M/s H & H Technologies Pvt. Ltd., Chandigarh V. The ACIT, Circle 4(1), Chandigarh

ITA 650/CHANDI/2022

AI Insights

The case involves M/s H & H Technologies Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The primary issues in the appeal were the incorrect income figure used by the Assessing Officer in the assessment order and the incorrect tax rate applied. The appellant argued that the income reported in the tax return was Rs. 96,09,580/-, but the Assessing Officer recorded it as Rs. 98,01,407/-. Additionally, the tax was incorrectly calculated at 30% instead of the applicable 25%, given that the company's turnover was less than Rs. 50 crores in the relevant financial year. The Tribunal found merit in the appellant's arguments and directed corrections to be made in the assessment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127607 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 27-03-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 06-10-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 154; 250

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ “ए” , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH ी आकाश द प जैन, उपा य एवं ी #व$म &संह यादव, लेखा सद+य BEFORE: SHRI. AAKASH DEEP JAIN, VP & SHRI. VIKRAM SINGH YADAV, AM ITA NO. 650/Chd/ 2022 Assessment Year : 2018-19 M/s H & H Technologies Pvt. Ltd. SCO 198-200, Sector 34, Chandigarh- 160034 The Additional/Joint/Deputy/Assistant CIT, Delhi PAN NO: AAATI6009F Appellant Respondent ! " Assessee by : Shri Vineet Krishan, Advocate # ! " Revenue by : Smt. Amanpreet Kaur, Sr. DR $ % ! & Date of Hearing : 28/03/2023 '()* ! & Date of Pronouncement : 05/04/2023 आदेश/Order PER VIKRAM SINGH YADAV, A.M. : This is an appeal filed by the assessee against the order of Ld. CIT(A), NFAC, Delhi dt. 29/08/2022 pertaining to A.Y. 2018-19 wherein the assessee has taken the following grounds of appeal: 1. That the order dated 29.08.2022 passed under section 250 by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi in Appeal No. ITBA/NFAC/S/250/2022-23/1045012958(1) is contrary to law and facts of the case. 2. That in the facts and circumstances of the case Learned Commissioner of Income Tax (Appeals) gravelly erred in not adjudicating on the submissions made by the appellant and passed the order without application of mind to the facts of the case. 3. That in the facts and circumstances of the case Learned Commissioner of Income Tax (Appeals) gravelly erred in upholding the action of the ld. Assessing Officer who has taken the business income at Rs. 98,01,407/- as against Rs. 96,09,581/- shown in the Income Tax Return. 2 4. That in the facts and circumstances of the case Learned Commissioner of Income Tax (Appeals) gravelly erred in upholding the action of the ld. Assessing Officer who had calculated the tax @ 30% instead of applicable tax @ 25% as the turnover of the appellant-company for the Financial Year 2015-16 was less than Rs. 50 crore. 5. That the appellant craves to add, amend or alter any ground of appeal before or at the time of hearing of appeal, with the permission of the Hon'ble Income Tax Appellate Tribunal, Chandigarh. 2. During the course of hearing, the Ld. AR submitted that the assessee filed its return of income on 06/10/2018 declaring total income of Rs. 96,09,580/- and tax was calculated @ 25% as the turnover of the assessee was less than Rs 50 crores. The case of the assessee was selected for limited scrutiny and the Assessing officer accepted the return of income and no disallowance or addition was made. However while computing the income, the AO has wrongly taken the figure of returned income of Rs. 98,01,407/- instead of actual figure of Rs. 96,09,580/- and further, the tax has already been wrongly calculated @ 30% instead of 25%. 2.1 It was submitted that the assessee raised this contention before the Ld. CIT(A) as well. However appeal of the assessee was dismissed stating that the assessee may move an application u/s 154 before the AO as there seems to be a case of a typing error. 3. Against the said findings and the direction of the Ld. CIT(A), the assessee has come in appeal before the Tribunal. 4. It was submitted by the ld AR that since there was no adjustment/disallowance done by the AO while passing the assessment order, there was no mechanism provided in the IT portal to move a rectification application and hence the only recourse available with the assessee was to move an appeal before the Ld. CIT(A). However the same has been dismissed without deciding the contention raised by the assessee. In support of his 3 contention, the Ld. AR taken us through the copy of the return of income wherein the gross total income has been shown at Rs. 96,09,581/- where as in the computation sheet attached to the assessment order passed under section 143(3) dt. 23/07/2020, the income from business or profession has been taken at Rs. 98,01,407/-. Further, our reference was drawn to the relevant provisions of the Finance Act, 2018 and the assessee’s financial statements for the previous financial year 2015-16 wherein total revenues have been shown as Rs 44,84,96,108/- and it was submitted that where the total revenues are less than Rs 50 crores in the previous financial year 2015-16, the applicable tax rate for the impugned assessment year 2018-19 is 25% instead of 30%. 