HOMAG INDIA PRIVATE LIMITED,BENGALURU V. DCIT, CIRCLE-3(1)(3), BENGALURU

SA 72/BANG/2024

AI Insights

Homag India Private Limited filed a stay application against the Deputy Commissioner of Income Tax concerning an outstanding demand of Rs.2,09,41,033 for the assessment year 2021-22. The demand arose from the non-granting of set off for brought forward losses and unabsorbed depreciation in the assessment order dated 10.10.2024. The Tribunal noted that if the rectification application were to be considered, the demand could potentially be nullified. The Deputy Commissioner acknowledged technical glitches preventing the rectification but requested additional details from the assessee, which were already provided. The Tribunal found that the assessee should not be required to pay the tax demand due to these technical issues and directed the Deputy Commissioner to expedite the rectification process.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 397926 (ITAT-BANGALORE)
• Appeal Type: Stay Application
• Pronouncement Date: 02-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2021-2022
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Rectification of order; Unabsorbed depreciation; Application of stay
• Section: 143(3); 154

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH : BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT AND SHRI KESHAV DUBEY, JUDICIAL MEMBER SP No.72/Bang/2024 [in IT(TP)A No.2299/Bang/2024] Assessment year : 2021-22 M/s. Homag India Private Limited, Plot No.285, Rajadhani Industrial Park, Road No.7, KIADB, 4th Phase, Dabaspet Industrial Area, Billenkote Village, Bengaluru – 562 111. PAN: AABCH 4923P Vs. The Deputy Commissioner of Income Tax, Circle 3(1)(3), Bengaluru. APPLICANT RESPONDENT Applicant by : Shri Tata Krishna, Advocate Respondent by : Shri Amith Doreraju, Addl. CIT(DR)(ITAT), Bengaluru. Date of hearing : 30.05.2025 Date of Pronouncement : 02.06.2025 O R D E R Per Prashant Maharishi, Vice President 1. This Stay Application is filed by Homag India Private Limited (the assessee/applicant) in IT(TP)A No. 2299/Bang/2024 for the assessment year 2021-22 seeking direction to keep in abeyance recovery of outstanding demand of Rs.2,09,41,033 arising out of the assessment order passed u/s. 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income-tax Act, 1961 [the Act] dated 10.10.2024. 2. The order sheet entry dated 06.12.2024 states that the ld. AR submitted that this outstanding demand has arisen because of (i) non-granting of SP No.72/Bang/2024 Page 2 of 4 set off of brought forward loss and (ii) not allowing unabsorbed depreciation. He further states that MAT credit is also available to the assessee of Rs.239 lakhs. It was further stated that rectification application u/s. 154 of the Act dated 28.11.2024 was filed on 02.12.2024. which has not been disposed of. He submits that if the same is disposed of and above 3 issues are considered, there would not be any demand on the assessee. Therefore, assessee deserves stay of demand completely. 3. Accordingly, on that date the Bench directed the ld. AO to dispose of the rectification application on or before 31.1.2025. When the stay application was heard on 21.3.2025, the ld. DR submitted that the AO, Ward 3(2)(1), Bangalore has submitted by letter dated 7.3.2025 that due to technical glitch, rectification order could not be passed. By that letter it was also stated that assessee has also been requested to submit some additional details for business loss and depreciation allowance. As soon as these details are received, the rectification order would be passed. 4. The ld. AR submits that in the letter dated 7.3.2025 itself, the details of losses and depreciation are shared with CPC, therefore nothing is required to be submitted from the side of the assessee. 5. The ld. DR submitted that rectification is pending with CPC and therefore till that time, the assessee may be directed to deposit the tax. 6. We have carefully considered the rival contentions and perused the assessment order. We have also perused the report of the AO dated 7.3.2025 wherein it was submitted that the details of income, brought SP No.72/Bang/2024 Page 3 of 4 forward losses are submitted to the CPC for computation, but the same was not carried out because of some technical glitches. By looking at the Schedule-BFLA it is apparent that brought forward loss set off and brought forward depreciation set off are not granted to the assessee. If these 2 set offs are granted, there would be no tax payable by the assessee. This fact has not been denied by the ld. DR or the ld. AO. As the rectification process could not be carried out because of some technical glitches, it has been admitted by the ld. AO that the assessee cannot be directed to pay tax because of this. In view of this, we direct the ld. AO to keep recovery of the impugned demand of Rs.2,09,41,033 in abeyance till the disposal of the appeal, which is fixed for hearing on 16.7.2025, or 180 days from the date of this order, whichever is earlier. We also direct the ld. AO to dispose the rectification application as soon as possible. As the appeal of the assessee is fixed for hearing on 16.7.2025, the assessee is also directed not to seek adjournment on unreasonable grounds and make endeavour to get the appeal disposed of at the earliest. 7. In view of the above, the Stay Petition filed by the assessee is allowed as indicated above. Pronounced in the open court on this 02nd day of June, 2025. Sd/- Sd/- ( KESHAV DUBEY ) ( PRASHANT MAHARISHI ) JUDICIAL MEMBER VICE PRESIDENT Bangalore, Dated, the 02nd June, 2025. /Desai S Murthy / SP No.72/Bang/2024 Page 4 of 4 Copy to: 1. Applicant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. DR, ITAT, Bangalore. By order Assistant Registrar ITAT, Bangalore. "