TaxTMI 
TaxTMI 
2025 (11) TMI 2065
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....essment order the AO at S.no 2 concluded as follows In view of material on record, no addition on the issue is made. The only issue in this case is deduction from total income under chapter by VIA which was accepted by the AO and the Hon CIT(A) did not give any specific order. 3. The appellant craves leave to add to, amend, alter, delete all or any of the above grounds of appeal." 2. Succinctly stated, the assessee society, which is formed for providing credit facilities to its farmer members, had filed its return of income for AY 2018-19 on 29/10/2018 declaring NIL income (after claiming deduction under section 80P of the Act of Rs. 84,01,394/-). 3. Thereafter, the case of the assessee society was selected for "limited scrutiny" for verifying its claim for deduction from total income under Chapter VI-A. 4. The AO, vide his order passed under section 143(3) r.w.s 143(3A) & 143(3B) of the Act, dated 10/02/2021 though specifically observed that, in view of material available on record, no addition on the subject issue for which the case of the assessee society was selected for "limited scrutiny" was being made, but the at the same time observed that the assessment o....
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....and was duly supported by the return and documents filed. Therefore, the computation sheet was claimed to be erroneous and the tax demand arising from it unjustified. The appellant requested that necessary directions be issued to correct the computation and cancel the demand. I have carefully considered the grounds of appeal, the facts of the case, the assessment order, the computation sheet, and the written submissions filed by the appellant on 25.10.2023, 19.03.2024 and 19.06.2025. However, the appellant has not provided any specific rebuttal or supporting evidence during the appellate proceedings to justify the deduction or to challenge the basis of disallowance by the AO. The submissions remained general in nature and did not address the issue under scrutiny in detail. The matter is therefore adjudicated on the basis of the records available. 6.1 Ground No. 1: Decision: 6.1.1 The appellant has contended that the AO has accepted the returned income and passed the assessment order without making any addition or disallowance. According to the appellant, the body of the order indicates acceptance of returned income, and hence the computation shee....
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....ncome, particularly with respect to the disallowance of deduction under section 80P. It is submitted that the absence of such a notice is in violation of the principles of natural justice and that any proposed deviation should have been brought to the notice of the assessee with an opportunity to respond. This argument, though appealing at a general level, does not hold good under the facts and circumstances of the present case. Firstly, the case was selected for limited scrutiny under the e-assessment scheme specifically on the issue of deduction under Chapter VI-A. The appellant was very much aware of the issue under examination. During the assessment proceedings, the AO called for relevant details, and the assessee submitted documents including audit reports, financial statements, and the return of income. The appellant had full knowledge of the issue and had an opportunity to present all relevant materials in support of the claim. 6.2.2 Secondly, in the e-assessment framework, procedural requirements such as issuance of show cause notice are to be interpreted in the context of the automated and document- driven nature of the scheme. Where the issue under scrut....
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....tion was warranted based on the material on record does not preclude the AO from rejecting a deduction claim if the documentation or justification for the same is found to be insufficient. The AO has disallowed the section 80P deduction in the computation, which has resulted in the tax liability. This is not a computational error but a conscious and valid determination of taxable income. 6.3.3 Further, during the appellate proceedings, the appellant has merely reiterated the same grievance without submitting any evidence or legal basis to demonstrate the eligibility of the deduction claimed. No specific arguments or factual rebuttals were made on why the deduction should not have been disallowed. It is also important to note that the disallowance was made within the scope of scrutiny and based on the documents submitted by the appellant. There is no procedural irregularity or legal infirmity in the manner in which the disallowance was carried out. 6.3.4 Hence, the plea that the computation sheet is erroneous and contradictory to the order is unfounded. The disallowance has been properly made in the computation and is deemed to be part of the assessment order. This....
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....rt in GKN Driveshafts (India) Ltd. v. ITO is not applicable to the facts of the present case. The ground raised in this regard is therefore dismissed. Conclusion: 6.3.7 In view of the above discussions and findings on each ground, and considering the facts, documents and contentions on record, it is evident that the AO has completed the assessment in accordance with law and within the permitted scope of scrutiny. The appellant has not provided any convincing legal or factual basis to establish error in the assessment or justify the deduction claimed under section 80P. The mere assertion that the returned income was accepted is not sufficient to nullify the computation outcome, especially when the deduction itself was the very subject of scrutiny. 6.3.8 Accordingly, all grounds of appeal are treated as dismissed. 7.0 In the result, the appeal is hereby dismissed." 7. We have heard the Learned Authorized Representatives of both parties, perused the orders of the lower authorities, and the material available on record. 8. Sri KSS Sarma, Chartered Accountant, the Learned Authorized Representative (for short, "Ld. AR") for the assessee, at the t....
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....issue for which the case of the assessee was selected for "limited scrutiny" was being made. 12. Admittedly, it is a matter of fact borne from the record that there is no whisper in the assessment order about the disallowance of the assessee's claim for deduction under section 80P of the Act of Rs. 84,01,387/-, i.e., the solitary deduction that was claimed by the assessee society in its return of income under Chapter VI-A. On the contrary, we find that the AO, while framing the assessment, had specifically observed that in view of the material available on record, no addition on the issue for which the case of the assessee society was selected for "limited scrutiny" was being made. Having said so, we are unable to comprehend that, as to how the AO could have thereafter, vide the "computation sheet" which is stated to be an order under section 143(3) r.w.s 143(3A) & 143(3B) of the Act, dated 10/02/2021, declined the assessee's claim for deduction under section 80P of Rs.84,01,387/- and raised a consequential demand of Rs. 25,17,417/- in its hands. 13. We find that the Hon'ble Supreme Court in the case of Kalyan Kumar Ray vs. CIT (1991) 191 ITR 634 (SC), had observe....