RAJESH KUMAR GUPTA,NEW DELHI vs. DCIT, CC-14, NEW DELHI

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ITA 9309/DEL/2019Status: DisposedITAT Delhi19 June 2023AY 2017-184 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 held that the adjustment made by the CPC under Section 143(1) was not permissible as it involved a debatable issue regarding exemption under Section 10(10D). The adjustment could not be made without considering the assessee's objections at the initial stage.

What were the facts?

The assessee claimed an exemption of Rs. 59,37,500/- on maturity of an insurance policy under Section 10(10D). The CPC made an addition of Rs. 59,27,580/- for the difference between returned income and income as per 26AS without considering the assessee's objections.

What were the issues?

Whether an addition for a difference between returned income and 26AS, claimed as exempt income under Section 10(10D), can be made during the processing of return under Section 143(1) without considering the assessee's objections.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 10(10D)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘H’, NEW DELHI

Before: SH. SAKTIJIT DEY & SH. N. K. BILLAIYA

For Appellant: CA Sh. J.P. Sharma, CA
Hearing: 15/06/2023Pronounced: 19/06/2023

PER N. K. BILLAIYA, AM:

1.

This appeal by the assessee is preferred against the order of the CIT(A)-26, New Delhi dated 28.10.2019 pertaining to A.Y. 2017-18.

2.

The grievance of the assessee read as under:- 1. That under the fact & circumstance, Ld. A.O. at CPC grossly erred in law as well as on merits in making addition / adjustment of Rs.59,27,580/- on the ground of difference between the returned

income and income as per 26AS, on which ground no adjustment could had been made u/s. 143(1) as there existed a reasonable cause for such difference being Rs.59,37,500/-, claimed by assessee as exempted income u/s.10(10D) being receipt on maturity of insurance policy with LIC of India.

1.1 That the addition made by the CPC is outside the scope of asstt. u/s. 143(1) as the same is claimed as exempted u/s,10(10D) and the Ld. A.O. CPC erred in law in making the said addition without considering and adjudicating the objection raised by the assessee against the said adjustment at the stage when the said adjustment was proposed by CPC.

2. That, without prejudice, under the facts and circumstances the claim of exemption u/s.10(10D) for Rs.59,37,500/- is fully eligible even on merits, hence the Ld. CIT(A) erred in law and on merits in giving relief only for Rs. 15,08,490/- being the amount of the premium of the policy paid by the assessee himself, thus erred in sustaining the addition to the extent of Rs.44,19,090/- (59,27,580-15,08,490).

3.

At the very outset the Counsel for the assessee stated that the impugned issue has been decided in favour of the assessee and against the revenue by the coordinate Bench in the case of the brothers of the assessee. The Counsel supplied the copies of the judgment.

4.

Per contra the DR could not bring any distinguishing decision in favour of the revenue.

5.

We have carefully considered the orders of the authorities below. The main quarrel is whether the impugned adjustment can be made while processing return u/s. 143 (1) of the Act. We find that the coordinate Bench in order dated 13.10.2022 at the occasion a similar grievance in the case of the brother of the assessee wherein it was held as under :- 6. Against this order, assessee is in appeal before us. We have heard both the parties and perused the record. 7. Ld. Counsel of the assessee submitted that CPC has been wrong in making the addition in processing u/s 143(1) of the Act. Ld. Counsel of the assessee further submitted that in identical circumstances in the case of brother of the assessee i.e. Ganesh Chand Gupta, ITAT in ITA No.9324/Del/2019 vide order dated 03.08.2022 has directed for the deletion of the addition. 8. Per contra ld. DR for the Revenue did not dispute the proposition that in the identical circumstances, ITAT deleted the addition. 9. Upon carefully consideration, we note that ITAT in the aforesaid order has deleted the addition by holding as under :- “7. When the processing by CPC needs improvement by Id. CIT (A) by referring to sub-section of the main section, by no stretch of imagination, it can be said that it was prima facie adjustment and that there could not have been any debate on the issue raised and adjustment done. The CPC processing is a bland one and without assigning any reason leave alone legal reasoning.

8.

Hence, in our considered opinion, the adjustment could not have been done by CPC processing u/s 143(1). Therefore, we set aside the order of authorities below and decide the issue in favour of the assessee.

9.

In the result, assessee’s appeal stands allowed.”

10.

We find that the aforesaid order is fully applicable in the facts and circumstances of the case as they are identical. It is also not the case that Hon’ble jurisdictional High Court has reversed the order of ITAT. Accordingly, respectfully following the aforesaid decision, we hold that the adjustment could not have been done under CPC proceedings u/s 143(1). Therefore, following the aforesaid precedent, we set aside the orders of the authorities below and decide the issue in favour of the assessee. 11. In the result, the appeal of the assessee stands allowed. 6. Similar view was taken by the coordinate Bench in the case of brother of the assessee in ITA No.9307/Del/2019. Respectfully following the decision of the coordinate Bench we direct the AO to delete the impugned disallowance. The appeal of the assessee is allowed. Order pronounced in the open court on 19.06.2023.

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