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2025 (3) TMI 219 - AT - Income TaxRectification u/s 154 - denial of deduction u/s 80JJAA as all the conditions laid down u/s 80JJAA - HELD THAT - The claim of deduction u/s 80JJAA of the Act being a controversial issue is beyond the ambit of provisions of section 154. It is pertinent to note that the scope of rectification of mistake u/s 154 of the Act is very limited and circumvented only to rectify the mistake apparent from record and cannot be extend ed to the issues which requires a long drawn reasoning and decisions. The claim of deduction u/s 80JJAA cannot be disallowed without examining the relevant facts as well as law on the point. Accordingly disallowance of deduction u/s 80JJAA of the Act by the CPC u/s 154 of the Act is not valid as the said issue is beyond the scope of provisions of section 154 - Appeal of the assessee is allowed.
The appeal in this case was brought by the assessee against an order dated 27/09/2024 of the learned CIT (A)-NFAC, Delhi, for the A.Y.2021-22. The core issues presented and considered in this case are as follows:1. Violation of Principles of Natural Justice.2. Eligibility for deduction u/s 80JJAA.3. Denial of deduction under section 80JJAA.4. Disallowance of deduction under section 80JJAA without considering Form 10DA.5. Disallowance of the 80JJAA deduction under section 143(1)(a)(ii).The detailed analysis of the issues is as follows:Issue 1: Violation of Principles of Natural JusticeThe assessee claimed a violation of the principles of natural justice. However, this issue was not discussed further in the judgment, and no specific findings or conclusions were provided by the Tribunal.Issue 2: Eligibility for deduction u/s 80JJAAThe assessee contended that they were eligible for deduction under section 80JJAA as all conditions had been met. The Tribunal considered the arguments put forth by the assessee and examined the relevant provisions of the Income Tax Act, 1961. The Tribunal noted that the claim for deduction had already been allowed in the Intimation order under section 143(1) and through a Rectification Return under section 154. The Tribunal found that the disallowance of the deduction by the CPC was not valid as it was beyond the jurisdiction of section 143(1) of the Act.Issue 3: Denial of deduction under section 80JJAAThe assessee argued that the denial of the deduction under section 80JJAA by the CIT (A) was erroneous. The Tribunal considered the submissions of both parties and reviewed the orders passed by the authorities. The Tribunal observed that the claim of deduction under section 80JJAA was a controversial issue and beyond the scope of provisions of section 154 of the Act. The Tribunal held that the disallowance of the deduction under section 80JJAA by the CPC was not valid, and therefore, the disallowance was deleted.Significant Holdings:The Tribunal held that the claim of deduction under section 80JJAA was a controversial issue and could not be entertained under section 154 of the Act. The Tribunal emphasized that the scope of rectification of mistake under section 154 is limited to rectifying mistakes apparent from the record and cannot be extended to issues requiring detailed reasoning and decisions. Consequently, the disallowance of the deduction under section 80JJAA was deemed invalid, and the appeal of the assessee was allowed.In conclusion, the Tribunal ruled in favor of the assessee, allowing the appeal and deleting the disallowance of the deduction under section 80JJAA. The judgment was pronounced in the Open Court on 3rd March, 2025.
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