BYRAPPAREDDY SRIKANTH ,TIRUPATI vs. ITO , CHENNAI

656 & 658/Chny/2022 “5. As the assessee failed to comply with all the terms of the notice issued under sub-section (1) of the Act section 142 and also to the terms of notice issued u/s. 143(2), the assessment is completed ex-parte u/s. 144 of the Act. The assessment is completed disallowing the 80JJA deduction claimed. Computation of total income Returned income NIL Assessed Income Rs.49,63,600 Aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the ld.CIT(A)-16, Chennai.

During the appellate proceedings before the ld.CIT(A) the assessee stated that he has collected bio-degradable waste like Bengali gram, Castrol, channa husk, coir waste, groundnut husk, rice husk, paddy husk, poultry waste, sun flower husk, sunflower waste, wood dust, wood husk, corn waste and bagasse and processed and treated with a specific calorific value for using it in power generation. This process does not require the plant and machinery and majority of the cases, these processes are carried out physically with the human intervention and the output is dried up in the open space by exposing to sun light. Further, the assessee explain that the whole process is eco-friendly and contributing to the man kind by avoiding carbon emissions and addressing the much talked about the serious climate change issues. Further, the assessee 656 & 658/Chny/2022 explained the process of making bio-degradable fuel as separation, collection, logistics, drying, cleaning, chopping and shredding, saw milling, chipping and fuel mixing. By following above process, the assessee is converting bio-waste into useful energy source and hence, eligible for deduction u/s. 80JJA of the Act. Further, the assessee stated that he had satisfied all the conditions mentioned in section 80JJA of the Act and accordingly eligible to claim deduction u/s. 80JJA of the Act beyond any doubt. Therefore, the assessee pleaded for setting aside the order of the Assessing Officer by deleting the denial of deduction u/s. 80JJA of the Act. However, the ld.CIT(A) was not convinced with the submissions made by the assessee and hence, confirmed the addition made by the Assessing Officer by holding as under: “6.3 I have considered the matter. It is seen that in course of assessment proceeding, no documentary evidences in support of claim of deduction was filed before the AO. Even in course of appeal proceeding, no single shred of documentary evidence was filed in support of claim of deduction. In the written submission, the appellant narrated the processes involved in his alleged undertaking and why the same was eligible for deduction u/s 80JJA. But the fact is that no single paper evidencing the actual process being carried out by assessee has been furnished. Mr. Naveen, the accountant who attended the hearing stated that the premises of assessee was totally gutted by fire sometime in 2014. He was also took pain to explain about the tax paying capacity of assessee. All taken, but the fact has to be seen from record. Assessee had claimed deduction of Rs.49,63,600/- under section 80JJA. To earn that much of profit there had to be substantial turnover. The turnover must have exceeded Rs.60 lakh 656 & 658/Chny/2022 and assessee should have been liable for tax audit also. It is not credible that each and every piece of paper regarding carrying of business eligible for deduction under section 80JJA had been wiped out by fire at the premises. It is, not credible that no piece of record regarding business was available at residential premises of assessee which was not affected by fire; At least some banking documents should also have be there evidencing transactions allegedly carried out. Due to complete dearth of evidence, the claim of assessee, I am afraid, cannot be entertained. 6.3.1 In one part of the submission, the assessee requested that the matter should be remanded to the AO. This request could have been entertained had some new evidences which could not be filed before the AO were furnished before me. But as no evidences regarding allowability of deduction under section 80JJA had been furnished, the request is rejected and ground is dismissed.”

At the time of hearing, none appeared for the assessee.

Per contra, the ld.Sr.DR, stated that since the assessee has not shown any kind of plant and machinery and other evidences to show that the conditions prescribed u/s. 80JJA of the Act has been followed to claim the deduction and hence, the appeal of the may please be dismissed.

We heard the ld.Sr.DR and gone through the orders of the lower authorities. We note that the orders for the 656 & 658/Chny/2022 assessment years 2012-13 and 2013-14 have been passed by disallowing the claim of deduction u/s.80JJA of the Act by the Assessing Officer without the participation of the assessee in the assessment proceedings. The ld.CIT(A) also dismissed the appeal of the assessee by confirming the orders of the Assessing Officer for the assessment year 2012-13, without calling for a remand report from the Assessing Officer based on the submissions made by the assessee. Further for the assessment year 2013-14, the ld.CIT(A) has deleted the disallowance of the expendituremade by the Assessing Officer and confirmed the denial of deduction u/s.80JJA of the Act, which has been claimed by the assessee, without calling for a remand report from the Assessing Officer as sought by the assessee. Since, the assessee’s claim for verification of documents, evidences in support of the claim of deduction u/s.80JJA by the AO has not been considered in the appellate proceedings and confirmed the disallowance of deduction u/s.80JJA of the Act for the both the Assessment years, we deem it fit to remit the issue back to the file of the Assessing Officer for fresh adjudication by setting aside the orders of the ld.CIT(A) for the assessment years 2012-13 and 2013-14. In the interest of natural justice and fair play, we direct the 656 & 658/Chny/2022 Assessing Officer to give an opportunity to the assessee to furnish all the details, documents and evidence before adjudication. Needless to say, assessee to be diligent and file written submissions and relevant documents if advised so.

In the result, appeals filed by the assessee for both the assessment years are allowed for statistical purposes.