Appeal can be filed against wrong appeal effect given by Assessing Officer

Brief Facts

1. The assessee has filed return of income declaring income of Rs.80,62,76,210/-, Assessing Officer disallowed the deduction claimed under sect ion 80P (2) (d) amounting to Rs.2,91,55,456/-. The assessee filed appeal against the said assessment order before the CIT (A), who has upheld the order of AO. Against the said order assessee preferred an appeal before ITAT. ITAT remanded back the matter to the Assessing Officer for the purpose of determining the quantum of deduction available to the assessee under sect ion 80P(2) (d) of Act.

2. Thereafter, AO has disallowed the deduction claimed under sect ion 80P(2) (d) of the Act amounting to Rs.1,18,81,092/- (20% of the gross dividend and interest earned) assuming the same to be the expenditure incurred by the assessee for earning the dividend and interest income from co-operative institutions. Assessee has again preferred an appeal before CIT (A) against the order of AO, who after considering the provisions of sect ion 14A of the Act as well as section 57 of the Act directed the Assessing Officer to compute the quantum of deduction admissible to the assessee under sect ion 80P(2) (d) of the Act by taking into consideration only the expenses incurred by way of commission /remuneration paid to the banker or any other person for realizing dividend or Interest income.

3. The Assessing Officer while giving appeal effect to the order of the learned CIT (A) applied the provisions of section 14A of the Act. The assessee feeling aggrieved against these findings of the AO preferred appeal before the learned CIT (A). CIT (A) dismissed the appeal of the assessee by stating that the appellant has moved an appeal against appeal effect order by the A.O. The appellant is aggrieved with the computation of disallowance U/s 14A read with Rule 8D. The right course for the appellant is to move a rectification application U/s 154 before the Assessing Officer. No appeal lies against Appeal Effect Order passed wrongly U/s 250/154 of the Income Tax Act by the Assessing Officer. Hence, appeal file by the assessee “not maintainable against the appeal effect order passed by the Assessing Officer”.

Issue

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