INNO vs. OURCE SERVICES PRIVATE LIMITED,MUMBAIVS.DCIT, 14(1)(1), MUMBAI

PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against order dated
09.05.2024 passed by the Ld. Commissioner of Income-tax
(Appeals) – Madurai [in short ‘the Ld. CIT(A)’] for assessment year
2021-22 arising from order passed by the Central Processing Centre
(CPC) Bengluru dated 22.09.2022 u/s 143(1) of the Income-tax Act,

1961 (in short ‘the A reproduced as under 1. Whether o law, the lea
(Appeals), Ma before him ag
22 Septemb owing to th
December 20
2. Whether o law, the lea
(Appeals), Ma
Centralized deduction und to business income of Rs.
2. Thereafter, the following additional g
3. That the deduction all giving an in 1st proviso be 4. That the CP for deduction under sectio per which the 5. Assuming sub-section (1
the quantum regarded as as apparent f
3. We have hear admissibility of the a being purely legal in Innovso
ITA

Act’). The grounds raised by th
:
n facts and in the circumstances of the rned Additional/Joint Commissioner of adurai ought to have appreciated that gainst the intimation under Section 1
er 2022 ought to be dismissed as he fact an assessment order was pa
022. n facts and in the circumstances of the rned Additional/Joint Commissioner of adurai has erred in confirming the a Processing Center in restricting the der section 80JJAA of the Act of Rs. 30,1
income of Rs. 6,22,44,206 instead of 11, 12,68,378. assessee vide letter dated 3
grounds:
adjustment as made by the CPC r lowable under section 80JJAA of the A ntimation in respect of the same in acco elow section 143(1)(a) is illegal and bad in PC was not justified in reducing the appe n under section 80JJAA in the Intima on 143(1) without specifying the su e said adjustment has been made.
without admitting that sub-clause ii) of 1) of section 143 has been applied in the p of deduction claimed by the appellant
'an incorrect claim' and certainly not 'in from any information in the return'
d rival submissions of the additional ground. The additiona nature, not requiring investigat ource Services Pvt. Ltd.
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he assessee are case and in f Income-tax t the appeal
43(1) dated infructuous assed on 29
case and in f Income-tax action of the amount of 10,31,823 up f gross total
30.08.2024 filed reducing the Act without ordance with n law.
ellant's claim ation issued ub-clause as clause (a) of present case, could not be correct claim parties on the al ground raised tion of the fresh facts, same were adm the Hon’ble Supreme
(SC) and Jute Corpo
4. Briefly stated domestic private limi was engaged in the other entities. For th return of income on 3
the said return of in head ‘profit and gain business of manpow under the head ‘inco business income ma
4,90,24,172/-). After out gross total inc assessee computed amounting to Rs.30, incurred, but restric income’ of Rs.11,12, return of income filed the Act on 22.09.202
claimed u/s 80JJA
Rs.6,22,44,207/-
Rs.11,12,68,378/- a Innovso
ITA mitted for adjudication in view o e Court in the case of NTPC Ltd oration of India Ltd. 187 ITR 6
facts of the case are that the ited company and during year business of providing manpo he year under consideration, th
30.03.2022 declaring total incom come, the assessee declared in ns of business or profession’ ( i wer supply) at Rs. 6,22,44,207
ome from other sources’( i.e. inc ay be in the nature of intere r adding income from both thes ome to Rs. 11,12,68,378/-.
deduction eligible u/s 80JJ
,10,31,823/- for the additional cted the claim to the extent of 68,378/- resulting into ‘Nil’ to d by the assessee was processe
22 u/s 143(1) of the Act, wherei
AA was restricted to ‘busine as against
‘gross total as claimed by the assessee.
ource Services Pvt. Ltd.
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A No. 3424/MUM/2024
f the decision of d. 229 ITR 283
688 (SC).
e assessee is a under reference ower services to he assessee filed me at Rs. Nil. In come under the i.e. income from 7/- and income come other than est etc.) at Rs.
se heads worked
Thereafter, the AA of the Act l employee cost the ‘gross total tal income. The ed u/s 143(1) of in the deduction ess income’ of income’
of Aggrieved, the assessee filed appeal
Before the Ld. CIT(A against order u/s 14
assessment order u/
submission filed du said assessment or submission of the under:
