PRAGATHI POLYPLAST INDIA PVT LTD,MEDAK V. INCOME TAX OFFICER, WARD-16(1), HYDERABAD

ITA 1192/HYD/2024

AI Insights

The case involves Pragathi Polyplast India Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals), Chennai, concerning the assessment year 2013-14. The primary issue was the addition of Rs.13,75,665 to the assessee's income, which the assessee contested, claiming that the expenses were reported correctly in the ITR form but were not visible due to a technical error. The CIT(A) upheld the additions, leading to the appeal before the Tribunal. The Tribunal found inconsistencies in the CIT(A)'s dismissal of the appeal on technical grounds rather than merits and directed a reexamination of the case by the Assessing Officer.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 28995 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SM-B
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SRIKANTH REDDY Y
• Assessee Lawyers: M.V. ANIL KUMAR
• Keywords: Set aside; Revised return
• Section: 154; 143(1); 139(5)

Judgement Text

" आयकर अपीलीय अधिकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad SM ‘B’ Bench, Hyderabad Before Shri Manjunatha G., Accountant Member and Shri K.Narasimha Chary, Judicial Member आ.अपी.सं /ITA No.1192/Hyd/2024 (निर्धारण वर्ा/Assessment Year: 2013-14) Pragathi Polyplast India Pvt. Ltd. Medak [PAN :AABCP8115D] Vs. Income Tax Officer Ward-16(1) Hyderabad (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri M.V.Anil Kumar रधजस् व द्वधरध/Revenue by: Shri Srikanth Reddy Y, DR सुिवधई की तधरीख/Date of Hearing: 22/01/2025 घोर्णध की तधरीख/Date of Pronouncement: 04/02/2025 आदेश / ORDER PER. MANJUNATHA G., A.M: This appeal filed by the assessee is directed against the order dated 19.09.2024 of the learned Commissioner of Income Tax (Appeals) [Ld.CIT(A)], Chennai, pertaining to A.Y.2013-14. 2. The brief facts of the case are that, the assessee is engaged in the business of manufacturing plastic drums and barrels filed its return of income for the A.Y.2013-14 on 31.10.2013, admitting total income of Rs.11,48,920/-. The return of income was processed by CPC u/s 143(1) of Income 2 ITA No.1192/Hyd/2024 Pragathi Polyplast India Pvt.Ltd. Tax Act, 1961 (“the Act”), after adding an amount of Rs.13,75,665/- to the returned income and assessed total income at Rs.25,24,583/- vide intimation u/s 143(1) dated 14.03.2015 and the said intimation was received by the assessee by mail on 20.10.2016. The assessee has filed online, a rectification application on 17.02.2021 and the application filed by the assessee has been rejected by the CPC on 05.03.2021 on the ground that, there is no prima facie error and further right of rectification has been transferred to the jurisdictional Assessing Officer (JAO). Thereafter, the assessee has filed petition u/s 154 of the Act before the JAO on 27.04.2021 and the petition filed by the assessee has been rejected on the ground that, it is barred by limitation, as it is filed after four years. The assessee filed an appeal against the order passed u/s143(1) dated 14.03.2015 and challenged the additions made by the Assessing Officer/CPC, towards other expenses of Rs.13,75,665/-, on the ground that the assessee has reported the said expenses in ITR Form in column 38. However, the particulars are not appearing in the inner column of the form, but, totalling of other expenses was shown at Rs.9619,684/-. But, the Assessing Officer , considering only three items reported in column 38, assumed that there is difference between expenses incurred by the assessee and claimed in the ITR and added back difference to the total income. The Ld.CIT(A) after considering the relevant submissions of the assessee, upheld the additions made by the Assessing Officer/CPC, on the ground that the assessee could have 3 ITA No.1192/Hyd/2024 Pragathi Polyplast India Pvt.Ltd. disclosed all the expenditure under the head ‘other expenditure’ and claimed in ITR. Further, the assessee could have filed revised return of income and rectified the mistake. Since the assessee has not availed the opportunities available in the Act, by filing revised return or application u/s 154 of the Act, within time period, the pleading of the assessee, that a direction may be given to the Assessing Officer to consider the rectification application filed before the Assessing Officer to rectify the mistake is not as per law and therefore, rejected the explanation of the assessee and dismissed the appeal. 3. Aggrieved by the order of the Ld.CIT(A), the assessee is now in appeal before the Tribunal. 4. The learned counsel for the assessee submitted that the Ld.CIT(A) erred in dismissing the appeal filed by the assessee on different grounds, even though the assessee has challenged the order passed by the Assessing Officer u/s 143(1) of the Act dated 14.03.2015, received on 20.10.2016. The learned counsel for the assessee, further, referring to paper book filed by the assessee, explained the inconsistencies in other expenditure, reported in ITR form in inner columns and outer column and argued that because of the technical errors, other expenses reported in ITR form is not visible, however, total of expenditure is matching with the expenditure claimed by the assessee, as per the financial statement filed for the relevant assessment 4 ITA No.1192/Hyd/2024 Pragathi Polyplast India Pvt.Ltd. year. Therefore, he submitted that for verifying the facts, the matter may be remanded back to the JAO. 5. Ld.Sr.AR on the other hand, supporting the order of the Ld.CIT(A), submitted that, the assessee has reported incorrect expenditure in ITR form filed for the assessment year in question. Further, the assessee could have filed rectification application within the time allowed under the Act. Since the assessee could not explain the difference in expenditure reported under ‘other expenditure’ and further the application filed by the assessee is barred by limitation, the Ld.CIT(A) has rightly rejected the appeal filed by the assessee, therefore the order of the Ld.CIT(A) should be upheld.. 