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Income Tax Appellate Tribunal, KOLKATA BENCH “A”, KOLKATA
Before: SHRI RAJPAL YADAV, VICE- & SHRI GIRISH AGRAWAL
O R D E R
PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:
This appeal by the assessee is arising out of the order of CIT(A), National Faceless Appeal Centre (NFAC), Delhi vide Order No. ITBA/NFAC/S/250/2021-22/1041423040(1) dated 24.03.2022 against the assessment order passed u/s 143(3) read with sections 143(3A) & 143(3B) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) by National e-Assessment Centre, Delhi dated 12.01.2021.
Grounds taken by the assessee are reproduced as under:
“i. For that on the facts and circumstances of the case and in law, the disallowance of claim of deduction under Chapter VI of the Act is illegal and not sustainable. ii. For that on the facts and circumstances of the nature of business, the total income earned by the appellant is exempt u/s 10(1) of the Act. iii. For that the computation sheet is not in agreement with the assessment order u/s 143(3) of the Act. iv. For that the interest charged u/s 234A, 234B, 234C & 234F amounting to Rs. 4,28,748/- is not applicable in accordance with the Act.
Srijani Farmers Society For Rural Livelihood Development A.Y. 2018-19 v. For that the appellant craves leave to add and modify or drop any other ground before or in the curse of hearing the appeal.”
Facts of the case are that the assessee is a registered society under the West Bengal Act XXVI of 1961 and assessed as an Association of Persons (AoP). Assessee is engaged in Agricultural activities, farming and produced high yield seeds of paddy, pulses and other medicinal plants derived from agricultural land of members. Assessee filed its return of income on 14.01.2019 reporting total income as Nil by claiming deduction u/s 80P(2) of Chapter VI-A of Rs. 31,58,116/-. Case of assessee was selected for limited scrutiny on the issue of “deduction from total income under Chapter VI”.
3.1. In para 3 of the assessment order, ld. AO noted that “3. In response to the notice, the assessee filed relevant requisite documents through the ITBA portal.
4. After taking into account all relevant material available on record, an assessment is hereby made without making any modification of the returned income and the sum payable or refund of any amount due on the basis of the assessment is determined as per the notice of demand.
5. Assessment order is finalized u/s 143(3) read with section 143(3A) and 143(3B) of the Income-tax Act, 1961.”
From the perusal of the above, it is evident that returned income of the assessee was accepted as the income assessed u/s 143(3). The moot point before the Tribunal is in respect of demand raised by the ld. AO in the computation sheet, of Rs. 14,00,517/- wherein the deduction claimed u/s 80P(2) has not been taken into account, which is not in agreement with the assessment order passed by the ld. AO.
Ld. Counsel for the assessee referred to page 24 of the Paper Book containing ITR acknowledgement for the return filed by the assessee. Scanned copy of the same is reproduced as under:
Srijani Farmers Society For Rural Livelihood Development A.Y. 2018-19
Ld. Counsel submitted that once ld. AO has given categorical findings that the returned income is accepted as assessed income without making any modification, there is no occasion for any tax demand payable by the assessee against the return filed by the assessee. The tax payable in the return filed by the assessee was Rs.
Srijani Farmers Society For Rural Livelihood Development A.Y. 2018-19 1,000/- which was paid as self-assessment tax. Accordingly, the demand so raised is void ab initio and to be vacated, stated the ld. Counsel. When these facts were confronted to the ld. Sr. DR, he could not place anything to controvert the above stated facts.
We have heard the rival contentions and perused the material available on record. We find that the submission made by the ld. Counsel are worth considering and the demand raised in the computation sheet is not in agreement with assessment order passed by the ld. AO. We refer to the provisions of section 156 of the Act relating to notice of demand according to which the assessee shall be served with a notice of demand in the prescribed form when any tax, interest, penalty, fine or any other sum is payable in consequence of any order passed under this Act. It is important to note that the sum payable has to be in consequence of an order passed under the Act. In the present case before us, the computation sheet and demand payable is not in consequence with the assessment order passed by the ld. A.O wherein the return has been accepted without any modification and assessed as such. Accordingly we direct to the ld. AO to vacate the demand so raised. Ground No.3 taken by the assessee is allowed. Other grounds are thus not adjudicated upon which otherwise will be a mere academic exercise.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 28.12.2022.