TaxTMI 
TaxTMI 
2025 (9) TMI 716
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....s. It undertakes irrigation projects by entering into agreements with state government authorities or statutory bodies created by state government authorities. For AY 2018-19, it filed its return of income on 30.10.2018 declaring total income of Rs. 12,11,25,450/-. Subsequently, the assessee filed revised return of income on 31.03.2019 declaring total income at Rs. 5,22,07,920/- and claiming refund of Rs. 1,73,04,360/-. It also filed Form 10CCB and Form 10DA along with the revised ROI on 31.03.2019. The return was processed by the Centralized Processing Center ("CPC") u/s 143(1) of the Income Tax Act, 1961 (the "Act") vide intimation order dated 04.11.2019 at total income at Rs. 11,63,23,680/- and determining a refund of Rs. 18,45,612/- interalia disallowing the claim of deduction under section 80IA of the Act for the reason that Form 10CCB was not filed within the due date. The assessee being aggrieved by the said intimation order, filed an application for rectification u/s 154 of the Act before the Ld. Jurisdictional Assessing Officer ("JAO"). Subsequently, the case of the assessee was selected for scrutiny under CASS, amongst others for the reason - (a) Reason for revising the r....
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....at Rs. 11,68,26,650 as per assessment order dated 08.03.2023, the relevant extract of which is reproduced below: "06. Findings of the AO in response to the submission para a to d summarised in Para 5 above 6.1 It is stated that similar wording of assessment order AY 2017-18 and AY 2018-19 and similar claim of 80IA was accepted during AY 2017-18 cannot be an acceptable premise as mentioned in the assessee's submission that wordings of the assessment order "examined & perused conclusively means that FAO accepted Assessee's claim of 80IA. 6.2 Assessee's stated that FAO either would have accepted both the claim of 80IA and 80JJAA or rejected it, and since in the computation, it is seen that 80JJAA is allowed and 80IA is disallowed is absurd. In response, it is stated that even then it cannot be conclusively said, as per the readings of the assessment order, that FAO have accepted the claim of the assessee, as it can be an opposite scenario as well, that AO rejected both claims and erroneously computed it based on assessed income u/s 143(1) of IT Act 1961. Thus, on this premise, it is stated based on judgement of Hon'ble Supreme Court - T.S. Balara....
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.... as defined in the Explanation below sub-section (2) of section 288, and the assessee furnishes, along with his return of income, the report of such audit in the prescribed form duly signed and verified by such accountant." However it is to be noted that when section 80IA of IT act is read with Section 80AC of the Income Tax Act, time limitation of the claiming the aforesaid deduction become clearer, as section 80AC of IT Act elaborates that no deduction would be admissible under sections 80IA, section 80IAB, section 80IB, section 80IC, section 80ID or section 80IE, unless the return of income by the assessee is furnished on or before the due date specified under Section 139(1). Exact wordings of the Act is reproduced here for ready reference: 25. For section 80AC of the Income-tax Act, the following section shall be substituted, namely:- 80AC. Deduction not to be allowed unless return furnished-Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after - (i) the 1st day of April, 2006 but before the 1st day of April, 2018, any deduction is admissible under section 80-IA or secti....
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....3 and 03.07.2023 passed under section 143(3) and section 154 of the Act respectively. Before the Ld. CIT(A), the assessee filed detailed submissions. The Ld. CIT(A) disallowed the claim of deduction under section 80IA of the Act in the appeal filed against section 143(3) order, by observing as under : "Ground 03: In this ground of appeal the appellant objected the addition made by the Assessing Officer (CPC) is Rs. 5,80,64,205/- towards disallowance of 80IA for the A.Y. 2018-19. The contention of the appellant has been considered. I have gone through the facts and found that the AO passed the rectification order u/s 154 r.w.s. 143(3) dated 03.07.2023 and relevant extract as under:- 06. Findings of the AO in response to the submission para a to d summarised in Para 5 above 6.1 It is stated that similar wording of assessment order AY 2017-18 and AY 2018-19 and similar claim of 80IA was accepted during AY 2017-18 cannot be an acceptable premise as mentioned in the assessee's submission that wordings of the assessment order "examined & perused conclusively means that FAO accepted Assessee's claim of 80IA. 6.2 Assessee's stated that FAO either....
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.... deduction u/s 80IA of IT Act for various reasons. 6.4.1 Assessee is taking plea in the rectification application that since 80IA claim is admissible as the same was submitted along with his revised return of income u/s 139(5) of IT Act quoting section 80IA (7) of IT Act which says that: "The deduction under sub-section (1) from profits and gains derived from an undertaking shall not be admissible unless the accounts of the undertaking for the previous year relevant to the assessment year for which the deduction is claimed have been audited by an accountant, as defined in the Explanation below sub-section (2) of section 280, and the assessee furnishes, along with his return of income, the report of such audit in the prescribed form duly signed and verified by such accountant." However it is to be noted that when section 80IA of IT act is read with Section 80AC of the Income Tax Act, time limitation of the claiming the aforesaid deduction become clearer, as section 80AC of IT Act elaborates that no deduction would be admissible under sections 80IA, section 80IAB, section 80IB, section 80IC, section 80ID or section 80IE, unless the return of Income by the a....
