2015 (8) TMI 692 - AT - Income Tax

Dispute over Income Tax Act deduction rectification dismissed due to e-return discrepancies.

The case involved a dispute regarding the rectification of deduction under section 80-IB of the Income Tax Act, 1961. The Revenue's appeal against the ... Entitlement to deduction claimed by assessee under section 80-IB - Held that:- Assessee while filing the e-return had claimed deduction of ₹ 1 lakh only under Chapter-VI A of the Act. Assessee had profit and gains of ₹ 8,62,93,033/-. Along with salaries and income from other sources, the gross total income of assessee was ₹ 8,98,13,395/-. Against the column for showing deduction under Chapter-VI-A, assessee gave the figure of ₹ 1,00,000/-. However, in the column showing the total income ₹ 5,13,62,429/- was shown. A reading of the print out of the e-return of the assessee clearly show that there was an attempt to mislead the Department. Assessee after working out tax dues, showed taxes paid as ₹ 1,38,84,356/- when the total even as per assessee’s figure itself ought have been more. In such a situation, we cannot say that application for rectification filed by the assessee for granting it deduction of ₹ 8,62,93,033/- under section 80-IB was unjustly rejected by the Assessing Officer. Assessee had preferred no such claim in its return at all. This seems to be the right decision taken by the Assessing Officer. On the other hand, CIT(A) had accepted the claim of assessee going into the merits when the rectification was rejected by the A.O. based on the figures given in the e-return filed by the assessee. In any case, CIT(A) on 16.10.12 realizing his mistake, rectified the earlier appellate order, dismissing the appeal filed by the assessee against the rejection of petition by the Assessing Officer. Thus, as matter stands now, there is no order of the CIT(A) dated 03.08.12 in the eyes of law. Hence appeal filled by the Revenue has become infructuous. Since the Cross Objection of the assessee is only to point out the factum of withdrawal of the earlier order by the CIT(A), it is only a clarification, thus needing no specific adjudication. - Decided against assessee. Issues:1. Rectification of deduction under section 80-IB of the Income Tax Act, 1961.2. Validity of rectification order by the Central Processing Centre.3. Appeal by Revenue against the order of CIT(A).4. Cross Objection by the assessee regarding the cancellation of CIT(A) order.5. Eligibility of the assessee for deduction under section 80-IA.6. Assessment of tax liability based on the e-return filed by the assessee.7. Acceptance of claims by the CIT(A) without being filed in the e-return.Analysis:1. The case involved an appeal and Cross Objection by the Revenue and the assessee, respectively, against the order of CIT(A) dated 03.08.2012. The Revenue's grievance was that the rectification by the Central Processing Centre under section 154 of the Act, granting the assessee a deduction under section 80-IB, was quashed by CIT(A). The assessee pointed out that the order of CIT(A) was subsequently cancelled, rendering the Revenue's appeal infructuous.2. The assessee, while filing the return for the relevant Assessment Year, did not claim any deduction under Chapter-VI-A of the Act. However, a deduction of Rs. 1,00,000 was claimed under Chapter VI-A, and the total income was computed at Rs. 5,13,62,429. The Revenue allowed only the deduction claimed under Chapter-VI, leading the assessee to file a petition under section 154 requesting the grant of deduction under section 80-IB(10), which was rejected by the Assessing Officer.3. The assessee appealed to CIT(A) against the rectification order, where it was held eligible for the deduction under section 80-IA for developing housing projects. The Revenue contended that the assessee did not initially prefer the claim in the e-return filed on 20.09.10, questioning the acceptance of the claim by CIT(A.4. During the hearing, the assessee did not appear, and the Revenue's arguments were considered. The Tribunal observed discrepancies in the e-return filed by the assessee, indicating an attempt to mislead the Department. The Assessing Officer's rejection of the rectification application for the deduction under section 80-IB was deemed justified, as the assessee had not initially claimed such deduction.5. The Tribunal concluded that the CIT(A) had erred in accepting the claim of the assessee, as the rectification was rejected based on the figures in the e-return. The subsequent rectification by CIT(A) on 16.10.12 nullified the earlier order, rendering the Revenue's appeal infructuous. The Cross Objection by the assessee was merely a clarification and required no specific adjudication.6. Ultimately, both the appeal of the Revenue and the Cross Objection of the assessee were dismissed, and the order was pronounced on 7th February 2013 in Chennai.