The Income Tax Appellate Tribunal ( ITAT ), Kolkata Bench, has recently, in an appeal filed before it, held that income tax deduction claim u/s 80IA cannot be denied for vague and ambiguous reasons.
The aforesaid observation was made by the Kolkata ITAT, when an appeal was preferred before it by the assessee Harbauer (India) Pvt. Ltd., as against the order dated 22.09.2021, of the National Faceless Appeal Centre [CIT(A)], passed under section 250 of the Income Tax Act.
The ground of the assessee’s appeal is that on the facts and in the circumstances of the case and in law, the CIT(Appeals) grossly erred in upholding the disallowance under section 80-IA of the Income Tax Act, merely on the basis of procedural error even after accepting the eligibility of the Assessee to claim a deduction in its revised return of income, it was submitted by Shri Anuj Musaddi, CA, the counsel for the assessee, that the return of the assessee was processed u/s 143(1) of the Income Tax Act, but that the claim of the assessee u/s 80IA has been denied on vague averments pointing out that in Schedule VI-A under Part-C deduction in respect of certain incomes, in Sl No.2.e, the deduction is claimed under section 80IA/Form 10CCB or Form 10 CCB has not been e-filed within the due date.
The counsel for the assessee has further invited the ITAT Bench’s attention to the impugned order of the CIT(A) to submit that it was demonstrated before the CIT(A), that the assessee had duly made a claim of 80IA in the return of income, that the corresponding schedule etc. were duly filled, and further that Form 10CCB was duly e-filed along with the return of income within the due date, he submitted that it so happened that still the CIT(A) rejected the appeal of the assessee only on the vague reason that the assessee might not have filled the columns of corresponding schedule u/s 80IA or might not have e-filed the Form 10CCB within the due date.
The counsel for the assessee added that the CIT(A) had only held that the filing of Form 10CCB only will not help the assessee, if the deduction has not been claimed by properly filling up the required schedule as discussed above, but that it has not been pointed out by the CIT(A) as to what was the error in filling up the schedule etc.
He pointed out that, in fact, the reasons pointed out by the CPC as well as reasons given by the CIT(A) are vague and ambiguous, as it is neither the case of the Assessing Officer nor of the CIT(A) that the assessee is not entitled to claim deduction u/s 80IA of the Income Tax Act.
The Counsel for the assessee has further submitted that the CPC has denied the claim only on the basis of vague and ambiguous reasons, while it has been held time and again by the courts of law that the Income Tax Authorities must charge the legitimate taxes from the taxpayers, he added that if an assessee is entitled to certain deductions under the provisions of the Income Tax Act, the same should not be disallowed, merely because of any bona fide mistake or error on the part of the taxpayer, rather, the Income Tax Authorities should assist the concerned assessees in filing their correct returns of income.
However, on the other hand, Smt. Ranu Biswas, the Addl. CIT-DR, who appeared on behalf of the Revenue, strongly relied upon the orders of the authorities below.
Hearing the opposing contentions of either side and thereby perusing the materials available on record, the ITAT Panel comprising of Dr Manish Borad, the Accountant Member, along with Sanjay Garg, the Judicial Member, held:
“In view of this, the action of the lower authorities in denying the deduction u/s 80IA of the Act to the assessee cannot be held to be justified. The impugned order of the CIT(A) is set aside and the Assessing Officer is directed to allow the deduction claimed by the assessee u/s 80IA of the Act. In the result, the appeal of the assessee stands allowed.”
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