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....ove facts and legal positions as well, it is not crystal clear that in Assessee's case, during the assessment order, FAO accepted the claim of the assessee on issue of 80IA deduction of IT Act. 7. Thus, to sum up, it is stated that in view of above facts discussed, the total income of the assessee, as it was done during the assessment order, is as under: Income determined as per ass assessment order assessment order dated 06/03/2021 : Rs. 11,68,26,650/- However, the assessing officer was passed the assessment order u/s 143(3) 143(3A) & 143(3B) vide order number ITBA/AST/S/143(3)/2020- 21/1031302466(1) dated 08.03.2021 and while computing the assessed income determination amounting to Rs. 11,63,23,680/- as per order 143(1)(a) passed by the CPC implies that FAO has rejected the claim of the appellant and accepted the CPC order u/s 143(1)(a) of the Income Tax Act, 1961. The relevant extract of assessment order and submission filed by the appellant reproduced as under:- 2. In this case one of the issue for selection is deduction claimed for Industrial Undertaking u/s. 80IA/ 80IAB/ 80IAC/IB/ IC/ IBA/80ID/80IE/10A/10AA. It seen from the records tha....
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.... and Tax Audit Report (TAR) and proposed an adjustment of Rs. 47,44,809. However, the Appellant vide letter dated 18/03/21 to Jurisdiction AO, Solapur copy enclosed as Annexure B, its response has already clarified that there is only a difference in the manner of presentation and the Appellant has rightfully claimed the same as deduction on payment basis under section 43B and the action of the CPC in not allowing the same is a clear mistake apparent from record future. Further we are also enclosing certificate as per Annexure C confirming the payment as per dates specified, which are before the due date of filing of the return. c. Disallowance of deduction in relation to contribution made towards provident fund setup under the ESI Act - For the year under consideration, in the Tax Audit Report, the Appellant had reported compliance of deposition of employees contribution to provident fund, employee state insurance corporation and labour welfare fund under clause 20(b). The CPC vide its notice proposed an adjustment under section 36(1)(va) of the Act in relation to aforesaid contribution amounting to Rs. 13,06,741. The Appellant filed response letter dated 18/03/21 to Juris....
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....he appellant has been considered. I have gone through the facts and found that the AO passed the rectification order wls 154 r.ws. 143(2) dated 03.07.2023 and relevant extract as under:- 06. Findings of the AO in response to the submission para a to d summarised in Para 5 above 6.1 It is stated that similar wording of assessment order AY 2017-18 and AY 2018-19 and similar claim of 80IA was accepted during AY 2017-18 cannot be an acceptable premise as mentioned in the assessee's submission that wordings of the assessment order "examined & perused" conclusively means that FAO accepted Assessee's claim of 80IA. 6.2 Assessee's stated that FAO either would have accepted both the claim of 80IA and 80JJAA or rejected it, and since in the computation, it is seen that 80JJAA is allowed and 80IA is disallowed is absurd. In response, it is stated that even then it cannot be conclusively said, as per the readings of the assessment order, that FAO have accepted the claim of the assessee, as it can be an opposite scenario as well, that AO rejected both claims and erroneously computed it based on assessed income u's 143(1) of IT Act 1961. Thus, on this premi....
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....sment year for which the deduction is claimed have been audited by an accountant, as defined in the Explanation below sub-section (2) of section 288, and the assessee furnishes, along with his return of income, the report of such audit in the prescribed form duly signed and verified by such accountant However it is to be noted that when section 80IA of IT act is read with Section 80AC of the Income Tax Act, time limitation of the claiming the aforesaid deduction become clearer, as section 80AC of IT Act elaborates that no deduction would be admissible under sections 80IA, section 80IAB, section 80IB, section 80IC, section 80ID or section 80IE, unless the return of income by the assessee is furnished on or before the due date specified under Section 139(1). Exact wordings of the Act is reproduced here for ready reference: 25. For section 80AC of the Income-tax Act, the following section shall be substituted, namely- 80AC Deduction not to be allowed unless return furnished- Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after - (i) the 1st day of April 2006 but before the 1st....
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....also passed the detailed rectification order u/s 154 r.w.s. 143(3) vide order number ITBA/REC/S/154-1/2023- 24/1054089997(1) dated 03.07.2023 and elaborately discussion relevant and applicable case laws, has remarked that Para no. 6.4.3" in the rectification order as under:- 6.4.3 Based on the above facts and legal positions as well, it is not crystal clear that in Assessee's case, during the assessment order, FAO accepted the claim of the assessee on issue of 80IA deduction of IT Act. Hence, based on the above the assessment order/rectification order does not warrant any interference. Hence, the rectification Order is upheld the ground is noted as dismissed." 4. Dissatisfied with the above order(s) of the Ld. CIT(A), the assessee is in appeal before the Tribunal raising the following grounds of appeal: ITA No 2392/PUN/2024 - Appeal under section 143(3) order "On the facts and in circumstances of the case and in law, the NFAC has: General: 1. erred in not allowing the Appellant the deduction of Rs 5,80,64,205 under section 80-IA of the Act to the Appellant; Merits: Allowability of claim for deduction under section 80-IA of t....
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....nder section 143(3) read with 154 of the Act dated 11 January 2023, 3. failed to appreciate that withdrawal of deduction allowed by earlier order tantamounts to a change of opinion which is outside the purview of rectification under section 154 of the Act and thereby, making the rectification order bad-in-law and liable to be quashed; 4. ought to have appreciated that the present issue of allowability of deduction under section 80-IA by way of revised return which was allowed vide earlier order under section 143(3) read with 154 of the Act dated 11 January 2023 but disallowed vide the impugned rectification order is debatable due to various reasons and thereby, making the impugned rectification order bad-in-law and liable to be quashed; Merits: Allowability of claim for deduction under section 80-IA of the Act - Rs. 5,80,64,205 5. erred in upholding the actions of the learned AO in denying the Appellant's claim for deduction under section 80-IA of the Act, 6. ought to have appreciated that if the audit report in Form 10CCB is filed any time before the framing of the assessment, the requirements of the provisions of section 80-IA read....