PRATHVI RAJ,LUCKNOW vs. DCIT, LUCKNOW

The facts of the case are that the assessee, a Doctor by profession, filed his return of income for the year under consideration on 27.06.2009, declaring a total income of Rs.5,36,393/- after claiming deduction of Rs.1,25,366/- towards housing loan interest, Rs.1,00,000/- being deduction under section 80C of the Income Tax Act, 1961 (hereinafter called “the Act’). The assessee also claimed TDS of Rs.63,236/- deducted by the employer. The Assessing Officer processed the return under section 143(1) of the Act without allowing the benefit of TDS of Rs.63,236/- and interest on housing loan of Rs.1,25,366/-. The assessee filed a rectification application under section 154 of the Act before the Assessing Officer with the request to give the benefit of TDS and also allow interest on housing loan. The Assessing Officer, in the rectification order dated 01.05.2023 passed under section 154 of the Act, allowed the benefit of TDS of Rs.63,236/-. However, deduction of interest on housing loan of Rs.1,25,366/- was not given to the assessee, observing that “the assessee did not claim deduction with respect to interest paid on housing loan in the ITR of the year, therefore the same is not allowed”.

Aggrieved, the assessee preferred an appeal before the NFAC. However, the appeal before the NFAC came to be dismissed.

Now, the assessee has approached this Tribunal challenging the action of the NFAC by raising the following grounds of appeal:

None was present on behalf of the assessee when the appeal was called out for hearing nor was any adjournment application received in this regard. However, looking into the facts of the case, I proceed to adjudicate the appeal ex-parte qua the assessee.

The ld. Senior D.R. had no objection to the restoration of appeal to the Assessing Officer (AO).

I have heard Senior Departmental Representative and have also perused the material on record. The claim of the assessee before the authorities below was that the assessee had claimed interest on loan availed by the assessee for construction of self-occupied house, in the return of income, however, the authorities below have not allowed the claim of the assessee. Looking into the facts of this case, I am of the considered view that the assessee deserves one more opportunity to present his case and, therefore, in the interest of substantial justice, I restore this file to the Office of the Assessing Officer with the direction to allow the claim of deduction of interest on loan, if it is claimed by the assessee in the return of income. I also caution the assessee to fully comply with the directions of the Assessing Officer in the set-aside proceedings when called upon to do so, failing which, the Assessing Officer shall be at complete liberty to pass the order in accordance with law, based on material available on record even if it is ex-parte qua the assessee.

In the result, appeal filed by the assessee stands allowed for statistical purposes.