PANASONIC CARBON INDIA CO. LTD.,CHENNAI V. DCIT, CIRCLE-1, LTU, CHENNAI

MA 36/CHNY/2025

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The case revolves around the dispute concerning the applicable tax rate for M/s. Panasonic Carbon India Company Ltd. for the assessment year 2018-19. The assessee argued for a lower tax rate of 25%, claiming that excise duty should be excluded from gross receipts as it was recoverable from customers and turnover was accounted for on a net basis. However, the Tribunal rejected this argument, stating that the total turnover or gross receipts must include all income sources, including excise duty and other business incomes, which collectively exceeded Rs. 50 Crores, thus attracting a 30% tax rate. The Tribunal's decision was based on the statutory application of tax rates and the consistent application of a 30% rate from the initial return processing to the demand notice following the rectification order by the Assessing Officer.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 313975 (ITAT-CHENNAI)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-05-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2018-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R. ANITA LD
• Assessee Lawyers: P. UTTAMCHAND JAIN LD
• Keywords: Business income; Rectification of order
• Section: 143(3)

Judgement Text

" आयकर अपीलीय अिधकरण “सी” \u000eा यपीठ चे\u0013ई म\u0016। IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, CHENNAI मा ननीय \u0019ी जॉज जॉज क े., उपा ! एवं मा ननीय \u0019ी मनोज क ुमा र अ'वा ल ,लेखा सद* क े सम!। BEFORE HON’BLE SHRI GEORGE GEORGE K., VP AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM M.A. No.36/Chny/2025 [In ITA No.1084/Chny/2024] (िनधा रण वष / Assessment Year: 2018-19) M/s. Panasonic Carbon India Company Ltd. 77, Old No.35, 3rd floor, Pottpatti Plaza, Nungambakkam High Road, Chennai-600 034. बना म / Vs. DCIT Circle-1, LTU, Chennai. \u0001थायीलेखासं./जीआइआरसं./PAN/GIR No. AAACI-5679-J (अपीलाथ /Appellant) : ( थ / Respondent) अपीलाथ कीओरसे/ Appellant by : Shri P. Uttamchand Jain (CA) - Ld. AR थ कीओरसे/Respondent by : Ms. R. Anita (Addl.CIT) - Ld. DR सुनवाई की तारीख/Date of Hearing : 09-05-2025 घोषणा की तारीख /Date of Pronouncement : 09-05-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. By way of this application, the assessee seeks our indulgence in Tribunal order passed in ITA No.1084/Chny/2024 on 18-11-2024. The bench, in para-4 of the order, rejected application of lower rate of tax as claimed by the assessee as under: - 4. The argument of Ld. AR is that excise duty should be excluded from gross receipts of the assessee on the ground that it is recoverable from customers and turnover is accounted for on net basis. However, this argument could not be accepted since the expression used is ‘total turnover or gross receipts’. No deduction is intended to be granted. Another noteworthy fact is that the assessee does not have any other source of income except business income. The other income has also been assessed as Business 2 Income only. Therefore, even if the argument of Ld. AR is accepted, the applicable rate would still be 30% since the revenue from operations including other income would exceed Rs.50 Crores. Therefore, correct basic rate as applicable to the assessee would be 30% only. The bench thus held that considering the expression ‘total turnover or gross receipts’, the excise duty could not be excluded from turnover. Another finding was that ‘other income’ was also assessed as ‘business income’ only and the revenue from operations including other income would exceed Rs.50 Crores and therefore, the correct basic rate as applicable to the assessee would be 30% only. 2. In the application, it has been stated that it was argued that once the returned income was accepted, the returned tax amount should also be accepted unless there was an error which has to be brought out in the assessment order. Further, in the computation sheet, the rate of 30% has been applied without any reasons. The Ld. AR also raised a plea that ground nos. 4 and 5 have not been adjudicated. The Ld. Sr. DR, on the other hand, stated that correct rates of tax as statutorily applicable has be to be applied. 3. It emerges from the record that the assessee filed return of income for this year on 29-11-2018 which was processed u/s 143(1). Though the assessee claimed lower tax rate of 25% on normal income in its return of income, CPC applied tax rate of 30% in an intimation as issued on 01- 10-2019 raising a demand of Rs.119.88 Lacs against the assessee. The return was subsequently scrutinized u/s 143(3) on 20-02-2021 accepting the returned income. The assessee sought rectification of the same on three grounds viz. (i) Difference in taxable income; (ii) Difference in tax rate applied; & (iii) Omission to give Dividend Distribution Tax (DDT) Credit. The Ld. AO passed rectification order on 12-10-2023 and 3 computed income at Rs.1633.76 Lacs. On this income, tax rate was applied @30% and the demand was revised to Rs.131.98 Lacs. The only issue remained was qua application of correct tax rate. Aggrieved, the assessee preferred further appeal on this issue. The Ld. CIT(A), considering the turnover of the assessee to be more than Rs.50 Crores, upheld application of 30% rate of tax. Against the same, the assessee preferred further appeal wherein the Tribunal rejected the argument of exclusion of excise duty from turnover and also considered the fact that ‘other income’ was assessed as ‘business income’ which would form part of gross receipts. Accordingly, the application of 30% rate of tax was upheld. 4. In the light of above facts, it could be seen that right from processing of return of income by CPC to the stage of demand notice pursuant to rectification order by Ld. AO, the revenue has consistently applied 30% rate of tax as against 25% as claimed by the assessee. The same was in view of the fact that the turnover of the assessee had exceeded Rs.50 Crores. The assessee, in its financial statements, reflected revenue from operations for Rs.51.25 Crores and including other income of Rs.5.90 Crores, the gross receipts were shown as Rs.54.91 Crores which well exceeds threshold limit of Rs.50 Crores. No doubt, the correct tax rates as statutorily applicable are to be applied. If the assessee applies wrong rate of tax in return of income, the revenue is well within its rights to correct the same in the computations even in a case where returned income has been accepted. This was exactly Ground Nos.4 & 5 of the assessee’s appeal. Further, the assessee was given adequate opportunity of hearing to present his grievance during first appeal as well as before Tribunal. Therefore, the plea of Ld. AR do 4 not convince as to make any indulgence in the order in terms of Sec.254(2) of the Act which enable such indulgence to rectify mistakes which are apparent on the face of the order. 5. The application stands dismissed. Order pronounced on 09th May, 2025. Sd/- (जॉज जॉज क े. ) उपा !/VICE-PRESIDENT Sd/- (MANOJ KUMAR AGGARWAL) लेखा सद* / ACCOUNTANT MEMBER चे2ई Chennai; िदनांक Dated : 09-05-2025 DS आदेशकीDितिलिपअ'ेिषत/Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. थ /Respondent 3. आयकरआयु;/CIT Chennai/Coimbatore. 4. िवभागीय ितिनिध/DR 5. गाड@फाईल/GF "