The Income Tax Appellate Tribunal (ITAT) Delhi Bench held that benefit allowed assessment orders should not be withdrawn by exercising power under Section 154 of Income Tax Act, 1961.
The assessee Sanjay Kumar, filed the appeal against the order passed by the Commissioner of Income Tax (Appeals) for the assessment year 2019-20, arising out of the rectification order under Section 154 of the Income-Tax Act.
The facts leading to filing the appeal was, disallowance made on account of EPF and ESI by AO by passing under Section 154 of the Income Tax Act. AO was already allowed the benefit on framing assessment under section 143(1) of Income Tax Act .
When the appeal was filed before the Commissioner of Income Tax (Appeals){CIT(A)}, the assessee claimed that it was beyond the jurisdiction and powers under Section 154 of the Income Tax Act to make an addition for which expenditure was allowed in assessment under section 143(1) of the Income Tax Act.
M.R. Sahu, counsel for the assessee before the tribunal, relied upon the decision of Madhya Pradesh High Court in the case of CIT Vs. Mahavir Drilling Co. submitted that any benefit granted could not be withdrawn by taking recourse to Section 154 Income Tax Act.
Yogesh Nair, counsel for revenue, supported the orders of tax authorities below and decision of the Supreme Court in Checkmate Services Pvt. Ltd.
The tribunal during the proceedings observed that AO had accepted the return filed under Section 139 of the Income Tax Act vide intimation under Section 143(1) of the Income Tax Act.
Thus, the question of delay in deposit of the employees’ contribution was included in the assessment records upon which the intimation under Section 143(1) Income Tax Act was served upon the assessee.
After reviewing the facts and submissions, the two member bench of the tribunal comprising Anil Chaturvedi (Accountant Member) and Anubhav Sharma (Judicial Member) held that benefits allowed in the assessment order should not be withdrawn by exercising power under Section 154 of Income Tax Act, 1961.
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