2024 (9) TMI 519 - AT - Income Tax

Rectification u/s 154 against adjustments made u/s 143(1)(a)(iv) / 143(1)(a)(ii ) - Disallowable u/s 36(1)(va) and Disallowance of deduction claimed u/s 80JJAA - HELD THAT - As noted that the original return was processed u/s. 143(1)(a) on 08/05/2020, making various disallowance along with disallowance u/s. 36(1)(va), disallowance of deduction claimed u/s. 80JJAA of the act. The assessee filed rectification application u/s. 154 on 24/02/2021 which was partly accepted. In our view the CIT(A) should have considered the claims of assessee on merits of the additions that were retained in the order u/s. 154 of the act. In our view, the assessee has not committed any error by filing a rectification petition against the original intimation issued u/s. 143(1) dated 08/05/2020. We therefore in the interest of justice, remand the issue back to the Ld.AO to consider the claims of the assessee on the above two issues in accordance with law having regard to the evidences filed by the assessee. Needless to say that proper opportunity of being heard must be granted to the assessee in accordance with law. Ground allowed for statistical purposes.

Summary

Issues:
1. Rectification application filed by the assessee against adjustments made in the original return under Section 143(1).
2. Disallowance of deduction claimed under Section 80JJAA.
3. Disallowance under Section 36(1)(va).
4. Jurisdiction of the Ld.CIT(A) to consider claims of the assessee.
5. Remand of the issue back to the Ld.AO for reconsideration.
6. Decision on other grounds raised in the appeal.

Analysis:
1. The case involved the assessee filing a rectification application against adjustments made in the original return under Section 143(1). The assessee faced difficulties in uploading the ITR, leading to a delayed filing. The NFAC, Delhi passed an order proposing adjustments, which were later partially accepted through a rectification application filed by the assessee.

2. One of the adjustments proposed was the disallowance of a deduction claimed under Section 80JJAA. The Ld.CIT(A) dismissed the claim, stating that the original cause of action arose during the proceedings under Section 143(1) and not under Section 154. However, the ITAT remanded the issue back to the Ld.AO for reconsideration, emphasizing the need to consider the claims on their merits.

3. Another aspect was the disallowance under Section 36(1)(va), which was also part of the adjustments made in the original return. The rectification application filed by the assessee led to a partial acceptance of the disallowance, reducing the amount disallowed.

4. The jurisdiction of the Ld.CIT(A) to consider the claims of the assessee was questioned. The ITAT opined that the Ld.CIT(A) should have considered the claims on their merits and granted proper opportunity to the assessee to be heard in accordance with the law.

5. Consequently, the ITAT decided to remand the issue back to the Ld.AO for reconsideration, instructing to review the claims of the assessee in light of the evidences provided, and ensuring a fair opportunity for the assessee to present their case.

6. Regarding other grounds raised in the appeal, the ITAT refrained from expressing any opinion at that stage due to the smallness of the addition. The decision was left open for the assessee to raise in appropriate circumstances before the relevant forum.

In conclusion, the appeal filed by the assessee was partly allowed for statistical purposes, with the ITAT emphasizing the need for a thorough reconsideration of the claims made by the assessee in the original return adjustments.