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Facts
The assessee, a private limited company manufacturing black tea, claimed deductions under Section 80IE for Assessment Years 2020-21 and 2021-22. However, the Tax Audit Report (Form 10CCB) supporting these claims inadvertently mentioned A.Y. 2017-18 instead of the correct assessment years. Consequently, the CPC made prima-facie adjustments under Section 143(1)(a) denying the deductions, which was upheld by the CIT(A).
Held
The Tribunal set aside the CIT(A)'s order and remitted the matter back to the CIT(A) for fresh adjudication. The assessee is instructed to submit the correct Audit Reports and a certificate from the Tax Auditor explaining the error. The CIT(A) is directed to decide the case on merits in accordance with the law after providing the assessee a fair hearing, and the appeals were allowed for statistical purposes.
Key Issues
Denial of deduction under Section 80IE due to the filing of a Tax Audit Report (Form 10CCB) reflecting an incorrect assessment year, leading to a prima-facie adjustment under Section 143(1)(a).
Sections Cited
Section 250, Section 143(1)(a), Section 139(1), Section 80IE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, GUWAHATI BENCH, GUWAHATI
Before: DR.MANISH BORAD & SHRI MANOMOHAN DAS
Assessee by: None Department by: Shri Kausik Ray, JCIT Date of hearing: 26.11.2024 Date of Pronouncement: 20.01.2025 आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
The captioned appeals pertaining to Assessment Years 2020-21 and 2021-22 at the instance of assessee are directed against the separate orders dated 24.02.2024 passed by Addl/JCIT(A)-13, Mumbai passed u/s.250 of the Income-tax Act, 1961 (in short ‘the Act’) which in turn are Dhurjyoti Tea Company Pvt. Ltd. arising out of respective Intimation orders passed u/s.143(1)(a) of the Act.
Facts in brief common to both the appeals are that the assessee is a Private Limited company engaged in the manufacturing of black Tea. The assessee filed the return of income u/s.139(1) of the Act disclosing total income of Rs.2,02,950/- for the A.Y. 2020-21 and Rs.9,66,070/- for the A.Y. 2021-22 after claiming deduction u/s.80IE at Rs.1,35,40,282/- and Rs.6,81,69,045/- respectively, filing the Tax Audit Report in Form 10CCB on 30.08.2022 and 12.03.2022 but however reflected the assessment year 2017- 18. The CPC vide orders u/s.143(1)(a) processed the returns denying the deduction claimed by the assessee u/s.80IE of the Act on the ground the assessee has filed the Audit Report for the A.Y. 2017-18 and not for the A.Yrs. 2020-21 and 2021-22, thereby making the prima-facie adjustment of the amounts claimed by it.
Aggrieved assessee filed appeal(s) before the ld.CIT(A) and the ld.CIT(A) confirmed the action of the CPC for both the years. Finding of ld.CIT(A) is similar for both the years under appeal and the same is reproduced below : Dhurjyoti Tea Company Pvt. Ltd. “5.4.6 On going through the same, it is noted that the Hon'ble Courts are very clear in its decision that the audit report should be filed at any time before the framing of the assessment. In the instant case, the assessment has been made under the provision of section 143(1) of the Act and before the passing the order u/s 143(1) of the Act, the CPC had audit report for A.Y. 2017-18 and not for the relevant assessment year i.e. for A.Y. 2020-21. The appellant has uploaded audit report in form 10CCB for A.Y. 2017- 18 which is misrepresentation of fact. Knowing very well that this audit report is not valid, implying that effectively no audit report has been filed by the appellant before the passing of order of intimation u/s 143(1). With regard to the contention of the appellant that no opportunity was provided before making the said adjustment, this argument has been quelled as during the course of appellate proceedings, the appellant has been provided multiple opportunities to substantiate its claim with documentary evidence however the fact remains the same.”
Now the assessee is in appeal before the Tribunal challenging the impugned order.
When the appeals were called for, none appeared on behalf of the assessee despite due service of notice of hearing. We therefore proceed to dispose of the appeals with the able assistance from the ld. Departmental Representative exparte qua the assessee.
We have heard the ld. Departmental Representative and perused the record placed before us. We find the common issue in both these appeals is that the assessee has been denied the benefit of section 80IE of the Act on account of Dhurjyoti Tea Company Pvt. Ltd. filing wrong Audit Report. The CPC observed that for the impugned assessment years, the Audit Reports were for the A.Y. 2017-18 whereas the claim has been made for the A.Yrs. 2020-21 and 2021-22. The contention of the assessee is two fold; firstly, the CPC erred in making adjustment and secondly, the assessee has been consistently claiming 80IE deduction from A.Y. 2017-18 and has said deduction been allowed by the Department in the past.
The facts emerging from the impugned orders is that the assessee did not file the correct Audit Report even when sufficient opportunity was provided by the CIT(A). As far as intimation u/s.143(1)(a) of the Act is concerned, the CPC had made prima-facie adjustment based on the wrong Audit Report and observations of the Tax Auditor. Though the assesee is claiming that no prior intimation was given but the same is not supported by any credible evidence. Even otherwise, processing of returns under CPC is monitored through the programme device in the computer system and it works on that basis itself. We note that the assessee has obtained the Audit Report in Form No.10CCB for claiming deduction u/s.80IE of the Act. It is also claimed that due to inadvertent mistake, the assessment year was not changed. Dhurjyoti Tea Company Pvt. Ltd. We therefore in the facts and circumstances of the instant case and in the interest of justice, deem it proper that assessee deserves an opportunity of hearing. Finding of ld.CIT(A) is set-aside for both the years under appeal and issues on merit are remitted to the file of ld.CIT(A). Assessee is directed to file necessary details along with the correct Audit Report and certificate of the Tax Auditor for having committed the mistake. If the claim of the assessee is found to be correct supported by Audit Report in correct form, then ld. CIT(A) shall decide in accordance with law after affording reasonable of hearing to the assessee. Effective grounds of appeal raised by the assessee for the years under appeal are allowed for statistical purposes.
In the result, both the appeals of the assessee are allowed for statistical purposes.