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Judgment
PER ANUBHAV SHARMA, JM:
This appeal preferred by the revenue against the order dated 14.06.2024 of Ld. National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as the First Appellate Authority or ‘the ld. FAA’ for short) in DIN & Order No: ITBA/NFAC/S/250/2024-25/1065673683(1) arising out of the assessment order dated 20.09.2023 u/s 154 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by DDCIT, CPC, Bangalore, for AY: 2022-23.
On hearing both sides we find that assesse had filed return of income and had claimed deduction u/s 80IA of the Act by furnishing audit report in Form 10CCB. To process this return CPC has considered the above claim u/s 80IA(4)(iv) of the Act to be not allowable for which assesse filed a rectification application asking to reprocess the return which was not accepted and against same assesse filed appeal which has been allowed by NFAC for which department is in appeal.
Ld. DR has heavily relied the findings of Assessing Officer and has filed written submissions wherein the assessing officer’s remarks have been reproduced and for completeness we also reproduce the same:
“In this case, the Ld. CIT(A) has observed that the order u/s 154 dated 20/09/2023 is not sustainable and hence and hence the Jurisdictional AO while giving effect to this appellate order may verify the submissions and the contentions of the appellant from the record and give credit if found tenable as per income tax Act and rectify the order accordingly. However, on examination of the records it is found that the assessee has filed its return of income of the A.Y. 2022-23 on 15.11.2022 after the due date of filing of return of income. Hence, the claim of the assessee is not allowable and the decision of Ld. CIT(A) is not acceptable, therefore further appeal is recommended in this case on the following ground:-
“1.Whether on the facts and circumstances of the case and in law, the CIT(A) is correct in holding that the order u/s 154 is unjustified, even as/ though the assessee has not filed its return of income within the due date, hence the claim u/s 80IA(4)(iv) of the Income Tax Act 1961 is not allowable.”
We find that NFAC has correctly appreciated the factual aspect and the law to conclude that the nature of disallowance made in intimation u/s 143(1) was not legally permissible. NFAC records factual audit report for Form 10CCB has been filed well before furnishing of return.
We are of the considered view that the nature of disallowance certainly required assesse being given an opportunity of hearing and such disallowance u/s 143(1) was not permissible and when the mistake was brought to the knowledge of CPC by rectification, the same was also not address and ld. CIT(A) has duly taken into consideration all aspects to disallow the addition. Ground raised by the department have not substance The appeal of the department is dismissed.