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2022 (12) TMI 866 - AT - Income TaxDisallowance made by the CPC in an intimation issued u/s. 143(1) denying the exemption claimed u/s. 11 - Assessee plea as entitled for exemption u/s. 10(23C)(vi) as per the deemed approval - CIT-A dismissed the appeal of the assessee by observing that as there is no order granting approval u/s. 10(23C)(vi) i.e. produced by the assessee from the competent authority, the appeal filed by assessee against the CPC intimation dated 04/02/2019 was rejected - HELD THAT:- In the mechanism of application of Section 143(1) for the relevant assessment year, we find that, the first proviso to Section 143 (1) mandates that “no adjustments” except for arithmetical mistakes and/or an incorrect claim that is apparent from any information in the return. The scope of permissible adjustments under section 143(1)(a) for the relevant year is much narrower. Hon’ble Bombay High Court in case of Khatau Junkar Ltd. v. K.S. Pathania [1992 (2) TMI 67 - BOMBAY HIGH COURT] has observed that, where a claim has been made which requires further inquiry, it cannot be disallowed without hearing the parties and/or giving the party an opportunity to submit proof in support of its claim. In the absence of section 143(1)(a) being read in the above manner i.e. debatable issues cannot be adjusted by way of intimation under section 143(1)(a), would lead to arbitrary and unreasonable intimations being issued, leading to chaos. In the instant case we also note that no opportunity was granted to the assessee to put forth its stand before disallowing the deduction claimed. The issue in the present appeal is debatable and therefore the revenue was not right on their part to unilaterally proceed by disallowing the claim. In the interest of justice, we remand this issue back to Ld.AO to grant opportunity of being heard to assessee in a physical hearing and to consider the claim in accordance with law.
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