RAMU & CO.,ERODE V. ITO, WARD-1(1), ERODE

ITA 1104/CHNY/2025

AI Insights

The case involves M/s. Ramu & Co., who appealed against the order of the Learned Commissioner of Income Tax (Appeals) regarding the assessment for the year 2023-24. The primary issue was the incorrect addition of an insurance claim amount of ₹19,33,408 due to its duplicate entry in the Tax Audit Report and Income Tax Return. The assessee initially declared 'nil' income and sought a tax refund, but discrepancies between the Tax Audit Report and the return led to a demand raised by the Central Processing Centre. The Tribunal found merit in the assessee's claim of inadvertent error and remanded the matter for re-assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 775015 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2023-2024
• Appeal Filed On: 21-04-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANITHA
• Assessee Lawyers: BHUPENDRAN
• Keywords: Set aside; Revised return
• Section: 28

Judgement Text

"आयकर अपीलीय अिधकरण, ’सी’ \u0001यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI \u0001ी एबी टी. वक , ाियक सद\u0011 एवं एवं एवं एवं \u0001ी अिमताभ शु\u0018ा, लेखा सद क े सम\u001b BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.1104/Chny/2025 िनधा\u000eरण वष\u000e/Assessment Year: 2023-24 M/s. Ramu & Co., 315 Ramu Co. Building, Sathy Road, Karungalpalayam S.O. Erode-638 003. v. The ITO, Ward-1(1), Erode. [PAN: AADFR 0029 H] (अपीलाथ\u0016/Appellant) (\u0017\u0018यथ\u0016/Respondent) अपीलाथ\u0016 क\u001a ओर से/ Appellant by : Mr.Bhupendran, Advocate \u0017\u0018यथ\u0016 क\u001a ओर से /Respondent by : Ms.Anitha, Addl.CIT सुनवाईक\u001aतारीख/Date of Hearing : 16.07.2025 घोषणाक\u001aतारीख /Date of Pronouncement : 04.09.2025 आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)/Addl./JCIT(A)-2, Hyderabad, (hereinafter referred to as ‘Ld.CIT(A)‘), dated 16.02.2025 for the Assessment Year (hereinafter referred to as ‘AY‘) 2023-24. 2. At the outset, the Ld.AR of the assessee submitted that the assessee had filed its Return of Income (RoI) for AY 2023-24 on 28.08.2023 declaring ‘nil’ income and sought tax refund to the tune of Printed from counselvise.com ITA No.1104/Chny/2025 (AY 2023-24) M/s. Ramu & Co. :: 2 :: ₹1,190/-. The return was processed by the CPC u/s.143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘); and finding inconsistency between the Tax Audit Report (TAR) and the return filed by the assessee [assessee had inadvertently declared an amount of ₹19,33,408/- which was received as insurance claim in Sl.No.5(d) of the return whereas in the TAR in Form 3CD reflected the same at two (2) places] the CPC made adjustment and raised a demand of ₹6,98,670/- in its intimation order u/s.143(1) of the Act dated 02.02.2024. The assessee realizing the mistake immediately filed a revised return declaring the said insurance claim of ₹19,33,408/- in Sl.No.5(a) in the return and thereafter, filed the appeal before the Ld.CIT(A), who was of the view that the assessee in the revised ITR on 14.02.2024 has again disclosed the same amount under the same head as disclosed in the original ITR. Additionally ₹19,33,408/- was also disclosed against the “item falling within the scope of Section 28 of the Act”. Thus, the Ld.CIT(A) noted that in the revised return, assessee has disclosed the total amount of ₹38,66,816/- under the heading “amount not credited to P & L account” against total amount of ₹19,33,408/- disclosed in the original ITR under the same head. Therefore, the Ld.CIT(A) was pleased to dismiss the appeal of the assessee. Before us, the Ld.AR submitted that for AY 2023- 24, the assessee’s firm had filed its original RoI on 28.08.2023 declaring Printed from