TaxTMI 
TaxTMI 
2025 (3) TMI 2117
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....aw and is not sustainable. It is prayed that the order be set aside. 4. The CIT(A) erred both in law and the facts in disallowing the deduction claimed under section 80IAB. 5. The CIT(A) erred in approving the adjustment made by the CPC in not considering the claim of deduction u/s 80IAB of the Act. The CIT(A) failed to appreciate that the disallowance made in the Intimation under section 143(1)(a) is in contravention of the Proviso and is bad in law. 6. The CITA) erred in upholding the adjustment made in the intimation u/s 143(1), ignoring the submissions and documentary evidence presented before the AO during the scrutiny proceedings. 7. The CIT(A) ought to have given a clear finding regarding the allowability of the deduction under section 80IAB after the scrutiny of the clarifications and documentary proof called for from the appellant during the scrutiny assessment proceedings. The CIT(A) failed to appreciate the written submissions filed during the appeal proceedings and has not recorded any findings on the same. 8. The CIT(A) erred in stating that the intimation order under section 143(1)(a) does not merge into the scrutiny assess....
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....2020 declaring 'nil' income after claiming deduction u/s 80IAB of the Act. The return of income was processed by the CPC u/s 143(1) of the I.T. Act, 1961 on 26/12/2021 whereby the claim of deduction u/s 80IAB was disallowed. Thereafter, the case of the assessee was selected for scrutiny to verify the deduction claimed u/s 80IAB and the Assessing Officer has passed the scrutiny assessment on 27/09/2022 whereby the claim of deduction u/s 80IAB was disallowed on the ground of delay in filing the tax audit report in Form 10CCB. 4. The assessee challenged the action of the Assessing Officer before the learned CIT(A) but could not succeed. The learned CIT(A) was of the view that, the deduction u/s 80IAB was disallowed by the CPC while processing the return of income and therefore, the assessee was required to file a separate appeal to challenge the order passed u/s 143(1)(a) of the I.T. Act, 1961. 5. Before the Tribunal, the learned AR of the assessee has submitted that, once the case of the assessee was selected for scrutiny and the Assessing Officer has passed the scrutiny assessment u/s 143(3) of the Act, then the order of the CPC u/s 143(1) merges with the assessment or....
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....961 when the audit report in form 10CCB was not filed on or before the due date of filing the return u/s 139(1) of the Act. She has relied upon the impugned order of the learned CIT(A) for the A.Y 2021-22. 6. We have considered the rival submissions as well as the relevant material available on record. As regards the issue of not challenging the order/intimation issued by the CPC u/s 143(1)(a) of the Act is concerned, it is pertinent to note that once the case of the assessee was taken up for scrutiny assessment and the order u/s 143(3) r.w.s. 144B of the I.T. Act, 1961 was passed by the Assessing Officer, then the intimation issued by the CPC u/s 143(1)(a) stands merged with the scrutiny assessment order passed by the Assessing Officer and should have no independent existence so long scrutiny assessment order is in existence. The Hon'ble Allahabad High Court in case of Khandelwal Rubber Products (P) Ltd vs. CIT (Supra) has an occasion to deal with this issue and held in para 21 to 23 as under: "21. On general principle, it is fundamental to the scheme of the Act, that there may only arise one assessment order for one assessment year in the case of any assessee. Onc....
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....is no denial of fact that AO can make the above disallowance, however, the validity of the intimation issued u/s 143(1) is limited to mere intimation of correctness and accuracy of the income declared in ROI and its accuracy based on the information submitted along with the ROI. It does not carry the legitimacy of an assessment. When the assessment was processed under regular assessment then it loses its individuality and merges with the regular assessment. We are in agreement with the findings of Learned CIT(A) that the intimation u/s 143(1) merges with the order passed u/s 143(3) of the Act and the appeal against the above intimation becomes infructuous. In our view, he should have stopped with the above findings and should not have proceeded to decide the issue on merits, because it is brought to his knowledge that the assessee has filed appeal against the regular assessment order. Therefore, he has travelled beyond the mandate. The issue of allowability of section 11 is already considered in the regular assessment and that issue is already in appeal before FAA. Therefore, reviewing the same is uncalled for." 8. Accordingly, in view of the above cited judgement of the Hon'....
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....eturn was not mandatory but directory and that if the audit report was filed at any time before the framing of the assessment, the requirement of the provisions of the Act should be held to have been met. 6. That is also the consistent view of the other High Courts, including the High Court of Bombay in CIT v. Shivanand Electronics [1994] 209 ITR 63 / 75 Taxman 93 (Bom.), apart from Gujarat High Court in Zenith Processing Mills v. CIT [1996] 219 ITR 721 (Guj.) and Punjab and Haryana High Court in CIT v. Mahalaxmi Rice Factory [2007] 294 ITR 631/ 163 Taxman 565 (Punj. & Har). 7. The Calcutta High Court in the case in the CIT v. Berger Paints (India) Ltd. [2002] 254 ITR 503/[2003] 126 Taxman 435 (Cal.) has also concurred with the said view which was followed by the Tribunal in this case. 8. Mr. T. Ravikumar, the learned counsel for the appellant is not able to produce any other judgement contrary to the above said views consistently taken. 9. In the light of the above, by virtue of hierarchy of judgements which are against the Revenue, the substantial question of law (1) would not arise at all for consideration. 10. In so far as the substa....
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....e. Even otherwise in the case of CIT vs. Wipro Ltd (Supra), the Hon'ble Supreme Court has distinguished the judgment in case of G.M Knitting Industries (P) Ltd and that does not amount to overruling the same. Accordingly, having regard to the fact that the audit report in Form 10CCB was filed much before the assessment order was passed and was duly available with the Assessing Officer at the time of passing the assessment order, then the deduction u/s 80IAB cannot be denied merely because it was not filed at the time of filing the return of income u/s 139(1) of the I.T. Act, 1961. 9. ITA No.21/Hyd/2025 - A.Y 2021-22 9.1 For the A.Y, 2021-22, the assessee has raised the following grounds of appeal: 1. The learned CIT(A) erred in passing the ex parte order without giving reasonable opportunity to the appellant. 2. . The learned CIT(A) erred in passing the order without giving a notice of hearing and providing an opportunity of hearing to the assessee as per section 250(1). 3. The learned CIT(A) order is not in consonance with the statutory provisions and is bad in law and is not sustainable. It is prayed that the order be set aside. 4. Th....