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2023 (4) TMI 327 - AT - Income TaxDeduction u/s. 80JJAA - claim made was disallowed to the assessee because it was not included in the return of income filed by the assessee - HELD THAT - We note that it is a case where a return has been processed u/s. 143(1) vide issuance of intimation. At the first appellate stage, assessee has claimed a deduction u/s. 80JJAA by raising an additional ground which the Ld. CIT(A) has not admitted - As decided in Goetz (India) P. Ltd. 2006 (3) TMI 75 - SUPREME COURT even if a claim is not made before the AO, it can be made before the appellate authority and in the said judgment, the jurisdiction of appellate authority to entertain such a claim has not been negatived. Assessee did not have the opportunity to raise the contention before the AO as its return was processed by CPC, Bangalore and intimation was issued u/s. 143(1) and, therefore, the assessee had no opportunity to make a fresh claim by way of filing a revised return before the CPC, Bangalore since the process is completed. The claim made by the assessee at the first appellate stage is an allowable claim. Decision of Hon ble Supreme Court in the case of Wipro Ltd. 2022 (7) TMI 560 - SUPREME COURT has observed a distinction between the claim made under Chapter-III and that made under Chapter-VIA and, therefore, is not applicable in the present case as it is a claim made u/s. 80JJAA of the Act falling under Chapter VIA of the Act. Assessee has been claiming a deduction for the preceding as well as subsequent assessment year i.e. AYs 2018-19 and 2020-21 which has been allowed by the Ld. CIT(A) at the appellate stage. The facts relevant to the claim of deduction made by the assessee were placed before the Ld. CIT(A). Also, the submissions made before the Ld. CIT(A) in respect of the claim of deduction made by the assessee are placed on record in the paper book. Thus no hesitation in allowing the admission of additional ground raised by the assessee in respect of claim of deduction u/s. 80JJAA of the Act which has been raised at the first appellate stage. Accordingly, grounds raised by the assessee in this respect are allowed.
Issues Involved:
1. Disallowance of claim made under Section 80JJAA of the Income-tax Act, 1961. 2. Admission of additional grounds of appeal at the appellate stage. Issue-Wise Detailed Analysis: 1. Disallowance of Claim Made Under Section 80JJAA: The primary issue in this appeal pertains to the disallowance of the claim made by the assessee under Section 80JJAA of the Income-tax Act, 1961. The assessee contended that the claim for deduction was disallowed because it was not included in the return of income filed. However, during the appellate proceedings, the assessee raised this claim as an additional ground, citing the decision of the Hon'ble Delhi High Court in International Tractors Ltd. Vs. DCIT 435 ITR 85 (Del.) and the Karnataka High Court in Texus Instruments India Pvt. Ltd. 435 ITR 1 (Kar.), which support the claim's admissibility. The assessee argued that it incurred employee benefit expenses amounting to Rs. 24,77,20,581, which was an increase from the previous year's expenses, making it eligible for a deduction of Rs. 61,64,176 under Section 80JJAA. The assessee supported its contention with several judgments, including Jute Corporation of India Ltd. Vs. CIT (1991) 187 ITR 688 (SC) and National Thermal Power Company Ltd. Vs. CIT (1998) 229 ITR 383 (SC), to assert that appellate authorities can entertain new claims not made in the original return. 2. Admission of Additional Grounds of Appeal: The assessee filed additional grounds for the deduction claim at the first appellate stage, arguing that the appellate authorities have the jurisdiction to admit such claims, even if not made before the Assessing Officer (AO). The CIT(A) rejected the additional ground on the basis that the judgments cited by the assessee pertained to orders under Section 143(3) and not to intimation under Section 143(1). The Tribunal considered the arguments and noted that the Hon'ble Supreme Court in Goetz (India) Ltd. Vs. CIT (2006) 284 ITR 323 (SC) held that while the AO cannot entertain new claims other than by revised return, appellate authorities can admit such claims. The Tribunal also referred to the decision of the Hon'ble High Court of Karnataka in PCIT Vs. Karnataka State Cooperative Federation Ltd., which upheld the power of appellate authorities to entertain claims not made in the original return or revised return. The Tribunal further distinguished the decision of the Hon'ble Supreme Court in PCIT Vs. Wipro Ltd., noting that the distinction made between claims under Chapter-III and Chapter-VIA of the Act does not apply to the present case, as the claim under Section 80JJAA falls under Chapter-VIA. The Tribunal observed that the assessee had been allowed similar deductions for the preceding and subsequent assessment years (AYs 2018-19 and 2020-21) by the CIT(A). The Tribunal concluded that the claim made by the assessee at the first appellate stage is allowable based on judicial precedents and the facts of the case. Conclusion: The Tribunal allowed the appeal of the assessee, admitting the additional ground for the claim of deduction under Section 80JJAA. The Tribunal emphasized the jurisdiction of appellate authorities to entertain new claims not made in the original return, supported by relevant judicial precedents. The order was pronounced on 1st February 2023, allowing the appeal in favor of the assessee.
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