2022 (6) TMI 126 - AT - Income Tax

Deduction u/s 80P - AO vide order u/s 154 rejected the application of the appellant as it had not claimed the deduction in its return of income - HELD THAT - AO could hardly dispute the clinching fact that the assessee had not raised the impugned section 80P deduction claim in its return of income filed u/s 139(1) which forms a mandatory condition u/s 80A(5) r.w.s. 80AC of the Act as per decision in M/s. EBR Enterprises vs. Union of India 2019 (6) TMI 484 - BOMBAY HIGH COURT deciding the issue in Revenue s favour. We therefore reject the assessee s instant sole substantive grievance as well as the main appeal for this precise reason alone.

Summary

Issues:
Appeal against rejection of section 154 rectification for disallowing section 80P deduction claim.

Analysis:
The appeal pertains to the assessment year 2013-14 against the CIT(A)-4, Pune's order involving proceedings under section 154 of the Income Tax Act, 1961. The primary issue revolves around the rejection of the assessee's section 154 rectification filed on 26.07.2017, which sought to claim a section 80P deduction of Rs.34,39,055. The Assessing Officer rejected the application as the deduction was not claimed in the original return of income. The CIT(A) upheld this decision citing the appellant's failure to claim the deduction initially and not filing a revised return within the due date. The judgment references the decision of the Hon'ble Supreme Court in Goetze (India) Ltd. Vs. CIT, emphasizing the importance of making claims in the revised return within the stipulated timeframe.

The CIT(A) further differentiated the appellant's case from the CBDT Circular No. 689 and various decisions cited by the appellant, noting that those cases were under different sections of the Act and involved scrutiny assessments, unlike the present case. The judgment also highlights the appellant's reliance on the case of Gammon India Ltd. Vs. CIT (1995) 214 ITR 50 (Bom), which favored the Revenue. Ultimately, the CIT(A) dismissed the appellant's grounds of appeal, affirming the Assessing Officer's rejection of the rectification application under section 154 due to the absence of any apparent mistake in the record.

The authorized representative acknowledged that the assessee did not include the section 80P deduction claim in the original return of income filed under section 139(1) of the Act, which is a mandatory requirement under section 80A(5) read with section 80AC. The judgment references a recent decision of the jurisdictional high court in M/s. EBR Enterprises vs. Union of India, which ruled in favor of the Revenue on a similar issue. Consequently, the sole substantive grievance of the assessee was rejected, leading to the dismissal of the appeal.

In conclusion, the appeal was dismissed based on the failure of the assessee to claim the section 80P deduction in the original return of income, as mandated by the relevant provisions of the Income Tax Act. The judgment underscores the importance of adhering to statutory requirements and timely filing revised returns for claiming deductions, as highlighted by legal precedents and court decisions cited during the proceedings.