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Facts
The assessee, an ex-employee of BHEL, filed his original income tax return and later two revised returns, which led to significant deductions and refund claims. The Assessing Officer (AO) disallowed the enhanced deductions, and the First Appellate Authority (FAA) sustained and enhanced the disallowance. The assessee appealed to the Tribunal, citing an earlier identical case.
Held
The Tribunal condoned the delay in filing the appeal. Citing a coordinate bench's decision on identical facts, the Tribunal set aside the orders of the lower authorities. The AO was directed to accept the assessee's original return and recompute the income accordingly.
Key Issues
Whether the assessee's revised returns, filed due to wrong guidance from an ITP, should be ignored in favor of the original return, and whether the disallowances made by the AO and confirmed by the FAA are justified.
Sections Cited
250, 142(1), 143(2), 139(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI GEORGE GEORGE KAND
आदेश /O R D E R PER GEORGE GEORGE K, VICE PRESIDENT:
This appeal filed at the instance of the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 15.10.2024 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2020-21.
2. There is a delay of 62 days in filing this appeal before the Tribunal. The appeal ought to have been filed before ITAT on or before 31.12.2024. However, the appeal was filed belatedly on 03.03.2025. The assessee has filed a petition for condonation of delay and also supporting affidavit stating there in the reasons for belated filing of this appeal. The reasons stated for belated filing of this appeal are as follows:- It is submitted that the assessee had not noticed the order posted in the ITBA portal. The assessee had retired from service and does not regularly check the portal or e-mail. Due to high cholesterol and related health issues, the assessee was under severe medication, which made him inactive through the day and due to which he could not attend to the regular activities. In the midst of health issues, he lost track of the appeal pending before the CIT(A). Incidentally, the auditor while checking the portal, noticed the order in the month of February and informed the assessee. Thereafter, the order was sent to the Advocate for preparing the appeal. The appeal was thereafter prepared and filed on 03.03.2025. In the process, the appeal came to be filed with a delay of 62 days.
On perusal of the reason stated, we are of the view that there is sufficient cause for belated filing this appeal and no latches can be attributed to the assessee. Hence, we condone the delay of 62 days in filing this appeal and proceed to dispose off the appeal on merits.
Brief facts of the case are as follows:- The assessee is an ex- employee of Bharat Heavy Electrical Limited (BHEL). For the relevant 2020-21, the assessee had filed his return of income on 26.06.2020 declaring total income of Rs.20,86,760/- after claiming deductions under Chapter VIA amounting to Rs.2,05,552/- and a house property loss of Rs.1,02,210/-. Subsequently, on 22.05.2021, the assessee had filed two revised returns on the same day. In the first revised return, the assessee had declared income of Rs.11,85,640/- with enhanced chapter VI-A deductions of Rs.11,74,329/- and house property loss of Rs.1,98,000/- and in the second revised return, the assessee had declared income of Rs.9,51,640/- with further enhanced chapter VI-A deductions of Rs.14,07,329/- and house property loss of Rs.1,99,000/-. These revised returns resulted in claim of refund of Rs.2,81,150/- and Rs.3,49,130/-. The case was selected for scrutiny under CASS. During the assessment proceedings, the AO issued multiple notices u/s.142(1) and 143(2) of the Act seeking documentary evidence for the claim of deductions and house property loss. The assessee failed to furnish any substantiating documents instead requested to ignore the revised return. Therefore, the AO completed the assessment by disallowing the excess Chapter VI-A deductions of Rs.11,74,329/- and house property loss of Rs.1,98,000/- (based on first revised return) and assessed the total income at Rs.25,57,969/-.
Aggrieved by the order of the AO, the assessee filed an appeal before the First Appellate Authority (FAA). The FAA after detailed examination, dismissed the appeal of the assessee vide order dated 15.10.2024. The FAA had not only sustained the additions made by the AO but enhanced them considering the latest revised return (based on second revised return), increasing the disallowance of Chapter VI-A deductions to Rs.14,07,329/- and house property loss to Rs.1,99,000/-. The FAA observed that assessee’s mala fide intentions in claiming bogus deductions to evade tax, noting that the revised claims were withdrawn only after scrutiny selection and no evidence was provided to support any deductions beyond the Form- 16 (which aligned only with the original return).
Aggrieved by the order of the FAA, the assessee filed the present appeal before the Tribunal. The grounds raised
by the assessee read as follows:-
1. The order of the CIT(A), NEAC in dismissing the appeal is contrary law, erroneous and unsustainable on the facts of the case.
