KUMARAGIRI SPINNERS PVT. LTD.,NAMAKKAL vs. DCIT, CIRCLE,, ERODE

Briefly, the facts of the case are that the appellant is a Company incorporated under the provisions of Companies Act. It is engaged in the business of manufacturing and trading of textile goods. The Return of Income for the assessment year 2021-22 was filed by the appellant on 26.02.2022 disclosing total income of Rs.7,31,77,440/-. After claiming of deduction of Rs.85,69,291/- under the provisions of section 80IA of the Income Tax Act, 1961 in respect of profits from generation of wind energy.

The said Return of Income was processed u/s.143(1) of the Act vide intimation dated 24.06.2022 accepting the returned income without making any adjustment. Subsequently, the CPC had rectified said intimation vide order dated 02.11.2023 by restricting the amount of deduction claimed u/s.80IA to the extent of Rs.52,99,221/- as against the total claim of Rs.85,69,290/- for the reason that the claim made in the Return of Income is more than the amount mentioned in the Form 10CCB.

Being aggrieved by the said order passed u/s.154 of the Act, the appellant preferred an appeal before ld.CIT(A), who vide impugned order confirmed the action of the CPC by holding that in the absence of cogent and verifiable and conclusive evidences to establish that the appellant was entitled for deduction of Rs.85,69,290/- fully supported by furnishing Form 10CCB.

Being aggrieved by the order of ld.CIT(A), the appellant is in appeal before us in the present appeal. The Learned Counsel submits that the appellant was not put notice by CPC proposing to make a prima facie by restricting the deduction u/s.80IA to the extent of Rs.52,99,221/- and thereafter, it was dropped by the CPC and the intimation was issued without making any such prima facie disallowances. However, without issuing a show cause notice he made the disallowance. He further submits that all Form 10CCB’s were filed before processing the Return of Income u/s.143(1) of the Act on 24.06.2022 and therefore, keeping in view of the decision of Hon’ble Madras High Court in (Mad) and CIT Vs. G.M.Knitting Industries (P.) Ltd [2016] 71 taxmann.com 35 (SC).

On the other hand, the Learned Sr.DR opposed the above submissions and submits that non-submission of Form 10CCB in support of claim for deduction u/s.80IA amounts to incorrect claim. The CPC had rightly restricted the above claim u/s.80IA of the Act.

We heard rival submissions and perused the material available on record. The issue that arises for our consideration is whether CPC was justified in rectifying the intimation issued u/s.143(1) of the Act on 24.06.2022. Admittedly, the CPC had proposed to restrict the deduction u/s.80IA of the Act of Rs.52,99,221/- vide show cause notice dated 17.05.2022. However, after considering the objections filed by the appellant company, the Return of Income was processed u/s.143(1) vide intimation dated 24.06.2022 without making any adjustment to the returned income. Subsequently, the said intimation was rectified vide order dated 02.11.2023 by restricting the claim for deduction u/s.80IA of Rs.52,99,221/- as against total claim of Rs.85,69,291/-. We are unable to discern from the material on record that the CPC had given opportunity to explain the case before passing the rectification order. The intimation already issued u/s.143(1) cannot be amended or rectified without issuing a show cause notice u/s.154 of the Act, therefore, we are of the considered opinion that the interests of justice would be met, if the matter restored to the stage of issue notice u/s.154 of the Act by CPC/AO. All the other contentions raised by the appellant are left open before the AO/CPC, we order accordingly.

In the result, appeal filed by the assessee stands partly allowed for statistical purpose. Order pronounced in the open Court on 21st August, 2026. (MANU KUMAR GIRI) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER Chennai; िदनांक / Dated : 21st Aug, 2026 SGR, Sr.PS

GANGADHARA RAO SALEELA Date: 2026.08.28 15:35:12 +05'30'