SHIV PRAKASH MOHPAL,JAIPUR vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 4 JAIPUR, JAIPUR

Honourable commissioner of Income tax Appeal has erred in rejecting the application for condonation of delay.

The honourable commissioner of Income tax Appeal has erred in not deciding the appeal on merit and allowing deduction under Sec.90 amounting to Rs. 22,43,100.00. 3. On the facts and in the circumstances of the case this appeal should be decided on merits as the same tax which has already been paid in USA cannot be recovered twice.

Any other ground which may be taken at the time of appeal.

The brief facts of the case are that the assessee filed his return of income on 05.08.20214 declaring total income at Rs. 91,10,560/-. The case of the assessee was selected for limited scrutiny under CASS. During the assessment proceedings it was noticed by the AO that the assessee has claimed deduction of tax amount under section 90 of the Act amounting to Rs. 22,43,100/-. As per the AO the assessee has not furnished any evidence to substantiate this claim of Rs. 22, 43,100/-. Hence, the same was rejected and consequential amount of demand with tax raised against the assessee (although return income was accepted) the assessee being aggrieved preferred the appeal before the ld. CIT (A) who in turn dismissed the appeal of the assessee on the ground of delay, as there was a delay of 753 days in filing of appeal. The assessee being further aggrieved preferred the present appeal before us.

We have gone through the order of the AO, order of the ld. CIT (A) and submissions of the assessee. It is observed from the document filed before us that after the assessment order the assessee filed two applications u/s. 154 of the Act vide dated 09.01.2017 and 20.09.2018 relying on Board’s Circular No. 4 of 2012

As the assessee has relied upon Board’s Circular No. 4 of 2012 dated 20.06.2012, we deem it fit to reproduce the same to verify the applicability of the same in the case of the assessee as under:- 119 OF THE INCOME-TAX ACT, 1961 - INCOME-TAX AUTHORITIES - INSTRUCTIONS TO SUBORDINATE AUTHORITIES - AUTHORIZATION OF AOs IN CERTAIN CASES TO RECTIFY/RECONCILE DISPUTED ARREAR DEMAND CIRCULAR NO. 4 OF 2012, DATED 20-6-2012 The Board has been apprised that in certain cases the assessees have disputed the figures of arrear demands shown as outstanding against them in the records of the Assessing Officer. The Assessing Officers have expressed their inability to correct/reconcile such disputed arrear demand on the ground that the period of limitation of four years as provided under sub-section (7) of section 154 of the Act has expired. Further, in some cases, the Assessing Officers have uploaded such disputed arrear demand on the Financial Accounting System (FAS) portal of Centralized Processing Centre (CPC), