GUJARAT AGRO INDUSTRIES CORPORATION,GANDHINAGAR V. THE DCIT, CIRCLE-2(1)(1), AHMEDABAD

ITA 901/AHD/2024

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The case involves a Government Organization that filed a return of income based on provisional accounts, declaring an income of Rs.23,14,67,690. However, after the accounts were audited, the actual income was determined to be Rs.21,31,72,139. The assessee requested the AO to consider the audited figures, but the AO refused, citing the absence of a revised return. The CIT(A) upheld the AO's decision, leading to the assessee's appeal. The tribunal set aside the CIT(A)'s order and directed the AO to reassess the income based on the audited accounts.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470428 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2020-2021
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 143(3)

Judgement Text

"ITA No.901/Ahd/2024 4 accurately computing their real income and ensuring the collection of legitimate taxes. If an assessee commits a mistake, whether due to ignorance or out of inadvertence, the income tax authorities are supposed to help him to arrive at the correct income and determine the correct tax liability. Income-tax authorities are not of penal of penal jurisdiction to punish the assessee for their bona fide mistakes. Under the circumstances, a duty was cast upon the AO to consider the submissions of the assessee made during the assessment proceedings, and assess the correct and actual income of the assessee, and charge the legitimate taxes. However, both the lower authorities have failed to exercise their jurisdiction vested in them. In view of this, the impugned order of the ld.CIT(A) is set aside. Matter is restored to file of the AO with direction to consider the averments made by the assessee regarding its actual/real income. The assessee will file the reconciliation statement, audited financial statements as well as computation of income vide which the income was provisionally computed, and bring out mistake/differences before the AO. The AO will verify the same. If the claim of the assessee is found to be justified, then no addition should be made, irrespective of the fact that the assessee has earlier declared higher income in the return of income. 8. With the above observations, the appeal of the assessee is treated as allowed for statistical purpose. Order pronounced in the Court on 20th March, 2025 at Ahmedabad. Sd/- Sd/- (Makarand V. Mahadeokar) Accountant Member (Sanjay Garg) Judicial Member Ahmedabad,dated 20/03/2025 ITA No.901/Ahd/2024 2 2. The Ld AO has erred in law as well as on the facts by adjusting a sum of Rs.1,50,000 pertaining to AY 2018-19 out of the refund of AY 2020-21, which has already been paid on 17/12/2021. Your appellant prays for a refund of Rs.1,50,000. 3. The ld.AO has erred in law as well as on the facts by recovering for a sum of Rs.65,26,729 towards a penalty u/s.270A of the IT Act whereas the hearing of said appeal with CIT(A) is in process. Your appellant prays to refund the said amount and recover only after appeal file in this context before CIT(A) would be finalised.” 3. Brief facts of the case are that the assessee is a Government Organization. It filed return of income at Rs.23,14,67,690/-, which was, thereafter, selected for scrutiny assessment under section 143(3) of the Act. During the assessment proceedings, the assessee pleaded before the AO that it had filed return of income on the basis of estimated income as per the provisional accounts. However, the assessee being a Government organization, has to get its accounts audited from a Government auditor; that there was some delay on the part of the Government auditor to audit the accounts of the assessee concerned. The ld.counsel for the assessee submitted after filing the return based on the estimated income, the accounts of the assessee have been audited, and as per the audited accounts, the income of the assessee for the year under consideration came to Rs.21,31,72,139/- instead of income of Rs.23,14,67,690/- as per the provisional accounts, which was the amount of income initially returned in the income tax return. The assessee, therefore, pleaded before the AO that the actual income of the assessee as per the audited accounts was Rs.21,31,72,139/- be assessed and not the income declared and reflected in the return of income filed. The AO, however, did not agree with the aforesaid contentions raised by the assessee. He held that the assessee itself has declared income of Rs.23,14,67,690/- in the return of income, and no revised return was filed by the assessee. He therefore refused to go through "