INTUIT INDIA PRODUCT DEVELOPMENT CENTRE PRIVATE LIMITED,BENGALURU vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3(1)(1), BANGALORE

PDF · subscribers
ITTPA 957/BANG/2022Status: DisposedITAT Bangalore28 April 2023AY 2018-193 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal noted that the AO had restricted the deduction under Chapter VIA to Rs. 2 lakh without intimating the assessee the reasons for doing so. In the interest of justice and equity, the Tribunal decided to restore the matter to the files of the AO to examine the claim of the assessee raised in ground No. 3.1 and its sub-grounds. The Tribunal reasoned that the assessee was not provided an opportunity to explain its claim before the restriction was imposed by the AO. Therefore, the AO is directed to re-examine the assessee's claim for deduction under Chapter VIA of Rs. 43,22,544. The Tribunal did not decide the merits of the claim itself but rather remanded it for proper examination by the AO. No other grounds were decided on merits.

What were the facts?

The assessee, M/s. Intuit India Product Development Centre Pvt. Ltd., filed an appeal before the Income Tax Appellate Tribunal (ITAT) against the final assessment order dated July 14, 2022, passed under Section 143(3) read with Section 144C(13) of the Income Tax Act, 1961, for the assessment year 2018-2019. The assessee raised five grounds of appeal. The Assessing Officer (AO) had restricted the deduction under Chapter VIA of the Act to Rs. 2,00,000 instead of Rs. 43,22,544 claimed by the assessee in its return of income. The assessee contended that this restriction was made without prior notice. The appeal was heard on April 27, 2023, and the order was pronounced on April 28, 2023.

What were the issues?

The Tribunal had to decide the following issues: 1. Whether the AO erred in restricting the deduction under Chapter VIA of the Act to Rs. 2,00,000 instead of Rs. 43,22,544, and whether the assessee was entitled to the full deduction without prior notice. Assessee's contentions: 1. The AO erred in restricting the deduction under Chapter VIA to Rs. 2,00,000 instead of Rs. 43,22,544. 2. The AO ought to have observed that the deduction claimed under Chapter VIA was not disputed in the final assessment order. 3. The AO ought to have allowed the deduction under Chapter VIA of Rs. 43,22,544 without computing the taxable assessed income and applicable tax. 4. The assessee was not put on notice for restricting the claim of deduction under Chapter VIA and prayed for the matter to be restored to the AO for an opportunity to explain its entitlement to the full deduction. Revenue's contentions: 1. The learned Departmental Representative was heard, but no specific contentions are recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(13),Section 234B,Section 234D

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES “B”, BANGALORE

Hearing: 27.04.2023Pronounced: 28.04.2023

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES “B”, BANGALORE Before Shri George George K, JM & Shri Laxmi Prasad Sahu, AM IT(TP)A No.957/Bang/2022 : Asst.Year 2018-2019 M/s.Intuit India Product The Deputy Commissioner of Development Centre Pvt.Ltd. Income-tax, Circle 3(1)(1) v. 7th Floor, Campus 4A, Bangalore. Pritech Park (Ecospace) Bellandur Bangalore – 560 103. PAN : AACCI4391P. (Appellant) (Respondent) Appellant by : Smt.Manasa Ananthan, Advocate Respondent by : Sri.Sunil Kumar Singh, CIT-DR Date of Pronouncement : 28.04.2023 Date of Hearing : 27.04.2023 O R D E R Per George George K, JM : This appeal at the instance of the assessee is directed against final assessment order dated 14.07.2022 passed u/s 143(3) r.w.s. 144C(13) of the I.T.Act. The relevant assessment year is 2018-2019.

2.

The assessee has raised five grounds and relevant sub- grounds. The learned AR submitted that ground No.1 is general in nature and no specific adjudication is required, hence, the same is dismissed. Ground No.2 and its various sub-grounds are with reference to transfer pricing adjustment. The learned AR submitted that the transfer pricing adjustment has been settled under MAP proceedings and has filed a letter to the effect, hence, ground No.2 and its

2 IT(TP)A No.957/Bang/2022. M/s. Intuit India Product Development Centre Pvt.Ltd.

various sub-grounds are dismissed as infructuous. The learned AR did not press ground No.3.2 and its sub-grounds. Grounds No.4 and 5 are with regard to levy of interest u/s 234B and 234D of the I.T.Act. The levy of interest u/s 234B and 234D of the I.T.Act is only consequential, and hence, Grounds No.4 and 5 are rejected. The surviving ground, namely, Ground No.3.1 and its sub-grounds (a), (b) and (c), reads as follows:-

“3.1 Deduction under Chapter VIA of the Act. (a) The learned AO has erred in considering Rs.2,00,000 as deduction under Chapter VIA of the Act instead of Rs.43,22,544. (b) The learned AO ought to have observed that the deduction claimed by the Appellant under Chapter VIA was not disputed in the final assessment order. (c) The learned AO ought to have allowed the deduction under Chapter VIA of the Act of Rs.43,22,544 without computing the taxable assessed income and applicable tax.” 3. The learned AR submitted that the Assessing Officer, in the final assessment order, had restricted the deduction under Chapter VIA of the I.T.Act to Rs.2,00,000 instead of Rs.43,22,544 claimed in the return of income. It was submitted by the learned AR that the assessee was not put on notice for restricting the claim of deduction under Chapter VIA of the I.T.Act and prayed that the matter may be restored to the files of the A.O. to provide an opportunity to the assessee to explain that it is entitled to deduction under Chapter VIA amounting to Rs.43,22,544, while computing the taxable assessed income.

3 IT(TP)A No.957/Bang/2022. M/s. Intuit India Product Development Centre Pvt.Ltd.

4.

The learned Departmental Representative was duly heard.

5.

We have heard rival submissions and perused the material on record. The A.O. in the final assessment order had restricted the same to Rs.2 lakh without intimating the assessee the reasons for doing so. In the interest of justice and equity, we restore the matter to the files of the A.O. to examine the claim of the assessee raised in ground No.3.1 and its sub-grounds. It is ordered accordingly.

6.

In the result, the appeal filed by the assessee is partly allowed for statistical purposes.

Order pronounced on this 28th day of April, 2023.

Sd/- Sd/- (Laxmi Prasad Sahu) (George George K) ACCOUNTANT MEMBER JUDICIAL MEMBER Bangalore; Dated : 28th April, 2023. Devadas G* Copy to : 1. The Appellant. 2. The Respondent. 3. The DRP-1, Bangalore. 4. The Pr.CIT-3, Bengaluru. 5. The DR, ITAT, Bengaluru. 6. Guard File. Asst.Registrar/ITAT, Bangalore

More judgments on Section 144C(13)

All 3,426 judgments and leading authorities on Section 144C(13) →

Recent GST High Court judgments

Search GST case law →