OBSERVATIO
The appellant
December 202
In view of the captioned App no: NFAC/20
latest appeal
NFAC/2020-2
consider det
February 202
assessment o
The appeal a against 143(1
is not possible
5.2 Ground
Section 80JJA the of Rs 6,2
Section 80JJA
. In the 143(3
disallowed an However, the unless stated applicable w above issue,
Innovso
ITA l before the Ld. CIT(A) but cou
A), the assessee urged for merg
43(1) of the Act with the appe
/s 143(3) of the Act and to co uring ongoing appeal proceedin rder. The Ld. CIT(A) after c assessee dismissed the appea
ON AND DECISION:
t admits that the order u/s143(3) is pass
22. The appellant has requested that e above, we request your Honour to kind peal filed against the rectification order
020- 21/10192468 dated 21 October 20
filed against the Assessment Order (Ap
21/10201653 dated 27 January 202
tailed submission filed vide letter da
24 during ongoing appeal proceeding aga order.
against the 143(3) order lies with CIT
1) lies with JCIT(A). Hence combining this e.
1 is against CPC restricting the claim
AA of the Act amounting to INR 30,10,3
22,44,207/- and not restricting the clai
AAto the gross total income of INR 11,12,6
3) order the claim under Section 80JJAA nd a finding is given e interpretation of law is always Pro d otherwise. In the extant case, the amen ith effect from 01- 04-2019. While as the assessee has claimed deduction u/s ource Services Pvt. Ltd.
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A No. 3424/MUM/2024
uld not succeed.
ging the appeal eal filed against onsider detailed ngs against the considering the al observing as sed on29
dly merge r (Appeal
022) with ppeal no:
23) and ated 23
ainst the T(A) and s appeals m under 31,823 to m under 68,378/-
A itself is ospective ndment is per the s 80JJAA of over Rs.3
appointments respect to ab
2018-19 wou further that previous year days or one h is employed f hundred and immediately been employe this section provisions of three years in there is no q assessee.
Since income assessee, dis u/s 80JJAA a 5.3 In the 143
not eligible assessment y eligible for de income of IN business inco appellate auth decide in favo in this order.
5.4 The claim
Section 80A(4
profit and gai linked deduct restricted to t pertinent to n
Appellant is employee cos not provide fo
Hence, provis
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30,10,31,823/- inter-alia, taking into s as shown to be taken place in FY 2017- bove amendment, appointments made uld be eligible for the said provision of, "
where an employee is employed du r for a period of less than two hundred a hundred and fifty days, as the case may for a period of two hundred and forty day d fifty days, as the case may be, succeeding year, he shall be deemed ed in the succeeding year and the prov shall apply accordingly". Please note law, deduction u/s 80JJAA is allowable ncluding the year of appointment and t question of taking it to FY 2020-21 as e declared is of Rs. 11,12,68,378/- sallowance of Rs.11,12,68,378/- is bei as claimed by the assessee.
3(3) order a finding is given that the app for deduction u/s Section 80JJAA year. But the issue whether the app eduction under Section 80JJAAon the gr
NR 11,12,68,378/- or is to be restricted ome of Rs 6,22,44,207/- will be releva hority in the appeal filed against the 143
our of the appellant. Hence this issue is d m of the appellant is that 4) of the Act provides that where the am in is claimed and allowed as deduction i.
tion, the deduction under those section the business income earned only. Howe note that under Section 80JJAA of the eligible to claim deduction of the ad t incurred in the course of business and for deduction of profit and gain from a b sion of Section 80A(4) of the Act shal ource Services Pvt. Ltd.
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A No. 3424/MUM/2024
account
-18. With in F.Y.
"Provided uring the and forty y be, but ys or one in the to have visions of as per e only for therefore, done by by the ing done pellant is for this ellant is ross total d to the ant if the 3(3) order discussed mount of .e., profit shall be ever, it is Act, the dditional not does business.
ll not be applicable for Act since the additional em
Further, sub-s vide Finance A the said sub-s relevant extra wherein the in The profit lin considerable deductions u the taxpayers profits.