2. The CIT(A) NEAC erred in confirming the addition of Rs. 11,74,329/- as excess claim of deductions under chapter VIA by the assessee.
3. The CITA) NFAC failed to appreciate that in the original return of income filed on 01.10.2020, the claim of deductions were in compliance to the statutory provisions and ought to have duly considered the same and deleted the addition.
4. The CT(A) NFAC further failed to appreciate that the revised returns of income filed on 21.5.202 1, by an ITP, carried the excess claim of deductions, which the assessee had informed the assessing officer to ignore and reject the claim of refund made in the revised return.
5. The CIT(A) NFAC further failed to appreciate that the assessee had not taken credit of the refund claimed in the revised return and hence confirming the addition was arbitrary, unjust and not in accordance with the provisions of the Act.
6. The CIT(A) NEAC further failed to appreciate that confirming the addition tantamounts to assessing an amount on which the assessee had not made any claim of deduction in the original return of income filed and hence needs to be deleted.
The CIT(A) NFAC ought to have considered the loss from house property of Rs.1,02,2 10/- claimed in the original return and not rejected the contentions of assessee.
8. The CIT(A) NFAC, in any view of the matter, ought to have duly accepted the loss from house proper as per the original return and there was no basis to rejected the same.
9. The CIT(A) NFAC, in any event, ought to have seen that the original return was a valid return carrying no excess claim of deductions and thus the addition made by the officer was to be deleted and the return filed on 01.10.2020 needs to be accepted.
7. The Ld.AR submitted that the FAA had erred in confirming the addition made towards excess claim of deductions under Chapter-VIA and disallowing the loss from house property by rejecting the assessee’s plea to ignore the revised returns and consider the original return filed by the assessee. The Ld.AR submitted that the issue raised in this appeal is squarely covered in favour of the assessee by the order of the Co-ordinate Bench of the Tribunal in the case of
On the other hand, the Ld.DR submitted that the FAA’s order is well-reasoned, supported by facts and law and warrants no interference. The Ld.DR submitted that the grounds raised by the assessee are devoid of merit and are liable to be dismissed.
We have heard rival submissions and perused the material on record. We note that the assessee is an ex-employee of BHEL and filed his original return of income based on the Form 16 issued by the employer and subsequently, filed the revised returns based on the wrong guidance of ITP enhancing the Chapter VI-A deductions and house property loss. The case was selected for scrutiny assessment. During the assessment proceedings, the assessee had prayed for ignoring the revised returns filed by the assessee since the same had been filed with wrong guidance of tax advisors and to consider the original return filed on 26.06.2020. However, the AO had rejected the assessee’s plea and framed the assessment considering the first revised return filed by the assessee and on appeal, the FAA had enhanced the assessment by considering the second revised return filed by the assessee. Before us, the Ld.AR had only requested for considering the original return filed by the assessee. We note that on identical facts, this issue has been set aside to the AO by the order of the Co-ordinate Bench of the Tribunal in the case of Ramesh Venkataswamy in (order dated 26.07.2024). The relevant finding of the Tribunal reads as follows:- 9. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. The scrutiny assessment of the assessee for the AY 2020-21 was carried out by the AO and framed the assessment considering the revised return filed by the Assessee, which was confirmed by the Ld.CIT(A). During the assessment proceedings, the assessee had prayed for ignoring the revised return, since the same had been filed with wrong guidance of the tax advisors and to consider the original return filed u/s.139(1) on 01.01.2020, wherein the total income filed was Rs.20,80,590/-. We note that, the assessee is an individual and having a salary income and filed the original return of Income based on the Form 16 issued by the employer. However, the revised return has been filed by the assessee based on the wrong guidance of the tax advisors and which had been brought to the notice of the AO, during the assessment proceedings and also prayed for considering the original return filed U/s.139(1) for assessment by ignoring the revised return of income filed. Therefore, we do not countenance the action of the lower authorities and hence, we deem it fit to set aside the order of the Ld.CIT(A) and direct the AO to accept the original return filed by the assessee and re compute the income in accordance with law and allowed the appeal of the assessee.
In light of the Co-ordinate Bench order of the Tribunal cited supra, we restore the matter back to the file of the AO. The AO shall follow the directions of Tribunal in case cited supra and decide the issue in accordance with law. It is ordered accordingly.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 13th August, 2025 at Chennai.