contention of the assesese and confirmed the order of the ld. Assessing Officer passed under section 154 of the Income Tax Act.

Assessment Year : 2016-2017 Nippon Power Limited

4.

The ld. Counsel for the assessee has reiterated the submissions as was raised before the ld. 1st 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 processment, the only issue which required to be gone into by the computer was, whether TDS credit

Assessment Year : 2016-2017 Nippon Power Limited 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.

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