M/S AUGUSTAN KNITWEAR PRIVATE LIMITED,COIMBATORE vs. ADIT, CPC, BENGALURU

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ITA 122/CHNY/2022Status: DisposedITAT Chennai25 August 2022AY 2018-193 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal directed the AO to revise the intimation under Section 143(1) to align with the scrutiny assessment order, allowing the Section 80JJAA deduction. The CIT(A)'s observation was considered misplaced.

What were the facts?

The assessee claimed a deduction under Section 80JJAA, which was denied by the CPC in an intimation under Section 143(1) for not filing Form 10DA. The CIT(A) dismissed the appeal, stating no increase in employees. However, a subsequent scrutiny assessment under Section 143(3) allowed the deduction.

What were the issues?

Whether the deduction under Section 80JJAA should be allowed despite the initial denial in the intimation under Section 143(1), given the subsequent allowance in a scrutiny assessment.

Which sections of the Income-tax Act were involved?

Section 80JJAA,Section 143(1),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI

Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI SONJOY SARMA

आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2018-19 arises out of the order of learned Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 26-12- 2021 in the matter of an intimation issued by Centralized Processing Center (CPC), Bengaluru u/s 143(1) of the Act on 12-01-2020. 2. In this appeal, the sole grievance of the assessee is denial of deduction by CPC u/s 80JJAA for Rs.8.90 Lacs as claimed by the 2 - assessee in the return of income. This is the second year of this claim. In the intimation, the claim has been denied since the assessee has not filed prescribed form 10DA to claim this deduction. The Ld. CIT(A) dismissed the ground on the observation that additional employee cost would be nil as there was no increase in the number of employees from previous year. Aggrieved, the assessee is in further appeal before us.

3.

During hearing, it transpires that the return of income was subjected to complete scrutiny and an assessment was framed u/s 143(3) r.w.s. 144B of the Act on 21.04.2021. Pursuant to the same, a computation sheet has been generated on 21.04.2021 wherein deduction under Chapter VIA has been allowed to the assessee for Rs.9.40 Lacs. This deduction includes deduction claimed by assessee u/s 80JJAA. Logically, the intimation issued u/s 143(1) should have merged with the regular assessment framed u/s 143(3) and the demand should have been revised against the assessee. Apparently, the same has not been done which is the grievance of the assessee.

4.

Considering the given factual matrix, we direct Ld. AO to revise the intimation issued u/s 143(1) in the light of scrutiny assessment order dated 21.04.2021 and raise consolidated demand, if required, against the assessee in the system after allowing deduction u/s 80JJAA. The observation of Ld. CIT(A) is misplaced since the assessee is claiming deduction in the second year for additional employee cost incurred during first year i.e., AY 2017-18.

5.

The appeal stand allowed for statistical purposes.

Order pronounced on 25th August, 2022.

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