N K INFRA JV,MUMBAI V. ADIT , MUMBAI

ITA 3423/MUM/2025

AI Insights

The case involves an appeal by N K Infra JV against the order of the CIT(A) which confirmed the surcharge and cess levied by the Assessing Officer at the Centralized Processing Centre (CPC). The surcharge was applied at 37% despite the assessee's income being below Rs. 50 lakhs, which is the threshold for surcharge applicability. The CIT(A) upheld the CPC's decision without issuing a notice under section 250 and without considering the correct tax rates and surcharge applicable for the year. The Tribunal found these actions unjust and without authority of law, leading to the decision to allow the assessee's appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711397 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2023-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDRA MOHAN
• Assessee Lawyers: ANISH N SHAH
• Keywords: Opportunity of being heard; Rectification of order
• Section: 234B

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No. 3423/MUM/2025 (AY: 2023-24) (Physical hearing) N K Infra JV 6A, Siddhivayak Chambers, R P Road, Bandra (East), Mumbai-400051. [PAN No. AAEAN3277F] Vs ADIT, CPC, Bengaluru / ITO, Ward-41(1)(3), Mumbai Kautilya Bhavan C-41 to C-43, G Block, Bandra Kurla Complex, Bandra (East), Mumbai – 400051. Appellant / Assessee Respondent / Revenue Assessee by Shri Anish N Shah, CA Revenue by Sh. Surendra Mohan, Sr. DR Date of Institution 15.05.2025 Date of hearing 23.07.2025 Date of pronouncement 23.07.2025 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by assessee is directed against the order of Ld. CIT(A)/ADDL/JCIT(A) dated 30.03.2025 for assessment year (AY) 2023-24. The assessee has raised following grounds of appeal: “1. The learned CIT(A) erred in confirming the action of the learned Assessing Officer (Centralized Processing Centre) with regards to charging a higher surcharge @37% amounting to ₹1,11,269/- and the consequent cess on this surcharge amounting to 4,451/- as against no (NIL) surcharge applicable since the Total Income of the Appellant is below the threshold limit of ₹50 lakhs. Particulars As per Return of Income (₹) As per Intimation order (₹) Remarks Surcharge 0 1,11,269 1. Surcharge was charged @37% in the intimation vide order dated 18/12/2023 vide DIN: CPC/2324/A5/394487065 as against no (NIL) surcharge considered correctly in the Printed from counselvise.com ITA No. 3423/Mum/2025 N K Infra JV 2 Return of Income filed on 29/07/2023 as Total Income is below ₹50 lakhs. 2. Incorrect charging of surcharge resulted into a further increase in the tax liability due to interest u/s 234B & 234C of the Income tax Act 1961. 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in confirming the action of the learned Assessing Officer (Centralized Processing Centre) in consequently assessing the total taxliability at 24,28,475/- by levying a higher surcharge @37% as against total tax liability of ₹3,12,755/- as per the return of income filed. 3. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in confirming the action of the learned Assessing Officer (Centralized Processing Centre) in levying a higher surcharge @ 37% amounting to ₹1,11,269/- without issuing a mandatory intimation as mandated under the First Proviso to Section 143(1)(a) of the Act. He also erred in issuing the intimation u/s 143(1) of the Income tax Act 1961 without considering: a. Tax Rates applicable to the appellant. b. Surcharge chargeable on tax correctly applicable for the year. c. No cess would be chargeable on incorrect surcharge levied. 4. The learned CIT(A) erred in in confirming the action of the learned Assessing Officer (Centralized Processing Centre) in not issuing any show cause notice and not granting an adequate opportunity of being heard while the demand was raised. 5. Your Appellant prays that the surcharge of ₹1,11,269/- along with consequent cess of ₹4,451/- levied in the intimation order is incorrect, bad in law and hence the same may be directed to be deleted. 6. The appellant prays that justice be given. 7. Your appellant craves leave to add to, amend/modify, alter or delete any of the foregoing grounds of appeal.” 2. Rival submissions of both the parties have been heard and record perused. The learned Authorised Representative (ld. AR) of the assessee submits that Printed from counselvise.com ITA No. 3423/Mum/2025 N K Infra JV 3 assessee is a partnership firm. The assessee while filing return of income offered taxable income of Rs. 10,02,420/-. The return was processed by Central Processing Centre (CPC) vide intimation dated 18.12.2023. In the return of income, the assessee claimed refund of Rs. 3,02,290/-. The CPC while processing the return added surcharge @ 37% of Rs. 1,11,269/- and consequent cess on such surcharge of Rs. 4,451/-. Since, return income and assessed income is less than Rs. 50.00 lacs, no surcharge is liveable / applicable on the assessee. Aggrieved by the action of assessee, the assessee filed appeal before ld. CIT(A). The appeal of assessee was dismissed by holding that intimation dated 18.12.2023 has been subsequently rectified and order fresh order dated 30.01.2024 is passed. The ld. AR of the assessee submits that ld. CIT(A) passed order without issuing notice under section 250. Even after alleged rectification order, the surcharge has not been removed/ deleted. Applying higher surcharge rate is unjust and unfair and without authority of law and is liable to be delated. 3. On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the revenue supported the order of lower authorities. 4. I have considered the rival submissions of both the parties and perused the order of lower authorities carefully. On considering the submission of ld. AR of the assessee, I find merit in his submission that neither the surcharge nor additional cess is applicable as returned income as well as assessed income of assessee is less than Rs. 50.00 lacs. Further, the appeal of assessee was dismissed without allowing any opportunity to the assessee. Thus, the appeal of assessee is accepted and jurisdictional assessing officer is directed to Printed from counselvise.com ITA No. 3423/Mum/2025 N K Infra JV 4 remove / delete the surcharge and additional cess levied on the assessee. In the result, grounds of appeal are allowed in the order. 5. In the result, the appeal of the assessee is allowed. Order was pronounced in the open Court on 23/07/2025 at the time of hearing. Sd/- PAWAN SINGH JUDICIAL MEMBER MUMBAI, Dated 23/07/2025 Biswajit Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order Assistant Registrar ITAT, Mumbai Printed from counselvise.com "