Revised claim of deduction u/s 80IC allowed without filing revised return

Revised claim of deduction u/s 80IC allowed without revised return Judgment of Supreme Court applies to AO not appellate Authorities

ABACUS Case Law Citation
ABCAUS 3373 (2020) (08) ITAT

Important case law relied upon by the parties:
Goetz India Ltd

In the instant case, the assessee had challenged the order passed by the CIT(A) in confirming the disallowance of revised claim of deduction u/s 80IC of the Income Tax Act, 1961 (the Act.)

The assessee had two eligible units (say unit 1 and unit 2), profit of which was eligible for deduction u/s 80IC of the Act. The assessee had earned profit in Unit No. 1 and has incurred loss in Unit No. 2, but it filed the audit report claiming the net profit/loss of both these units taken together u/s 80IC.

While filing its return of income, the assessee claimed deduction u/s 80IC of the Act after setting off the loss of one unit with the profits of other. The assessee also filed audit report in the form 10CCB along with tax audit report.

During the course of hearing, assessee realised that the loss incurred in one eligible units was not require to be set off against the profit of another eligible unit.

Therefore, during the course of the hearing, the assessee filed a revised report in the form No. 10CCB wherein, deduction was increased.

The Assessing Officer (AO) noted that the assessee had not filed any revised return but had claimed the enhanced deduction by filing a letter. The reason for such revision

However, the AO disallowed the claim for higher deduction in view of decision of the Hon’ble Supreme Court wherein, it had been held that no claim can be entertained by the AO without having revised return filed by the assessee.

The assessee aggrieved with the order of the AO preferred an appeal before the CIT (A) who also confirmed the action of the AO.

The Tribunal noted that the assessee had two eligible units, profit of which was eligible for deduction u/s 80IC of the Act. The assessee had filed the audit report claiming the net profit/loss of both the units taken together u/s 80IC.

During the course of hearing, the assessee filed a letter before the AO claiming enhanced amount of deduction which was rejected following the decision of the Hon‘ble Supreme Court.

The Tribunal stated that it was an admitted  fact  that  assessee  did  not revise its return of income. The decision of the Hon‘ble Supreme Court though  applies to the AO but does not apply to  the appellate authorities.

Thus, the Tribunal opined that the CIT (A) should have considered the claim of the assessee, though not made by the revised return. As it was a simple arithmetic calculation and there was no dispute about the sum involved.

The Tribunal directed the AO to allow the claim of the assessee u/s 80IC of the Act to the extent of profit earned by Unit No. 1. The AO was further directed to not to set off the loss incurred by Unit  No. 2, by reducing the deduction of section 80IC of the Act.

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