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Facts
The assessee, a doctor in the Army, appealed against the order of the CIT(A) for AY 2020-21, which arose from an assessment order under Section 143(3). The assessee claimed deductions and exemptions that were not allowed by the Assessing Officer, citing a belief that they were as per law, and attributing reliance on tax consultants.
Held
The Tribunal held that the assessee is eligible for deduction of Rs. 1,50,000/- u/s. 80C, exemption of Rs. 63,566/- u/s. 10, deduction of interest of Rs. 60,353/- u/s. 24, and deduction u/s. 80TTA of Rs. 3,190/-. For the penalty appeal (ITA No. 1810/PUN/2025), the Tribunal followed a binding precedent and directed the deletion of the penalty.
Key Issues
Whether the assessee is eligible for the claimed deductions under Section 80C, 10(14), 24, and 80TTA. Whether the penalty levied under Section 270A is sustainable.
Sections Cited
250, 143(3), 80C, 80TTA, 10(14), 24, 270A, 270A(8), 270A(9), 80CCC, 80CCD(1), 16
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “SMC” :: PUNE
ORDER PER DR. DIPAK P. RIPOTE, AM: These two appeals filed by the assessee against the order of ld.Commissioner of Income Tax Appeal(NFAC) passed under section 250 of the Income Tax Act, 1961 for A.Y.2020-21 dated 04.06.2025 emanating from the Assessment Order under section 143(3) of the Income Tax Act, 1961.
& 1810/PUN/2025 [A] 1.1 At the time of hearing, Assessee filed additional grounds of appeal which are as under : “1] The assessee submits that the ld.A.O. has erred in not granting deduction u/s.80C of Rs.1,50,000/-. 2] The ld.A.O. erred in not granting deduction u/s.80TTA of Rs.3,190/-. 3] The ld.A.O. erred in not granting exemption u/s.10(14) of Rs.63,566/-. 4] The ld.A.O. erred in not granting deduction of interest u/s.24 of Rs.60,353/-“ Submission of ld.AR :
2. Ld.Authorised Representative(ld.AR) for the Assessee filed a paper book.
2.1 LdAR submitted that the Assessee is a Doctor in Army presently posted in Field Hospital Sagar, Madhya Pradesh. Ld.AR submitted that Assessee doctor has studied in Armed Forces Medical College-Pune and then joined Army. For the last 21 years, he is serving in Indian Army. He is Radiologist who has done DM(Neuro Radiology). Ld.AR submitted that the nature of Assessee’s profession is such that he does not get time to understand taxation and was dependent on a tax consultant. Ld.AR invited our attention to the Affidavit of the Assessee which is duly notarized wherein, he has submitted that one Mr. Anirban Chakarbarti suggested him to 2 & 1810/PUN/2025 [A] purchase a HDFC Policy Sanchay Plus, then he also asked assessee to revise his return. Assessee purchased HDFC Policy by paying Rs.2,50,000/- on 22nd March 2021, which is mentioend in Assessment Order. Mr.Amit Banerjee filed revised return claiming certain deductions and Assessee was made to believe that those deductions were as per law. Since assessee have no knowledge of Income Tax, he believed those persons. Ld.AR filed copies of communications between those persons and Assessee to prove the point.
Then, Ld.AR submitted that Assessee had filed Original Return of Income on 07/08/2020 declaring Total Income at Rs.31,48,130/-. Ld.AR filed copy of the Original Return. Ld.AR submitted that Assessee is eligible for deduction u/s.80C of Rs.1,50,000/- but the AO has not allowed it. Ld.AR invited our attention to Form number 16 issued by Ministry of Defense wherein said Rs.1,50,000/- is shown clearly. (Page 22 of paper book). Ld.AR submitted that Assessee is eligible for deduction of Interest u/s.24 of Rs.60,353/- and hence only Rs.60,353/- deduction should be allowed u/s.24 of the Act. Ld.AR submitted copy of Interest paid certificate issued by The Army Group Insurance Fund.Page 17 of 3 & 1810/PUN/2025 [A] the paper book. Ld.AR submitted that Assessee is eligible for deduction u/s.10(14) of Rs.63,566/-, and the said amount appears in the Form 16 issued by Ministry of Defense. Ld.AR submitted that Assessee is eligible for deduction of Rs.3,190/- u/s.80TTA. Ld.AR submitted that this deduction should be allowed to the assessee. Ld.AR again submitted that due to mistake of the Tax consultant the revised return was filed.
