Case Number: ITA 1/DEL/2021
Appellant: AAR ESS Exim Pvt Ltd, New Delhi
Respondent: DCIT, CPC, Bangalore
Assessment Year: 2018-19
Case Filed On: 2021-01-01
Order Type: Final Tribunal Order
Date of Order: 2022-12-08
Pronounced On: 2022-12-08
In the case of AAR ESS Exim Pvt Ltd vs. DCIT, CPC, Bangalore, the appellant, AAR ESS Exim Pvt Ltd, challenged the disallowance of exemption under Section 10AA of the Income Tax Act, 1961 for the assessment year 2018-19. The case was heard by the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘A’ on 8th December 2022, with the final order pronounced on the same day.
The appeal arose from the order passed by the Commissioner of Income-tax (Appeals)-1, New Delhi, dated 11th September 2020. The appellant was represented by Sh. S. K. Chaturvedi, CA, while the respondent was represented by Sh. Kanv Bali, Sr. DR. The primary grievance of the appellant was the disallowance of exemption under Section 10AA amounting to Rs. 72,29,052/-, which was claimed under Section 10B in the Income Tax Return (ITR) due to a typographical error.
The appellant raised several grounds of appeal:
The ITAT bench, comprising Sh. C. M. Garg (Judicial Member) and Sh. N.K. Billaiya (Accountant Member), addressed each issue as follows:
The bench noted that the appellant had claimed deduction under Section 10B instead of Section 10AA in its return of income due to a typographical error. The CPC declined to entertain the rectification application, stating that fresh claims could not be changed in a rectification application. The CIT(A) dismissed the appeal, suggesting that the only way to correct the error was by filing a revised return.
The ITAT observed that even if the CPC declined the rectification application, the CIT(A) had the authority to consider the claim of the appellant. The bench restored the issue to the files of the AO, directing the AO to verify the claim of the appellant under Section 10AA as per the relevant provisions of the law and to decide the issue afresh after giving a reasonable and sufficient opportunity of being heard to the appellant.
The grounds raised by the appellant were allowed for statistical purposes.
The ITAT’s decision highlights the need for a thorough and fair review of tax assessments and appeals, ensuring that typographical errors in filing do not unjustly penalize taxpayers. By restoring the issue to the AO, the tribunal emphasized the importance of due process and the provision of a fair opportunity for the appellant to present their case.
Order Pronounced: In the open court on 8th December 2022.
Bench: Sh. C. M. Garg (Judicial Member) and Sh. N.K. Billaiya (Accountant Member)
Copy forwarded to:
Date of Hearing: 8th December 2022
Date of Order: 8th December 2022
The appellant, AAR ESS Exim Pvt Ltd, filed an application on 1st January 2021 against the order dated 11th September 2020 by the CIT(A), challenging the disallowance of exemption under Section 10AA for the assessment year 2018-19 due to a typographical error in the ITR.
The tribunal considered the appellant’s arguments and decided to remit the issues back to the AO for verification and fresh adjudication, ensuring that the appellant is given an adequate opportunity to present their case and file a proper application for the claim under Section 10AA.
The tribunal’s decision underscores the importance of accurate and fair assessment procedures in tax matters, allowing taxpayers to correct errors and provide necessary documentation to substantiate their claims.
Overall, the ITAT’s order serves as a reminder of the need for thorough and fair consideration in tax appeals, ensuring that all parties are given a fair chance to present their case and that decisions are made based on a complete review of all relevant facts and circumstances.
AAR ESS Exim Pvt Ltd vs. DCIT CPC: Disallowance under Section 10AA for AY 2018-19
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