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2022 (6) TMI 393 - AT - Income Tax


Issues:
Appeal against order of National Faceless Appeal Centre under section 250 of the Income Tax Act - Disallowance and deduction under section 43B - Failure to give effect to directions of CIT(A) - Rejection of application under section 154 for rectification - Mechanical rejection of claim by CIT(A) - Negligence and contemptuous behavior of Assessing Officer.

Analysis:
The appeal was filed by the assessee against the order of the National Faceless Appeal Centre under section 250 of the Income Tax Act. The assessee had initially offered suo motu disallowance under section 43B of the Act but later realized certain mistakes and sought additional claims during assessment proceedings under section 143(3) of the Act. The Assessing Officer did not allow these additional claims and did not provide reasons for rejection. The CIT(A) admitted and decided in favor of the assessee's claims, directing the Assessing Officer to allow the claims as per law and verification. No appeal was filed by the Department against this order. However, the Assessing Officer failed to give effect to the CIT(A)'s directions in subsequent orders, leading to a series of requests for relief by the assessee which were rejected on flimsy grounds.

The Assessing Officer rejected the assessee's application under section 154 for rectification, stating that the alleged mistake did not constitute a mistake apparent on record. The assessee appealed against this rejection, but the CIT(A) also mechanically rejected the claim without proper consideration. The Tribunal observed that the case highlighted errors in the system and apathy on the part of the Income Tax authorities. It noted that the Assessing Officer failed to comply with the directions of the CIT(A) regarding the deduction claims under section 43B raised by the assessee. The Tribunal criticized the negligent and contemptuous behavior of the Assessing Officer and the CIT(A) for not addressing the simple prayer of the assessee.

Ultimately, the Tribunal allowed the appeal of the assessee and directed the Assessing Officer to give full appeal effect to the CIT(A)'s order and comply with the directions regarding the deduction claims under section 43B. The Tribunal emphasized the need for a speaking order in this regard to ensure proper compliance. The decision highlighted the importance of following appellate authorities' directions and the consequences of negligent behavior on the part of Income Tax authorities.

In conclusion, the Tribunal's decision rectified the failure of the Assessing Officer to give effect to the CIT(A)'s directions and provided relief to the assessee in the matter of deduction claims under section 43B. The judgment underscored the necessity of proper compliance with appellate orders and the repercussions of negligent conduct by tax authorities.

 

 

 

 

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