TaxTMI 
TaxTMI 
2022 (8) TMI 509
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....tion Application dated 15.02.2020 filed under section 154 of the Income Tax Act 1961 vide Impugned Order dated 19.02.2020. 2. That the Ld. C.I.T.(A), National Faceless Appeal Centre Delhi has erred in law and on facts in sustaining the Order passed by the Ld. A.O. CPC Bangalore for rejecting the request for rectification under section 154 of the Income Tax Act, 1961 of the appellant, without giving any valid reasons for rejection, therefore the impugned order is invalid and liable to be quashed and application under section 154 of the Income Tax Act, 1961 is liable to be allowed. 3. That the Ld. C.I.T.(A), National Faceless Appeal Centre Delhi has erred in law and on facts in sustaining the Order passed by the Ld. A.O. CPC Bangalore for rejecting the request for rectification under section 154 of the Income Tax Act, 1961 of the appellant vide Order dated 19.02.2020 in respect of claim of deduction under section 50IB of the Income Tax Act, 1961 amounting to Rs.6,48,423/- under chapter VI-A, therefore, without giving any valid reasons for rejection, therefore the impugned order is invalid and liable to be quashed and application under section 154 of the income Tax A....
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....High Court of Karnataka in the case of ITO vs. Smt. Mandira D Vakharia decided similar issue in favour of assessee and copy of which was referred to be placed in P.B. pgs. 85 to 87. Therefore, in view of these facts and circumstances, it was submitted that the appeals filed by the assessee may be allowed. 3. The ld. DR, on the other hand supported the orders of authorities below and invited our attention to the findings of ld. CIT(A), wherein he has categorically held that since the copy of audit report was not available when the CPC passed order u/s. 143(1), therefore, it could not be said that there was a mistake apparent from record and hence, ld. CIT(A) has rightly dismissed the appeals of the assessee. 4. I have heard the rival parties and have perused the material available on record. I find that it is undisputed fact that the claim of the assessee u/s. 80IB has not been allowed by the authorities below only because of the reason that the audit report in Form-10CCB was not filed along with return of income and was only filed after receipt of intimation u/s. 143(1) and therefore, the assessee filed rectification applications u/s. 154 of the Act after uploading Form-10CCB....
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....rity declined to rectify its earlier order on the ground that the assessee was required to file the proof or certificate in support of the deduction claimed under sections 80HHE and 80GG al the time of filing of the return and the proof or certificate filed by her with a rectification application could not be taken into consideration. 5. The assessee, being aggrieved by the order of the assessing authority, filed an appeal before the Commissioner (Appeals), which was accepted and held that non-filing of the proof of certificate from the chartered accountant with the original return was not fatal to the claim made by the assessee. That the proof could be furnished later on with the rectification application. The assessing authority should have taken into consideration the proof furnished by the assessee with the rectification application while considering the claim of the assessee for deduction under sections 80HHE, and 80GG of the Act. The Commissioner (Appeals) allowed the claim of the assessee in full. 6. Aggrieved by the order of the Commissioner (Appeals), the revenue filed further appeal before the Tribunal which has been dismissed by the impugned order. The ....
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.... pursuance of the non-statutory guidance notes for filing in the return of income, is not so filed." [Emphasis supplied] 8. By the Board's circular, it has been made clear that if audit report specified under section 80HHC(4) is not furnished with the return, then the deduction may be disallowed as a prima facie adjustment, But, if evidence is subsequently furnished, rectification under section 154 should be carried out to the extent permitted by ihe Board's Circular No. 669 dated 25-10- 1993. The circular then proceeds to mention some other provisions in regard to the non-filing of the audit report or other evidence along with the return of income as required under various sections such as 12A(fc), 33AB(2), 35E(2), 35E(6), 43B (First proviso), 80-1(7), SO-IA(R) and the like. The case of the revenue is that since sections 80I1HF, and SOGG are not specifically mentioned in the Board's circular, the assessee would not be entitled to the benefit of deductions under sections ROI1HE and SOGG on the furnishing of the audit report proof with the rectification application. 9. Submission is without any substance. The intention of the Board is clear. The illustr....
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....7. In the result, both the appeals of the assessee are allowed. (Order pronounced in the open court on 25/05/2022) ============= Document 1 CIRCULAR NO. 689, SCOPE OF PRIMA FACIE DISALLOWANCES UNDER SECTION 143(1)(A) CIRCULAR NO. 689, DATED 24-8-1994 Section 143(1)(a) authorises, with effect from assessment year 1989-90, inter alia, disallowance of any loss carried forward, deduction, allowance or relief claimed which, on the basis of information available in the return or the accompanying accounts or documents, is prima facie inadmissible. The earlier instructions of the Board were to the effect that no disallowance should be made of items on which two opinions are possible. The matter has been further considered by the Board in the light of the recommendations of the Tax Reforms Committee headed by Prof. Raja J. Chelliah and it has been decided that prima facie disallowance shall be made only in respect of the following types of claims: (a) an incorrect claim, if such incorrect claim is apparent from the existence of other information in the return or the accompanying accounts or documents. EXAMPLEHENCE If a deduction has been claime....
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....uch contribution in the return or the accompanying accounts or documents. (d) Any claim which is patently inadmissible in law. EXAMPLE Deduction of items like income-tax, wealth-tax, personal expenses, depreciation claimed on conveyance under the head salary, depreciation claimed under the head house property and the like. The items of disallowance should be such that no two opinions are possible on their inadmissibility. 3. The Board desires that no other prima facie disallowance should be made except with the previous approval of the Commissioner of Income-tax who will, after according approval in suitable cases, bring the same to the notice of the Board. 4. The above procedure applies to all returns pending processing under section 143(1) on the date of issue of this Circular. CLARIFICATION ONE Section 143 relating to assessments has been substituted with effect from 1st April, 1989 by a new section by the Direct Tax Laws (Amendment) Act, 1987 (hereinafter referred to as the Amendment Act.) 2. Clause (a) of sub-section (I) of the substituted section provides that where a return has been made under section 142(1) of the Act, and any ta....
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....loss of the assessee under section 143(3) of the Act. In cases where action under section 143(2) of the Act is not taken within the time limit laid down on this behalf the Assessing Officer will have take action under section 147 of the Act. 6. It has also to be noted that for purposes of making the adjustments under the aforesaid proviso, it will not be permissible to refer to the record of past assessments in the case of the assessee. For instance, it will not be permissible for the Assessing Officer to make an addition to the profits by applying a higher rate of gross profit than that shown in the books, even though in an assessment for an earlier year the profits so estimated ave been confirmed in appeal. Similarly it will not be permissible for the Assessing Officer to disallo01 laim in respect of interest on loans even though the amounts on which interest is claimed to have been paid had been added to the assessees income as unexplained cash credits in the assessment for an earlier year. Again the Assessing Officer will not be able to make any disallowance in respect of estimated expenses attributable to personal use of motor car, telephone....