Submission of ld.DR : 4. Ld.Departmental Representative(ld.DR) for the Revenue has not objected to assessee’s claim.
Findings & Analysis : 5. We have heard both the parties and perused the records. In this case the Assessee is a Doctor having qualification MD(radiology), DM (Neuro Radiology). It is an admitted fact that Assessee is serving Indian Army for many years as Doctor. As per the Form Number 16 issued under Rule 31 of Income Tax Rules, Ministry of Defense, Government of India is the Employer of the Assessee.
& 1810/PUN/2025 [A] 5.1 It is an admitted fact mentioned in the Assessment Order that Assessee filed Original Return of Income on 07/08/2020 declaring Total Income at Rs.31,48,130/- for A.Y.2020-21. However, subsequently, Assessee revised his income on 23.03.2021. During the scrutiny proceedings, Assessee could not file details, hence, Assessing Officer made following additions. (In Rs.) Total income as per revised return of 25,06,280 income Add: 93,566 Exemption claimed u/s 10(14)(ii) Interest on borrowed capital 2,00,000 Deduction claimed under Ch.VIA 6,69,176 9,62,742 Total taxable Income (after allowing Std. 34,69,022 deduction u/s 16 of Rs.50,000/-)
Ld.AR submitted that the deductions which are appearing in Form No.16 have not been allowed by the AO.
We have verified the Form No.16 which was admittedly filed along with the original return of income, it is noted that total amount of Rs.8,25,728/- was eligible for deduction u/s.80C, 80CCC and 80CCD(1). However, as per Section 80C, the amount needs to be restricted to only Rs.1,50,000/-. Accordingly, in Form No.16 only Rs.1,50,000/- was shown as eligible for deduction u/s.80C of the Act. In these facts, we direct ld.Assessing Officer to allow the 5 & 1810/PUN/2025 [A] Assessee deduction u/s.80C of Rs.1,50,000/- which is appearing in Form No.16. It is also observed from Form No.16 that Assessee was eligible for following exemptions : Amount of any other exemption under section 10 Children Education Allowance 2000 Hostel Subsidy 1,200 Ration Allowance 40,366 Dress Allowance 20,000 Total amount of any other exemption 63,566 under section
Ld.DR for the Revenue has not disputed these facts. Accordingly, we direct ld.AO to allow exemption of Rs.63,566/- u/s.10 of the Act as appearing in Form No.16.
The Assessing Officer has disallowed assessee’s entire claim of deduction of interest on borrowed capital and made an addition of Rs.2 lakhs to total income. However, ld.AR has admitted that Assessee is eligible for interest u/s.24 of Rs.60,353/-. Ld.AR invited our attention to page no.17 which is an Interest Certificate issued by Army Group Insurance Fund, wherein it has been specifically stated interest of Rs.60,353.23 has been paid by Assessee. The said Certificate is scanned and reproduced here as under :
ITA Nos.1809 & 1810/PUN/2025 [A]
In this case, Assessee has paid interest of Rs.60,353/- towards housing loan. Accordingly, the said amount is eligible for deduction under section 24 of the Act. Hence, we direct the ld.AO to allow the deduction of Rs.60,353/-. It is also observed that Assessee is eligible for deduction u/s.80TTA of Rs.3,190/-, accordingly, we direct ld.AO to allow the same.
& 1810/PUN/2025 [A] 10.1 Accordingly, we direct the ld.Assessing Officer to recompute the income of the Assessee.
In the result, appeal of the Assessee is partly allowed.
12. This is an appeal against the order u/s.250 of the Act, dated 04.06.2025 emanating from penalty order u/s.270A of the Act, dated 02.03.2023. Ld.Assessing Officer has levied penalty under section 270A(8) r.w.s 270A(9) of the Act, of Rs.5,77,644/-. Ld.AR has relied on the decision of ITAT Pune Bench in the case of Rajendra Shyamkanth Shivrame Vs. ITO in & 936/PUN/2024 for A.Y.2017-18 & 2018-19 vide order dated 18.02.2025. Hon’ble Judicial Member is signatory to the said order in the case of Rajendra Shyamkanth Shivrame.
The facts of the Assessee’s case are identical to the facts in the case of Rajendra Shyamkanth Shivrame(supra). Therefore, following the binding precedence, we direct the Assessing Officer to delete the penalty levied under section 270A of the Act. Accordingly, grounds of appeal raised by the assessee are allowed.