This case, officially recorded as ITA No. 1797/Del/2022, involves Honda India Power Products Ltd, based in New Delhi, as the appellant, and the Deputy Commissioner of Income Tax, Circle-10(1), also based in New Delhi, as the respondent. The case concerns the assessment year 2020-21 and revolves around the alleged improper disallowance of a gratuity provision which resulted in a substantial financial discrepancy.
The appeal was lodged against the first appellate order issued by the Commissioner of Income Tax (Appeals) – National Faceless Appeal Centre (NFAC), Delhi. This order arose from an intimation dated December 27, 2021, passed under section 143(1) of the Income Tax Act, 1961 by the Centralized Processing Centre (CPC), which led to the controversy in question.
The tribunal, after considering the evidence and arguments presented, found merit in the appellant’s claim of a double disallowance. The tribunal highlighted the necessity of providing the appellant an opportunity to explain the situation before any adjustment, as mandated by law. Consequently, the matter was remanded back to the assessing officer for re-evaluation, with instructions to rectify any errors found regarding the gratuity provision’s disallowance.
The case was finally pronounced on October 6, 2023, by Judicial Member Sh. Chandra Mohan Garg and Accountant Member Sh. Pradip Kumar Kedia. The outcome allows the appeal for statistical purposes, setting aside the intimation for the assessment year 2020-21 and restoring the issue concerning the double disallowance of the gratuity provision to the assessing officer for fresh assessment.
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