TaxTMI 
TaxTMI 
2026 (9) TMI 1237
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.... 1. "On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in directing the Assessing Officer to reprocess the revised return of income considering the Revised Tax Audit Report filed on 30.03.2021, which was filed beyond the extended due date of 15.01.2021 applicable to A.Y. 2020-21 and, therefore, was correctly not considered by the CPC while processing the return under section 143(1) of the Act. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance made in the intimation under section 143(1) of the Act under section 40(a)(ia) amounting to Rs. 8,59,73,619/- without remanding the matter to the file of the Assessing Officer for necessary verification as co....
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....e assessee furnished a revised Tax Audit Report on 30.03.2021, wherein the disallowance under section 40(a)(ia) was reported at Nil, while the disallowance under section 43B(da) continued to be reported at Rs. 18,77,82,425/-. 4. Thereafter, on 31.03.2021, the assessee filed its revised return of income, deleting the disallowance under section 40(a)(ia) of Rs. 2,96,27,708/- and retaining the disallowance under section 43B(da) of Rs. 18,77,82,425/-. Consequently, the assessee declared a revised loss of Rs. 4,15,06,790/-. 5. While processing the revised return under section 143(1) of the Act on 23.12.2021, the CPC made a disallowance of Rs. 8,59,73,619/- under section 40(a)(ia), computed with reference to the total interest expenditure o....
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....wance under section 40(a)(ia) without providing the Assessing Officer an opportunity to verify the material relied upon by the assessee and, therefore, the provisions of Rule 46A(3) were not complied with. With regard to the third ground, the Ld. DR submitted that the direction to allow set-off of brought forward losses was issued without verification of the assessee's claim. 10. Per contra, the Ld. Authorized Representative (Ld. AR) of the assessee supported the order of the Ld. CIT(A). He submitted that the revised Tax Audit Report was furnished before the revised return was filed and well before the processing of the return by the CPC. It was submitted that the revised report was necessitated by the subsequent receipt of Form 26A and ....
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....ecause it was furnished after the specified due date cannot, in the facts of the present case, be accepted in isolation. The revised report was furnished before the processing of the return and was accompanied by a corresponding revised return. The correction was also directly connected with the applicability of section 40(a)(ia), consequent upon the assessee obtaining Form 26A under section 201(1) of the Act. 15. We also note that section 143(1) of the Act, contemplates processing of the return with reference to the return and the accounts and documents accompanying it. Further, where an adjustment falling within the scope of section 143(1)(a) is proposed, the statutory requirement of intimation to the assessee has to be complied with i....
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.... the amount already disallowed under section 43B(da). The same amount had been retained as a disallowance under section 43B(da) even in the revised return. Thus, making a further disallowance of 30% of the very same amount under section 40(a)(ia) resulted in an excess disallowance in respect of the same expenditure. The Ld. CIT(A) was, therefore, justified in directing deletion of the corresponding disallowance under section 40(a)(ia). 20. The Revenue has further alleged violation of Rule 46A(3). We are unable to accept this contention. Rule 46A is attracted where an assessee seeks to produce before the first appellate authority evidence which was not produced before the Assessing Officer and such evidence is admitted under the circumsta....