What did the Tribunal hold?

The Tribunal held that treating the return as valid by the Revenue and then disallowing the deduction is contradictory. Therefore, the Assessing Officer was directed to allow the deduction claimed by the assessee.

The assessee claimed a deduction under Chapter VI-A, which was disallowed because the return was not duly verified within the prescribed time. The assessee contended that the physical return was later filed and acknowledged, but failed to provide documentary evidence. The CIT(A) dismissed the appeal due to delay and lack of condonation petition.

What were the issues?

Whether a deduction can be disallowed if the return is considered valid by the revenue but not duly verified within the prescribed time. Whether the CIT(A) was correct in dismissing the appeal due to delay without considering the merits.

Dakshaben Jayendra Modi… vs Ward 1, Gandhinagar, Gandhinar | ITAT Ahmedabad 2026

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

For Appellant: Shri Shailesh J. Shah, C. A

For Respondent: Shri Veerabadram Vislavath, Sr.DR

Hearing: 02.07.2026Pronounced: 17.07.2026

PER DR. B.R.R. KUMAR, VICE-PRESIDENT:

- This appeal has been filed by the Assessee against the order dated 06.0001.2026 passed by the Ld. Commissioner of Income Tax (Appeals), ADDL/JCIT (A)-2, Gurugram (hereinafter referred to as ‘Ld. CIT (A)’ in short), under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’ in short) for Assessment Year 2010-11. 2. The Assessee has raised the following grounds of Appeal:-

That on the fact and in the circumstances of the case and in law, the order passed by the Learned Commissioner of Income Tax (Appeals) u/s. 250 of the Act, by not allowing the deduction under the provision of chapter VI-A of the IT Act is wrong and bad in law, considering the fact that, as per the power conferred by sub-section (1)A of section 143 of the IT Act, 1961 the CBDT has specify the scheme for processing of Returns of Income by the Central Processing of Returns Scheme 2011 was came in to effect as per the Notification No. 2/2012 dated 04/01/2012. ITA No. 685/AHD/2026, AY-2010-11 Dakshaben Jayendra Modi - 2–

Without prejudice to the above, had the Department not adjusted my legitimate refund of Rs. 19,309/- for the Assessment Year 2010-11 from the Assessment Year 2017 and 2021-22 there was a demand of Rs. 19,309/- outstanding as on 31/01/2024 and as per the order F.No. 375/02/2023-IT-Budget (CBDT) dated 13/02/2024 considering the monitory limit of Rs.25,000/- it extinguish the claims to revenue, being tax demand under the Income Tax Act, 1961. 3. The grounds of appeal are taken without prejudice to one another and appellant craves, leave, to add OR DLEETE OR modify OR revise any ground at the time of hearing before the appellate authority.

The facts of the case are that return of income or AY 2010-11 was processed under section 143(1) of the Act. While processing the return, the deduction of Rs.1,00,000/- under Chapter VI A was not allowed as the return was not duly verified within the prescribed time. Subsequently, the assessee filed an application for rectification under section 154, which was also disposed of by CPC. The assessee contended that the deduction was rightly claimable and that the same could not be considered due to non-receipt of ITR-V by CPC. It was further stated that physical return/submission was later filed and acknowledged by the department. However, during the appellate proceedings, the assessee failed to furnish any documentary evidence to substantiate the claim of filing, verification of return, or eligibility of deduction under Chapter VI-A.

Aggrieved assessee filed an appeal before the Ld.CIT(A), who dismissed the appeal of the assessee as non maintainable. The relevant extract of the order is reproduced as follows:

“…5.4 I have carefully considered the assessment records, grounds of appeal, and submissions made by the appellant It is observed that the return of income was processed strictly as per the provisions of section 143(1) of the Act. The deduction claimed under Chapter VI-A was not allowed due to non-verification of the return within the prescribed time. The provisions of the Act clearly mandate that a return of income must be duly verified for it to be treated as a valid return.

ITA No. 685/AHD/2026, AY-2010-11 Dakshaben Jayendra Modi - 3–

5 The present appeal has been filed by the appellant against the order passed by the Assessing Officer. On perusal of the records, it is noticed that the impugned rectification-order was passed dated 29/01/2019 which was much prior to the filing of the present appeal. As per the provisions of the Income-tax Act, an appeal is required to be filed within the prescribed limitation period. However, in the instant case, the appellant has filed the appeal after an inordinate and unexplained delay. Further, it is observed that the appellant has not filed any petition seeking condonation of delay, nor has any reasonable cause been explained for such abnormal delay in filing the appeal…”

On going through the record, we hold that having treated the return as valid by the Revenue, not allowing deduction is oxymoronic. Hence, we direct the Assessing Officer to allow the deduction claimed by the assessee in the return of income.

In the result, the appeal filed by the assessee is allowed.

The order pronounced in the open Court on 17.07.2026 (RAHUL CHAUDHARY) VICE-PRESIDENT () Ahmedabad; Dated 17.07.2026

आदेश की "ितिलिप अ"ेिषत / Copy of the Order forwarded to : 1. अपीलाथ"/ The Appellant

""थ"/ The Respondent. 3. संबंिधतआयकरआयु"/ Concerned CIT 4. आयकरआयु"(अपील) /The CIT(A)- 5. िवभागीय"ितिनिध, आयकरअपीलीयअिधकरण, अहमदाबाद/ DR, ITAT, Ahmedabad 6. गाड"फाईल /Guard file. आदेशानुसार/ BY ORDER,सहायकपंजीकार (Dy./Asstt.

DAKSHABEN JAYENDRA MODI,GHANDHINAGAR vs. WARD 1 , GANDHINAGAR, GANDHINAR

What did the Tribunal hold?

What were the facts?

What were the issues?

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