With a view amend the pr provide the fo
(i) deduction allowed unde or section 10
Chapter VIA certain incom respect of sam allowed in the (ii) (ii) the ag provisions ref and gains of business, as t
(iii) no deduct above, shall b in the return o
These amend
April 2003, assessment y
7.13. Hence, intention, it i
80A(4) is app
Innovso
ITA r claiming deduction under Section 80JJA e amount is the claimed as a deductio mployee cost and not the profit from busine section 4 of Section 80A of the Act was in Act (No. 2) Act, 2019. The intention of intr section was to prevent abuse of tax incen act of the Memorandum to Finance B ntention is mentioned is provided below:
nked deductions in Chapter VIA are p misuse. Further, since the scope nder various provisions of Chapter VIA s, at times, claim multiple deductions for t to preventing such misuse, it is prop rovisions of section 80A of the Income-ta ollowing, namely:- in respect of profits and gains shall er any provisions of section 10A or secti
0B or section 10BA or under any prov under the heading "C.-Deductions in re mes" in any assessment year, if a dedu me amount under any of the aforesaid h e same assessment year; aggregate of the deductions under the ferred to in (i) above, shall not exceed th f the undertaking or unit or enterprise o the case may be; tions under the various provisions referre be allowed if the deduction has not been of income; dments will take effect retrospectively from and will accordingly apply in rela year 2003-2004 and subsequent years reading Section 80A(4) of the Act along is submitted that the restriction under plicable for profit linked deduction and gi ource Services Pvt. Ltd.
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AA of the on is the ess.
troduced roduction ntive. The Bill 2009
prone to of the overlap, the same posed to ax Act to l not be on 10AA isions of espect of uction in has been various he profits r eligible d to in (i) n claimed m the 1st ation to with the r Section iven that Section 80JJA under Section total income a 5.5 It is corr deduction an the words “gr
44AB applies business and have profits business and satisfied. In conditions ar deduction.
5.6 Section 80
(4) Notwithst section 10A o in any provis
Deductions in an assessee undertaking claimed and provisions for and to the e allowed und assessment y gains of suc business, as t
The section is under the h incomes”, and Deductions in under section and gains of business,is a section 10B o action of CPC the business and facts. Gro
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AA is not a profit linked deduction, the d n 80JJAA of the Act shall be allowed up as per provision of Section 80A(2) of the A rect that section 80JJAA is not a prof d is linked with expenditure. The sectio ross total income of an assessee to whom s, includes any profits and gains deriv d thus is applicable only to undertakin from business. The appellant has pro d is eligible for deduction if other condit the 143(3) order AO has given a find re not satisfies and hence is not elig
0A(4) is as under tanding anything to the contrary conta or section 10AA or section 10B or section sions of this Chapter under the headi n respect of certain incomes", where, in th e, any amount of profits and gains or unit or enterprise or eligible bus allowed as a deduction under any r any assessment year, deduction in re extent of, such profits and gains shal er any other provisions of this Act f year and shall in no case exceed the pro ch undertaking or unit or enterprise or the case may be.
s very clear that “any provisions of this heading "C.—Deductions in respect of d section 80H to 80VV comes under head n respect of certain incomes. Hence the pr n 80A(4) and shall in no case exceed th such undertaking or unit or enterprise o applicable to section 10A or section or section 10BA and section 80H to 80
C restricting the deduction under section 8
income of Rs 6,22,44,207/- is correct as ound 1 Is dismissed.
ource Services Pvt. Ltd.
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deduction to gross
Act.
fit linked ons uses m section ved from ngs that ofit from tions are ding that gible for ained in 10BA or ing "C.—
e case of s of an siness is of those espect of, l not be for such ofits and r eligible
Chapter f certain ding "C.—
rovisions he profits or eligible
10AA or 0VV. The 80JJAAto s per law