6. We have heard both the parties, perused the material on record and gone through the orders of the authorities below. There is inconsistency in the grounds raised by the assessee before the Ld.CIT(A) and the finding given by the Ld.CIT(A) in his appellate order dated 19.09.2024, which is evident from para 1 of Ld.CIT(A) order and subsequent finding given in para 4.1 to 4.6. Admittedly, the assessee has filed appeal against the order u/s 143(1) dated 14.03.2015 received on 20.10.2016 and this fact has been admitted by the Ld.CIT(A) in para 1 and also condoned the delay in filing of the appeal. However, while adjudicating the issue, the Ld.CIT(A) dismissed the appeal filed by the assessee on a different ground that the application filed by the assessee u/s 154 is beyond four years from the end of 5 ITA No.1192/Hyd/2024 Pragathi Polyplast India Pvt.Ltd. the relevant assessment year and therefore, not maintainable and further, the assessee should have rectified the mistake by filing the revised return u/s 139(5) of the Act. In our considered view, the Ld.CIT(A) grossly erred in dismissing the appeal filed by the assessee on different ground, even though the challenge before the Ld.CIT(A) by way of grounds of appeal of the assessee is on additions made towards difference in other expenditure reported in ITR form. In our considered view, the Ld.CIT(A), having admitted the appeal filed by the assessee against the order passed u/s 143(1) dated 14.03.2015, should have decided the issue involved on merits instead of dismissing the appeal on technical grounds. Further the issue before the Ld.CIT(A) is challenge for 143(1) order, but not for the order passed u/s 154 of the Act, because, the assessee has filed separate appeals before the Ld.CIT(A) against the order passed by the Assessing Officer u/s 154 of the Act dated 27.04.2021 by filing separate appeal and the same is yet to be disposed of by the first appellate authority. Therefore, in our considered view, to this extent, the findings given by the Ld.CIT(A) to dismiss the appeal filed by the assessee is correct. 7. Having said so, let us come back to the issue on hand. Admittedly, the Assessing Officer/CPC made additions of Rs.13,75,665/- on the ground that the expenditure reported under column 38 is at Rs.82,44,019/-, whereas, the assessee has reported total expenditure at outer column for Rs.96,19,484/-. Admittedly, the facts are not in dispute. If we 6 ITA No.1192/Hyd/2024 Pragathi Polyplast India Pvt.Ltd. go by the ITR form, there is difference between the amount reported in inner column and outer column of the form. But according to the assessee, even though it has reported various expenditures in column 38, but because of technical error, the expenditure reported in inner column is not appearing. However, only total of such expenditure is appearing in outer column 38 of the form. The assessee had also filed details of other expenses of Rs.13,75,665/-. We find that, going by the e- filing system of ITR form, the moment the assessee enters particulars of expenditure in inner column, the sum of total will automatically appear in outer column of the form. There is no need for the assessee to separately enter expenditure in outer column. If we go by such analysis, the arguments of the assessee appears to be bonafide. Therefore, we are of the considered view that the matter needs reverification from the Assessing Officer, in light of the reconciliation filed by the assessee, along with financial statements for the relevant assessment year. The Ld.CIT(A), having noticed the difference, ought to have considered the plea of the assessee. Since the Ld.CIT(A) has summarily dismissed the appeal filed by the assessee on different grounds and further, there is bonafide contention of the assessee, in so far as the errors in reporting requirement of ITR form, in our considered view, the matter needs to go back to the file of the Assessing Officer for verification. Thus, we set aside the order of the Ld.CIT(A) and restore the issue back to the file of the JAO for reconsideration of the issue in light of reconciliation filed by the assessee. We 7 ITA No.1192/Hyd/2024 Pragathi Polyplast India Pvt.Ltd. direct the Assessing Officer to reexamine the claim of the assessee, after providing reasonable opportunity of hearing to the assessee. 8. In the result, appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the Open Court on 4th February, 2025. Sd/- Sd/- (K.NARASIMHA CHARY) JUDICIAL MEMBER (MANJUNATHA G.) ACCOUNTANT MEMBER Hyderabad, Dated 4th February, 2025 L.Rama, SPS Copy to: S.No Addresses 1 M/s Pragati Polyplast India Private Limited, 9/2B, Phase- 1, IDA, Pashamailaram, IDA, Pashamailaram, Medak 2 The Income Tax Officer, Ward-16(1), Hyderabad 3 The Pr.CIT, Hyderabad 4 The DR, ITAT Hyderabad Benches 5 Guard File By Order "