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2021 (4) TMI 1033 - HC - Income TaxDeduction u/s 80JJAA - assessee had not made the claims u/s 80JJA and qua prior period expenses in the original return - assessee did not move the AO with a revised return for claiming deductions under Section 80JJAA of the Act and for prior period expenses and assessee for the first time made these claims before the AO by way of a statement/communication dated 14.12.2009 -CIT(A) concluded that the deduction under Section 80JJAA was correctly claimed by the assessee - Tribunal setting aside the order of the Commissioner of Income Tax (Appeals) in short CIT(A) granting deduction under Section 80JJAA of the Act and qua prior period expenses - HELD THAT - Once the Tribunal accepted the view taken by the CIT(A) that it could entertain fresh claims; a view which the CIT(A) has expressed in paragraph 6.6.2 of its order all that the Tribunal was required to examine was as to whether the CIT(A) had scrupulously verified the material placed before it before allowing deductions claimed by the assessee. The Tribunal however instead of examining this aspect of the matter observed and in our view incorrectly that because an opportunity was not given to the AO to examine the material therefore the matter needed to be remanded to the AO for a fresh verification. Unless the Tribunal would have reached to a conclusion and expressed its clear view in that respect as to what was wrong or missing in the examination made by the CIT(A) a remand was not called for. We agree with Mr. Seth s contention that the CIT(A) in the exercise of its powers under Section 250(4) of the Act was entitled to seek production of documents and/or material to satisfy himself as to whether or not the deductions claimed were sustainable/viable in law. This was however a case where the details were placed before the AO who declined to entertain the claims only on the ground that they did not form part of assessee s original return and that the assessee had not made a course correction by filing a revised return. This view was based as noticed above on the judgment of the Supreme Court rendered in Goetze (India) Ltd. 2006 (3) TMI 75 - SUPREME COURT . The CIT(A) squarely dealt with this and concluded that a fresh claim could be entertained. Therefore the Tribunal as noticed above has accepted this view of the CIT(A) and the revenue has not come up in appeal before us assailing this conclusion of the Tribunal. In any event we are of the view that if a claim is otherwise sustainable in law then the appellate authorities are empowered to entertain the same. See ASPENTECH INDIA PVT LTD 2011 (11) TMI 366 - DELHI HIGH COURT Therefore in our view the judgment of the Tribunal deserves to be set aside. The fresh claims made by the assessee as allowed by the CIT(A) will have to be sustained. The questions of law are answered in the favour of the assessee
Issues Involved:
1. Whether the Income Tax Appellate Tribunal (Tribunal) misdirected itself in setting aside the order of the Commissioner of Income Tax (Appeals) (CIT(A)) granting deduction under Section 80JJAA of the Act and qua prior period expenses. 2. Whether the Tribunal erred in law in remanding the assessee's claims to the Assessing Officer (AO) for verification and satisfaction although that exercise had been carried out by CIT(A) as mandated under the Act. Issue-wise Detailed Analysis: 1. Misdirection of Tribunal in Setting Aside CIT(A)’s Order: The Tribunal set aside the CIT(A)'s order that granted deductions under Section 80JJAA and for prior period expenses and remanded the matter to the AO for verification. The Tribunal's decision was based on the premise that the AO was not given an opportunity to respond to the evidence considered by CIT(A). However, the CIT(A) had already examined the evidence in detail, including the Chartered Accountant's report in Form 10DA and the detailed information on new regular workmen and prior period expenses. The CIT(A) allowed the deduction under Section 80JJAA amounting to ?1,07,33,164 and partially allowed the deduction for prior period expenses amounting to ?25,40,305, disallowing the rest due to non-deduction of withholding tax and expenses not pertaining to the relevant assessment year. 2. Error in Remanding Claims to AO for Verification: The Tribunal's remand to the AO was deemed unnecessary as the CIT(A) had exercised powers under Section 250(4) of the Act to make further inquiries and had thoroughly verified the claims. The Tribunal failed to identify any specific shortcomings or errors in the CIT(A)'s verification process. The High Court noted that the CIT(A) was within its rights to direct the production of evidence and conduct inquiries for the disposal of the appeal. The Tribunal's reliance on the lack of opportunity for the AO to examine the evidence was misplaced, as the CIT(A) had already conducted a detailed examination and verification of the claims. Conclusion: The High Court set aside the Tribunal's judgment, sustaining the fresh claims made by the assessee as allowed by the CIT(A). The questions of law were answered in favor of the assessee and against the revenue. The appeal was disposed of accordingly, and the pending application was also closed.
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