counselvise.com ITA No.1104/Chny/2025 (AY 2023-24) M/s. Ramu & Co. :: 3 :: ‘nil’ income and in its ITR, it declared insurance claim receipt of ₹19,33,408/- as under: PART A-OTHER INFORMATION 5. Amounts not credited into the Profit and Loss Account being, a) the items falling within the scope of section 28 ---- Nil b) - c) - d) Any other item of income ₹19,33,408 f) Total amounts not credited into P&L A/c ₹19,33,402 SCHEDULE BP - COMPUTATION OF INCOME FROM BUSINESS OR PROFESSION 23. Any other item or items of addition under section 28 to 44DB ₹19,33,408 3. However, while uploading the TAR in Form 3CD, the same insurance claim was reflected in duplicate in two (2) places as under: 16. Amounts not credited to the Profit and Loss account being, a) the items falling within the scope of section 28 [Insurance Claim] ---- ₹19,33,408/- b) - c) - d) any other item of income [Insurance Claim] ---- ₹19,33,408/- 4. The CPC taking note of the mismatch between the Sl.No.5(a) of Part Other Information (OI) of the ITR and Sl.No.16(a) of the TAR has made the addition of ₹19,33,408/-. According to the Ld.AR, the double entry of the insurance claim receipt led to the CPC making an addition of Printed from counselvise.com ITA No.1104/Chny/2025 (AY 2023-24) M/s. Ramu & Co. :: 4 :: ₹19,33,408/- was due to inadvertent mistake which the Ld.CIT(A) couldn’t appreciate and therefore, prayed that the matter may be remanded to the file of the Jurisdictional Assessing Officer [JAO] and given an opportunity, the assessee would be able to show before the JAO that this was an inadvertent error while filing the ITR & TAR. 5. Per contra, the Ld.DR supported the action of the Ld.CIT(A) and he does not want us to interfere. 6. Having heard both parties and after perusal of the records, we note that the assessee firm had filed its original RoI on 28.08.2023 declaring ‘nil’ income and in its ITR declared insurance claim receipt of ₹19,33,408/- under Sl.No.5(a) of part other information of the ITR and showed in the Schedule-BP under Sl.No.A-23 [any other item or items of addition u/s.28 to 44DB] ₹19,33,408/- and also in its TAR in Form 3CD the insurance claim was reflected in duplicate in two (2) places as noted supra. Taking note of the mismatch, the CPC has made an addition of ₹19,33,408/- and thereafter, the assessee is noted to have filed revised return wherein also the same mistake has been repeated which is attributed to the complexity of software. Be that as it may, in the light of Article 265 of the Constitution, in the interest of justice and fair play, we set aside the impugned action of the Ld.CIT(A) and restore the issue before the JAO and direct him to verify the return as well as the claim of Printed from counselvise.com ITA No.1104/Chny/2025 (AY 2023-24) M/s. Ramu & Co. :: 5 :: the assessee [duplication of insurance claim in two (2) places] and thereafter, if it is found that due to inadvertent error, the assessee had shown the same insurance claim at two (2) places, then the addition may be deleted. Needless to say, if the assessee fails to make out its claim of duplication as discussed (supra), then the AO is at liberty to make addition as intimated by the CPC. 7. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced on the 04th day of September, 2025, in Chennai. Sd/- (अिमताभ शु\u0018ा) (AMITABH SHUKLA) लेखा सद\u0003य/ACCOUNTANT MEMBER Sd/- (एबी टी. वक ) (ABY T. VARKEY) \u0005याियक सद\u0003य/JUDICIAL MEMBER चे ई/Chennai, !दनांक/Dated: 04th September, 2025. TLN आदेश क\u001a \u0017ितिलिप अ$ेिषत/Copy to: 1. अपीलाथ /Appellant 2. \u000e\u000fथ /Respondent 3. आयकरआयु\u0015/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय\u000eितिनिध/DR 5. गाड फाईल/GF Printed from counselvise.com "