Excess Depreciation Claim cannot Vitiate the benefit of Reduced Tax Rate u/s 115BAA: ITAT [Read Order]

The Income Tax Appellate Tribunal ( ITAT ), Kolkata Bench, has recently while deciding an appeal filed before it, held that excess depreciation claim cannot vitiate the benefit of reduced tax rate u/s 115BAA.

The aforesaid observation was made by the Kolkata ITAT, when an appeal was filed before it, by the appellant Techna Infrastructure Pvt. Limited, as against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi on 28.10.2021, passed in the Assessment Year 2020-21.

With Shri A.K. Tibrewal, FCA, the Counsel for the assessee, submitting that the assessee had filed its return of income under section 139(1) of the Income Tax Act, and that the return was processed by the CPC, Bangalore under section 143(1) on 29.03.2021, it was added by the counsel for the assesse that the CPC did not approve the reduced rate of taxes applicable upon the assessee under section 115BAA of the Income Tax Act.

With the Counsel for the assessee further submitting that, against this order dated 29.03.2021, passed under section 143(1) of the Act, the assessee had filed an application under section 154 of the Income Tax Act as well as an appeal before the CIT(Appeals), the same was opposed against by Shri P.P. Barman, Addl. CIT, on behalf of the Revenue, who relied upon the orders of the department authorities.

Hearing the opposing contentions of both the sides and perusing the materials available on record, the ITAT Bench consisting of Rajesh Kumar, the Accountant Member, along with Rajpal Yadav, the Accountant Member Vice-President (KZ), observed as follows:

“With the assistance of the ld. Representatives, we have gone though the record carefully. Since the ld. Assessing Officer has already decided the issue with regard to the applicability of rate of tax, no further dispute remains pending with the ld. CIT(Appeals). In case, ld. CIT(Appeals) wanted to change the colour of litigation or character of litigation by making an observation for disallowance of reduced rate of taxation on account of excess claim of depreciation, then specific notice for enhancement of assessment of income ought to have been given, which ld. CIT(Appeals) failed to give.”

“In these given circumstances, we allow this appeal and vacate the finding of the ld. CIT(Appeals). It is to be treated that the appeal of the assessee ought to have been rendered as redundant or infructuous instead of making any observation. Thus the appeal of assessee before ld. CIT(Appeals) would be treated as dismissed being infructuous. Any observation made by ld. CIT(Appeals) stands vacated.”, allowing the assessee’s appeal the ITAT Bench held.

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