The Delhi Bench of Income Tax Appellate Tribunal (ITAT) held that deduction under Section 80JJAA of the Income Tax Act requires examination of quantum as well as fulfillment of various condition as stipulated in the said beneficiary provision, thus restored the matter to the files of Assessing Officer(AO).
The assessee in the present case is Jaquar and Company P. Ltd., not being satisfied with the assessment order filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] which disallowed the further deduction of Rs. 76,28,552/- under Section 80JJAA of the Income Tax Act,1961 as claimed by the assessee.
Further aggrieved the assessee filed an appeal before the Tribunal.
The Authorised Representative of the assessee submitted that Section 80JJAA of the Income Tax Act, requires examination of fulfillment of various conditions as stipulated in that section and therefore, it cannot be allowed under Section 143(1) of the Income Tax Act. The AR pointed out that the CIT(A) has erred in law and on facts in not allowing further deduction of Rs. 76,28,552/- under Section 80JJAA of the Income Tax Act as claimed by the assessee for the first time CIT(A).
The Departmental Representative (DR) submitted that the amount claimed by the assessee under Section 80JJAA of the Income Tax Act, in the return of income has been allowed to the assessee and the assessee is seeking to allow additional deduction of Rs. 76,28,552/without claiming the same in the return of income which is not permissible. Therefore the CIT(A) was right in dismissing the claim of assessee by holding that the deduction under Section 80JJAA of the Income Tax Act requires examination of fulfillment of various conditions as stipulated in the section and the same cannot be allowed under Section 143(1) of the Income Tax Act.
In the rejoinder the assessee submitted that once additional ground has been admitted and has not been rejected and the first appeal is in continuation of assessment proceedings and when the power of CIT(A) being coterminus with the AO then the first appellate authority cannot be held as justified in denying the claim of assessee to allow further deduction of Rs. 76,28,552/- under Section 80JJAA of the Income Tax Act.
The Bench comprising of Chandra Mohan Garg, Judicial Member and Dr. B.R.R. Kumar, Accountant Member observed undisputedly rather admittedly the assessee did not claimed the said additional amount neither in its return of income nor in the form 35 while filing appeal before CIT(A).
It was also noted that any fresh claim of allowability of additional deduction under Section 80JJAA of the Income Tax Act requires examination of fulfillment of various conditions as stipulated in the said section and thus the same cannot be allowed under Section 143(1) of the Income Tax Act.
Therefore, it was held that the fulfillment of requirement for making a claim of exemption under the relevant sections of Chapter III of the Income Tax act in the return of income is mandatory, but, when it comes to the claim of a deduction, inter alia, under the relevant section of Chapter VI-A of the Income Tax Act, such requirement become directory.
Accordingly it was held that the assessee is entitled to make additional claim of deduction under Section 80JJAA of the Income Tax Act even though the same was not included while filing return of income. Our conclusion gets strong support from the order of ITAT Delhi Bench in the case of DCIT vs. Synergy Waste Management P. Ltd.
Hence in agreement with the observations with the CIT(A) it was held that any fresh claim of allowability of additional deduction under Section 80JJAA of the Income Tax Act requires examination of quantum as well as fulfillment of various condition as stipulated in the said beneficiary provision therefore the issue is restored to the file of AO for limited purpose that is examination of quantum as well as fulfillment of conditions regarding allowability of the additional claim prescribed in the said provision as the AO had no opportunity to examine the same during assessment proceedings.
Hence, the appeal of the assessee was allowed for statistical purposes.
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