Volue Formulation Pvt, Ltd., Lucknow V. ITO-6(1)-New Lucknow, Lucknow

ITA 205/LKW/2022

AI Insights

The case involves Value Formulation P. Ltd., a company engaged in the trading business of medicines, which appealed against the order of the NFAC. The dispute arose from an assessment order that incorrectly stated the assessed income as Rs.18,30,019, despite the Assessing Officer's acceptance of the returned income of Rs.9,38,730 under section 143(3) of the Income Tax Act, 1961. The NFAC dismissed the appeal, leading the assessee to approach the Tribunal. The Tribunal found that the Assessing Officer had erred in recording the assessed income and directed a correction.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123084 (ITAT-LUCKNOW)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 16-04-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 23-11-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: HARISH GIDWANI
• Keywords: Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “SMC”, LUCKNOW BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA No.205/LKW/2022 A.Ys. 2018-19 ITO 6 (1), Lucknow Vs. Value Formulation P. Ltd., Lower Basement, Radiant Apartment, Wazir Hasan Road, Lucknow- 226001 PAN AAECV 2473R (Respondent) (Appellant) Shri Ashok Seth, CA Appellant by Shri Harish Gidwani, DR Respondent by 17/04/2023 Date of hearing 19/04/2023 Date of pronouncement O R D E R This appeal has been preferred by the assessee against the impugned order dated 28.10.2022 passed by the National Faceless Appeal Centre (NFAC), Delhi for A.Y. 2018-19. 2. The brief facts of the case are that the assessee is a company engaged in trading business of sale and distribution of medicines etc. The assessee had filed his return of income, declaring total income of Rs.9,38,730/-. The assessee’s case was selected for scrutiny under CASS for the reason of large sales promotion expenses and, subsequently, the assessment was completed u/s.143(3) of the Income Tax Act, 1961 (hereinafter called ‘the Act’) assessing the total income at Rs.18,30,020/-. The assessment order dated 12.03.2021 specifically mentioned that the returned income of the assessee was being accepted u/s. 143(3) of the Act. 3. Aggrieved, the assessee preferred an appeal before the NFAC and submitted that since the assessment order passed u/s. 143(3) of the Act itself 2 ITA No. 205/Lkw/2022 mentioned that the returned income of the assessee was being accepted, there was an apparent error in the assessment order in as much the assessed income was shown at Rs.18,30,019/- instead of the income of Rs.9,38,730/- as reflected in the computation sheet. However, the NFAC dismissed the appeal of the assessee by noting that there was no evidence and full facts of the case were not before it. 4. Now, the assessee has approached this Tribunal, challenging the impugned order by raising the following grounds of appeal: “1. That the tax should have been charged on the income returned which has been accepted in order u/s 143(3). 2 That the Learned Lower Court did not appreciated the facts and legal aspects of the case and erred in not accepting appeal of the appellant. 3. That when the assessing officer has accepted the Income returned of Rs.9,38,730/- then charging tax on sum of Rs. 18,30,019/- in demand notice is bad in law. That the order passed is against the merit, circumstances and legal aspects of the case. 4. That the appellant seeks permission to modify and/or add any other ground or grounds of appeal as the circumstances of the case might require or justify.” 5. The ld. AR submitted that when the Assessing Officer had accepted the returned income of Rs.9,38,730/-, then completing the assessment at Rs.18,30,019/- was bad in law and that the NFAC had legally erred in dismissing the appeal of the assessee without appreciating the factual aspects of the case. It was prayed that assessee’s appeal be allowed. 6. Per contra, the ld. Sr. D.R., while supporting the order of the NFAC, fairly accepted that the assessee’s contentions appeared to be correct in as much as if the returned income was accepted by the Assessing Officer, the assessed income could not have been enhanced. 3 ITA No. 205/Lkw/2022 7. I have heard the rival submissions and have also gone through the material on record. It is apparent that there has been an error on the part of the Assessing Officer in taking figure of Rs.18,30,019/- as returned income in Paragraph-1 of the assessment order. It is also a fact on record that the Assessing Officer in Pg.2 has specifically mentioned that considering the facts and submissions made by the assessee, the returned income of the assessee is accepted u/s. 143(3) of the Act. Thus, there appears to be no valid reason for taking the figure of Rs.18,30,019/- as the returned income of the assessee when the assessee had returned income only at Rs.9,38,730/-, which is evident from the copy of acknowledgment of income tax return dated 26.10.2018 vide Acknowledgement No.348179841261018. Accordingly, I direct the Assessing Officer to issue a fresh assessment order for the impugned year by taking the returned income of Rs.9,38,730/-. 8. The order of the NFAC is set aside and in the final result, the assessee’s appeal stands allowed. 9. In the result, the appeal of the assessee stands allowed. (Order pronounced in the open court on 19/04/2023) Sd/- (SUDHANSHU SRIVASTAVA) JUDICIAL MEMBER Aks – Dtd. 19/04/2023 4 ITA No. 205/Lkw/2022 Copy of order forwarded to: (1) The appellant (2) The respondent (3) Commissioner (4) Departmental Representative (5) Guard File By order Assistant Registrar