Ld. counsel for the assessee file o 74 including the intimation o
9.2022. e up the additional ground No.
additional ground, it is subm posing adjustment was issued p
/s 143(1)(a) of the Act and ued is illegal and bad in law.
rival submissions of the parti als on record. The proviso bel at before issuing intimation ord see shall be intimated the propo said proviso is reproduced( b n has been made under section 139, or in ection 142, such return shall be proces or loss shall be computed after ma ely:—
metical error in the return; 56[***]
ect claim, if such incorrect claim is n in the return; nce of loss claimed, if return of the previou s is claimed was furnished beyond the -section (1) of section 139; nce of expenditure 58[or increase in inco ource Services Pvt. Ltd.
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ed a Paper Book order u/s 143(1)
3 raised by the mitted that no prior to issue of therefore, the ies and perused low the section der u/s 143(1)(a) sed adjustment.
bold portion) as n response to a notice ssed in the following aking the following apparent from any us year for which set e due date specified me] indicated in the audit repor the return;
(v) disallowan of the prov respect of date specif
(vi) addition of which has Provided that no is given to the electronic mode:
Provided further th considered before received within th shall be made:]
60[Provided also th relation to a return the 1st day of Apri
6.2 The ld counsel
143(1)(a) of the Act adjustment, thus, w justice and void-ab-in Ld. counsel for the a trace any intimation
143(1)(a) of the Act w the affidavit dated 30
mentioned that desp couldn’t be located/t the affidavit it is not Chitale and in what c
Innovso
ITA rt but not taken into account in computin nce of deduction claimed under 59[section visions of Chapter VI-A under the headin certain incomes", if] the return is furnis fied under sub-section (1) of section 139; f income appearing in Form 26AS or Fo not been included in computing the total o such adjustments shall be made un assessee of such adjustments eithe hat the response received from the asses making any adjustment, and in a case w hirty days of the issue of such intimatio hat no adjustment shall be made unde n furnished for the assessment year com il, 2018;]”
argued that any intimation or t without issuing intimation l would be in violation of princ nitio. But, during the course of assessee submitted that assesse n issued as per the said provis with respect to the adjustment
0.08.2024 filed by one ‘Shri Am pite thorough search, the said i traced in their records. It is note mentioned what is the designat capacity said deposition had bee ource Services Pvt. Ltd.
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A No. 3424/MUM/2024
ng the total income in n 10AA or under any ng "C.—Deductions in shed beyond the due or orm 16A or Form 16
income in the return:
nless an intimation er in writing or in ssee, if any, shall be where no response is n, such adjustments er sub-clause (vi) in mmencing on or after der passed u/s letter proposing ciple of natural the hearing, the e was unable to o below section t carried out. In mit Chitale’, it is intimation letter ed by us that in tion of Shri Amit en given. We are of the opinion that additional ground c proposing adjustmen the assessee to file company or any o intimation letter was has filed affidavit s traceable in the reco person making affida filed an application b
Information Act for that any such intima
Authorities. Since as letter was never issu that said intimation proving that said in would shift on to Rev was ever issued and accordance with law would be in the na
‘irregularity’. But in that no intimation let serial No. 3, cannot we dismiss the same
Innovso
ITA t since it is the assessee, w hallenging the fact that no in nt was issued to the assessee, t an affidavit from the Principa other authorized person stat never issued to the assessee. B stating that said intimation ord of the assessee, and the a avit is also not clear. The asse before the Income-tax Authority collecting said intimation lette ation letter was never issued by sessee is asserting the fact that ued, the onus lies on the asses letter was never issued. If asse ntimation letter was never issu venue to substantiate that any d then issue in dispute could w as to whether non issue of i ature of ‘illegality’ of the orde absence of any such confirma tter was issued, the additional g be decided in favour of assess as infructuous.
ource Services Pvt. Ltd.
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who has raised ntimation letter then onus is on al Officer of the ting that such But the assessee letter was not authority of the ssee could have y under Right to er or confirming y the Income-tax t said intimation ssee to establish essee succeed in ued, the burden such intimation d be decided in intimation letter er or a curable ation of the fact ground raised at ee. Accordingly,

Innovso
ITA an anomalous situation for t ith implementing the appellate o e hold that the intimation orde ve and infructuous in the light ed u/s 143(3) of the Act. The g ingly adjudicated as prayed by t ntimation order with assessme uired to adjudicate additional gr of the appeal. However, we gra as well as to Revenue to rais n u/s 80JJAA to the extent gro ncome by way of additional gro
Authority in appeal pending ag which may be decided by the ld ance with law. Accordingly, the adjudicated as discussed above.
he appeal of the assessee is dism ced in the open Court on 29/0
/-
S
CHAUHAN)
(OM PRAK
MEMBER
ACCOUNTA ource Services Pvt. Ltd.
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A No. 3424/MUM/2024
the subordinate orders.
er u/s 143(1) of of the scrutiny ground no. 1 of the assessee. In nt order in the round no. 5 and ant the liberty to se this issue of oss total income ound before the gainst the order d First Appellate grounds raised missed.
01/2025. KASH KANT)
ANT MEMBER

Copy of the Order forward
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.

////

Innovso
ITA ded to :

BY ORDER

(Assistant Re

ITAT, Mu ource Services Pvt. Ltd.
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A No. 3424/MUM/2024
R, gistrar) umbai