SCHWARZ SPERREN INTELLIGENCE AND SECURITY SOLUTIONS LLP,ANDHERI WEST MUMBAI vs. INCOME TAX OFFICER, KAUTILYA BHAVAN

ITA 7072/MUM/2026Status: DisposedITAT Mumbai29 September 2026AY 2020-20216 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the issue required fresh examination at the Assessing Officer's level. It noted that both the assessment order and the Remand Report indicated that complete details necessary for verifying the claim under section 80JJAA had not been furnished by the assessee. The Tribunal observed the absence of complete employee-wise details, month-wise salary particulars, and reconciliation of additional employee cost with bank statements. Consequently, the Tribunal was of the view that the matter should be restored to the file of the Assessing Officer for de novo consideration. The Assessing Officer was directed to afford a reasonable opportunity to the assessee and call for necessary details and supporting evidence for proper verification of the claim. The assessee was directed to cooperate and furnish complete details. The order of the CIT(A) was set aside, and the matter was restored to the AO for fresh adjudication. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Schwarz Sperren Intelligence Security Solutions LLP, filed its return of income for assessment year 2020-21 on 27.01.2021, declaring a total income of Rs.33,02,720/-. The case was selected for limited scrutiny to verify a deduction of Rs.38,31,822/- claimed under section 80JJAA for additional employee cost. The Assessing Officer (AO) disallowed the entire deduction, stating that the assessee failed to provide complete details, including discrepancies between salary ledgers and bank statements, absence of month-wise salary details, and lack of employee-wise reconciliation of additional salary cost. The assessee appealed to the Commissioner of Income-tax (Appeals) (CIT(A)), providing more documents. The CIT(A) called for a Remand Report from the AO, who again noted incomplete details. The CIT(A) upheld the disallowance.

What were the issues?

1. Whether the assessee has substantiated its claim for deduction under section 80JJAA of the Income-tax Act, 1961, by furnishing complete and satisfactory documentary evidence to the satisfaction of the Assessing Officer and the Commissioner of Income-tax (Appeals)? Assessee's contentions: The assessee contended that it had increased its employee base during the financial year and satisfied all conditions for the deduction under section 80JJAA, including employment period, salary limits, provident fund registration, and salary payment through banking channels. It submitted that the deduction was fully substantiated by the documents furnished, including EPF returns, employee-wise working sheets, and bank statements. Revenue's contentions: The revenue, through the Assessing Officer and the Remand Report, contended that the assessee failed to furnish complete details necessary for verification. Specific deficiencies noted included incomplete employee details prior to the year under consideration, lack of supporting evidence for employee identity and actual employment, absence of attendance records, and inadequate reconciliation of employee-wise salary cost with bank payments. The revenue argued that the conditions for section 80JJAA could not be verified due to these missing details.

Which sections of the Income-tax Act were involved?

Section 80JJAA,Section 250,Section 143(3),Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, MUMBAI

Before: SHRI SANJAY GARG & SHRI G. M. DOSS

Pronounced: 29.09.2026

PER G.M. DOSS, ACCOUNTANT MEMBER :

This appeal has been preferred by the assessee against the order dated 31.03.2026 passed by the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi, under section 250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”), for the assessment year 2020-21, arising out of the assessment order dated 26.09.2022 passed by the Assessing Officer under section 143(3) read with section 144B of the Act. The assessee has, inter alia, challenged

the disall

The order continues below.

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