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2024 (6) TMI 462 - AT - Income TaxExemption claimed u/s 10(23C)(vi) disallowed due to a clerical error in the return of income - HELD THAT - Order under section 154 of the Act was passed by the CPC without granting the assessee an opportunity of being heard, which is a violation of the principles of natural justice. We are of the opinion that the CIT(A) should have adjudicated the appeal on its merits. Therefore, we set aside the order of the Ld.CIT(A) and restore the matter back to the file of the CIT(A) for fresh adjudication. The Ld.CIT(A) is directed to verify the exemption claimed by the assessee u/s 10(23C)(vi) of the Act and to grant appropriate relief if the claim is found to be correct. CIT(A) is also directed to ensure that the assessee is provided with an adequate opportunity of being heard before passing the order.
Issues involved: Appeal against order of Commissioner of Income Tax (Appeals) – National Faceless Appeal Centre, Delhi regarding disallowance of exemption u/s 10(23C)(vi) of the Income Tax Act, 1961 for Assessment Year 2018-19 due to clerical error in return of income.
Facts of the case: The assessee claimed exemption u/s 10(23C)(vi) but due to a clerical error, income was disclosed under "Income from Other Sources" in the return. CPC disallowed the exemption u/s 10(23C)(vi) and rejected rectification application u/s 154 without providing an opportunity to be heard. Ld.CIT(A) dismissed the appeal solely on procedural grounds. Grounds of appeal: Assessee challenges Ld.CIT(A)'s decision, highlighting errors in processing by CPC and failure to consider eligibility for exemption u/s 10(23C)(vi) and extension of due dates by CBDT for AY 2018-19. Decision: The Appellate Tribunal found that the exemption was disallowed due to a clerical error and CPC's order under section 154 violated principles of natural justice by not granting a hearing. Criticizing Ld.CIT(A) for focusing on procedural aspects, the Tribunal emphasized that Ld.CIT(A) should have adjudicated on merits. The matter was remanded back to Ld.CIT(A) for fresh adjudication, directing verification of exemption claimed u/s 10(23C)(vi) and ensuring the assessee's right to be heard. Conclusion: The appeal of the assessee was allowed for statistical purposes, emphasizing the importance of due process and merit-based adjudication in tax matters.
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