PRASHANT SARAWGI HUF, MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX, CPC, MUMBAI

ITA 942/MUM/2023

AI Insights

The case involves two appeals by different Hindu Undivided Families (HUFs) against orders from the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, concerning the Assessment Year 2015-16. The primary issues in both appeals were the non-granting of credit for advance tax paid and the incorrect taxation of interest income from Religare Credit Advisors LLP. The Tribunal found that the income from Religare Credit Advisors LLP had already been taxed and should not be declared again by the assessee. Consequently, the Tribunal directed the Assessing Officer to adjust the taxable income accordingly.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123836 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 13-06-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 23-03-2023
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income
• Section: 154; 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “SMC”, MUMBAI BEFORE SHRI PAVAN KUMAR GADALE, HON'BLE JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, HON'BLE ACCOUNTANT MEMBER ITA NO. 941/MUM/2023 (A.Y: 2015-16) S.N. Sarawagi HUF 4 th Floor, 85 Pitale Prasad Worli Sea Face, Worli Mumbai - 400030 PAN: AAOHS0741N v. Income Tax Officer – Ward – 21(3)(2) Piramal Chambers, Lalbaug Mumbai – 400 012 (Appellant) (Respondent) ITA NO. 942/MUM/2023 (A.Y: 2015-16) Prashant Sarawgi HUF Shiv Smriti Chambers, 49A Dr. Annie Besant Road Mumbai - 400018 PAN: AAEHP9323D v. ACIT (CPC) Post Bag No. 2 Electronic City Post Office Bangalore - 560100 Karnataka (Appellant) (Respondent) Assessee Represented by : Ms. Vinita Shah Department Represented by : Ms. Kavita Kaushik Date of Conclusion of Hearing : 14.06.2023 Date of Pronouncement : 23.08.2023 ITA NOs. 941 & 942/MUM/2023 (A.Y: 2015-16) S.N. Sarwagi HUF & Prashant Sarawgi HUF Page No. | 2 O R D E R PER S. RIFAUR RAHMAN (AM) 1. These appeals are filed by different assessees of same family/entity against different orders of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter in short “Ld.CIT(A)”] dated 23.11.2021 and 25.08.2021 for the A.Y. 2015-16. 2. Since the issues raised in both these appeals are identical, therefore, for the sake of convenience, these appeals are clubbed, heard and disposed off by this consolidated order. ITA.NO. 941/MUM/2023 (A.Y. 2015-16) 3. Brief facts of the case are, assessee is Hindu Undivided Family (HUF), filed its return of income on 24.08.2015 declaring total income of ₹.7,63,540/- and the same was processed u/s. 143(1) of Income-tax Act, 1961 (in short “Act”) showing demand of ₹.1,391/-. The demand was raised due to non-granting of credit of advance tax of ₹.3,44,567/- as claimed by the assessee in return of income. Subsequently, assessee filed a rectification request before the jurisdictional Assessing Officer and the ITA NOs. 941 & 942/MUM/2023 (A.Y: 2015-16) S.N. Sarwagi HUF & Prashant Sarawgi HUF Page No. | 3 assessee was issued order u/s. 154 of the Act without giving the credit of advance tax. 4. Aggrieved with the above order assessee preferred an appeal before the Ld.CIT(A) and before the Ld.CIT(A), assessee raised grounds that Assessing Officer erred in not giving credit of advance tax of ₹.3,43,180/- paid by Religare Credit Advisors LLP on behalf of the assessee and at the same time another ground was raised for treating the interest income declared by the assessee from Religare Credit Advisors LLP as taxable income instead of exempt income. 5. After considering the submissions of the assessee, Ld.CIT(A) remitted the issue back to the file of the Assessing Officer to verify the claim of the assessee towards advance tax from Form – 26AS. Since CIT(AU) does not have access to the assessee’s Form – 26AS, whereas Assessing Officer has access to verify from Form – 26AS. Accordingly, Assessing Officer was directed to give the credit after due verification of Form – 26AS. Subsequently, the assessee followed the same with the Assessing Officer, however, Assessing Officer rejected the same while order giving effect of the order of Ld.CIT(A) with the observation that there is no credit available in Form – 26AS. ITA NOs. 941 & 942/MUM/2023 (A.Y: 2015-16) S.N. Sarwagi HUF & Prashant Sarawgi HUF Page No. | 4 6. Aggrieved with the above order assessee preferred an appeal before us and raised following grounds in its appeal: - “1. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in giving direction to the Learned Assessing Officer to give the credit of advance tax of Rs.3,44,567/- after due verification of 26AS, without appreciating the fact that the said advance tax was not reflected in the 26AS of the appellant. 2. The appellant craves leave to add, amend, alter or delete the said ground of appeal.” 7. At the outset, we observe that assessee has preferred this appeal before us with a delay of 426 days and filed delay condonation and affidavit before us. After considering the same we are inclined to condone the delay based on the reasons submitted before us in the form of affidavit and found to be reasonable. Accordingly, we proceed to hear the appeal on merits. 8. At the time of hearing, Ld. AR of the assessee brought to our notice the facts already available on record and also filed copy of return of income wherein assessee has declared interest income which includes interest from Religare Credit Advisors LLP of ₹.11,06,375/- along with other rental income and other sources. Assessee also filed a letter from ITA NOs. 941 & 942/MUM/2023 (A.Y: 2015-16) S.N. Sarwagi HUF & Prashant Sarawgi HUF Page No. | 5 Religare Credit Advisors LLP acknowledging the payments of interest and remittance of due taxes on behalf of assessee, same is placed on Paper Book. 9. On the other hand, Ld. DR relied on the orders of the lower authorities. 10. Considered the rival submissions and material placed on record, we observe that assessee has participated in the investment Scheme-I of Religare Credit Advisors LLP and assessee has earned interest income of ₹.11,06,375/-. After careful consideration of letter submitted by Religare Credit Advisors LLP we observe that they have represented u/s.160(1)((iv) of the Act as a Trustee and declared the income earned on behalf of assessee and paid the due tax. From the declaration submitted by the Religare Credit Advisors LLP, the income earned by the assessee was declared as the income of the above LLP and paid the due tax on behalf of the assessee. It clearly shows that income of the assessee was already declared by them and paid the due tax on behalf of the assessee. Therefore, it is not proper on the part of the assessee to declare the same in one more time in their return of income and claim the advance tax paid by the Religare Credit Advisors LLP as credit. Since the income was ITA NOs. 941 & 942/MUM/2023 (A.Y: 2015-16) S.N. Sarwagi HUF & Prashant Sarawgi HUF Page No. | 6 already declared and due tax was already paid assessee should not have declared the interest income earned from the Religare Credit Advisors LLP in their return of income. Therefore, the mistake is apparent on record and we direct the Assessing Officer to remove the interest income earned by the assessee from Religare Credit Advisors LLP from the return of income filed by the assessee and accordingly, recalculate the taxable income in the hands of the assessee without disturbing the other income and expenditure claimed by the assessee. With the above observation, we direct the Assessing Officer to rework the taxable income after giving opportunity of bearing heard to the assessee. 11. In the result, appeal filed by the assessee is allowed for statistical purpose. ITA.No. 942/Mum/2023 (A.Y. 2015-16) 12. Coming to the appeal in the case of “Prashant Sarawgi HUF” in ITA.No. 942/Mum/2023 for the A.Y. 2015-16, since facts in this appeal are mutatis mutandis to the case of “S.N. Sarawagi HUF” for the A.Y.2015-16, therefore the decision taken in “S.N. Sarawagi HUF” for the A.Y. 2015-16 is applicable mutatis mutandis to this appeal also. ITA NOs. 941 & 942/MUM/2023 (A.Y: 2015-16) S.N. Sarwagi HUF & Prashant Sarawgi HUF Page No. | 7 Accordingly, the appeal filed by the assessee is allowed for statistical purpose. 12. To sum-up, both the appeals filed by the assessees are allowed for statistical purpose. Order pronounced in the open court on 23 rd August, 2023. Sd/- Sd/- (PAVAN K UMAR GADALE) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai / Dated 23/08/2023 Giridhar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// BY ORDER (Asstt. Registrar) ITAT, Mum