ITAT allows deduction for employment of new workmen u/s 80JJAA by way of submission despite not filing revised return of income.Â
In a recent judgment, ITAT Rajkot has upheld the order of the CIT(A) allowing deduction respect of employment of new workmen u/s. 80JJAA claimed by way of submission and not by way of filing revised return of income.
ABCAUS Case Law Citation:
4367 (2025) (01) abcaus.in ITAT
In the instant case, the Income Tax Department had challenged the order passed by the CIT(A), NFAC in allowing deduction in respect of employment of new workmen u/s. 80JJAA of the Income Tax Act, 1961 (the Act) claimed by the assessee by way of submission before him and not by way of filing revised return of income.
The respondent assessee company for the relevant Assessment Year filed its return of income after claiming deductions under chapter VI-A of the Act. Subsequently, the case was selected under Scrutiny through CASS and accordingly notice u/s 143(2) of the Act was issued. Further, notice u/s 142(1) along with questionnaire was issued, where in the assessee was asked to justify the deduction under chapter VI-A of the income Tax Act.
In response to the above show cause notices, the assessee submitted that at the time of filing return of income, assessee- company had claimed deductions u/s 80JJAA. The assessee revised computation of income and filed revised ITR form before the assessing officer, after incorporating said deduction with a request to accept the revised return of income and allow the claim of deductions.
However, the assessing officer rejected the claim of the assessee. The assessing officer observed that the claim of deduction u/s 80JJAA of the Act was made by the assessee, during the course of assessment proceedings. Further, according to the AO, revised return filed by the assessee was not depicting on e-filing site of ITBA.
The AO held that since the assessee had not filed any revised return for claiming of deduction u/s 80JJAA of the Act, there is no provision under the Income Tax Act, to make amendment in the return of income, by making an application at the assessment stage without revising the return of income originally filed, therefore, the assessee’s claim was rejected by the assessing officer.
For this, the assessing officer relied on the judgement of Hon’ble Supreme Court wherein the Hon’ble Apex Court has held that claim for a deduction not made in the return cannot be entertained by A.O. otherwise than by filing a revised return.
Aggrieved by the order of the assessing officer, the assessee carried the matter in appeal before the CIT(A), who allowed the appeal of the assessee. The CIT(A) observed that appellate authorities may entertain a fresh claim of the assessee, provided the claim of the assessee is law full. The CIT(A) noticed that the appellant had filed chart showing details of employees with first and last date of employment during the year under consideration, chart showing details employees provident fund or provident fund of new employees and Form no. 10DA to substantiate the claim of deduction. From the documents filed, the appellant fulfilled the criteria for the claim of deduction u/s. 80JJA of the Act, therefore, CIT(A) allowed the claim of the assessee.
Before the Tribunal, the Revenue argued that the assessing officer without filing the revised return, cannot allow the deduction and cannot entertain a fresh claim of the assessee. Since with repect to deduction u/s 80JJA only a letter was filed before the assessing officer by the assessee, showing the claim of deduction under section 80JJAA of the Act, therefore, assessing officer was not supposed to entertain the fresh claim as per the judgment of the Hon’ble Supreme Court of India.
The Tribunal observed that in the judgment relied upon by the Revenue, Supreme Court had further clarified that the issue raised was limited to the power of assessing authority and did not impinge on the power of the tribunal.
The Tribunal further observed that in the instant case also, the appellate forum had entertained the claim made by the assessee and allowed the same. There was no dispute that the claim/deduction towards the expense was otherwise correct and allowable.
Therefore, in view of the above, the Tribunal opined that the fresh claims made by the assessee, as allowed by the CIT(A), has to be sustained.
Accordingly, ground raised by the revenue were dismissed.
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