5. The Ld. DR is heard who has relied on the order of the lower authorities. 6. We have heard the rival contention and perused the material available on the record. We find that there is clearly a mistake which is apparent from the record wherein the returned income as shown by the assessee in its return of income at Rs. 96,09,581/- has been wrongly taken by the AO at Rs. 98,01,407/- while determining the taxable income in the hands of the assessee even though in the body of the assessment order, the returned income has been accepted. Given this undisputed fact, the contention so advanced by the Ld. AR is accepted and the AO is directed to consider the income as per the returned income at Rs. 96,09,581/- instead of Rs. 98,01,407/-. 7. Further, as regards the determination of appropriate tax rate, the relevant provisions of the Finance Act, 2018 read as under: THE FIRST SCHEDULE (See section 2) PART I INCOME-TAX Paragraph A ..... Paragraph B 4 ..... Paragraph C ..... Paragraph D ..... Paragraph E In the case of a company, - Rates of income-tax I. In the case of a domestic company,- (i) where its total turnover or the gross receipt in the previous year 2015-2016 does not exceed fifty crore rupees: 25 per cent. of the total income (ii) other than that referred to in item (i) 30 per cent. of the total income. II. In the case of a company other than a domestic company,- (i) on so much of the total income as consists of, - (a) royalties received from Government of an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31 st day of March, 1961 but before the 1 st day of April, 1976; or (b) fees for rendering technical services received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 29 th day of February, 1964 but before the 1 st day of April, 1976, and where such agreement has, in either case, been approved by the Central Government (ii)on the balance, if any, of the total income 50 per cent,: 40 per cent. Surcharge on income-tax The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 of the Income-tax Act, shall, be increased by a surcharge for the purposes of the Union calculated.- (i) in the case of every domestic company.- (a) having a total income exceeding one crore rupees but not exceeding ten crore rupees, at the rate of seven per cent. of such income-tax: and 5 (b) having a total income exceeding ten crore rupees, at the rate of twelve per cent. of such income-tax: (ii) in the case of every company other than a domestic company.- (a) having a total income exceeding one crore rupees but not exceeding ten crore rupees, at the rate of two per cent. of such income-tax; and (b) having a total income excceding ten crore rupees, at the rate of five per cent. of such income-tax: Provided that in the case of every company having a total income exceeding one crore rupees but not exceeding ten crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees: Provided further that in the case of every company having a total income exceeding ten crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax and surcharge on a total income of ten crore rupees by more than the amount of income that exceeds ten crore rupees. 8. In light of aforesaid provisions, the tax rate for the impugned assessment year 2018-19 has to be determined taking into consideration the total turnover or gross receipt shown by the assessee company during the financial year 2015-16 and where the same doesn’t exceed Rs 50 crores, the tax rate is 25%. In the instant case, as per the assessee’s financial statements for the previous financial year 2015-16 available on record, total revenues have been shown at Rs 44,84,96,108/- and being less than the threshold of Rs 50 crores in the previous financial year 2015-16, the applicable tax rate for the impugned assessment year 2018-19 is 25% instead of 30%. We accordingly find merit in the contention of the ld AR that the tax rate has been wrongly determined at the rate of 30% as against 25% as the total revenues so reported by the assessee for the financial year 2015-16 is less than Rs 50 Crores and the AO is accordingly directed to re- compute the tax liability taking into consideration the tax rate of 25% instead of 30%. 6 9. In the result, appeal of the assessee is allowed. Order pronounced in the open Court on 05/04/2023. Sd/- Sd/- आकाश द प जैन #व$म &संह यादव (AAKASH DEEP JAIN) ( VIKRAM SINGH YADAV) उपा य / VICE PRESIDENT लेखा सद+य/ ACCOUNTANT MEMBER AG Date: 05/04/2023 ( + ! , - . - Copy of the order forwarded to : 1. The Appellant 2. The Respondent 3. $ / CIT 4. - 0 ग 2 3 & 2 3 456 ग7 DR, ITAT, CHANDIGARH 5. ग 6 8 % Guard File ( + $ By order, 9 # Assistant Registrar