2025 (5) TMI 1160 - AT - Income Tax

Deduction claimed u/s. 10AA - AO had allowed it in the order under section 143(3) despite the initial disallowance by the CPC u/s 143(1) - HELD THAT - We find that in the order u/s. 143(3) which was selected for scrutiny inter alia for examining 10AA claim no disallowance has been made u/s.10AA by the AO u/s. 143(3) of the Act. We find that CIT(A) has taken a correct view hence we do not find any infirmity in the order of the Ld. CIT(A). Ld. DR could not controvert the above facts therefore we uphold the order of the CIT(A) and reject the ground raised by the assessee.

Summary

The Appellate Tribunal (ITAT Delhi) dismissed the Revenue's appeal against the CIT(A)'s order allowing the assessee's deduction claim under section 10AA of the Income Tax Act for AY 2020-21. The key issue was whether the CIT(A) erred in permitting the deduction of Rs. 11,35,23,563/- on the assumption that the Assessing Officer (AO) had allowed it in the order under section 143(3), despite the initial disallowance by the CPC under section 143(1).The Tribunal noted that the AO's order under section 143(3), passed after scrutiny, did not disallow the 10AA deduction but made a separate disallowance under section 36(1)(va). The CIT(A) correctly observed that the CPC's earlier disallowance under section 143(1) was effectively superseded by the detailed scrutiny assessment under section 143(3). The Tribunal held that the CIT(A) "has taken a correct view" and found no infirmity in the order, emphasizing that the Revenue failed to controvert these facts.Accordingly, the Tribunal upheld the CIT(A)'s order and dismissed the Revenue's appeal, confirming the allowance of the deduction under section 10AA.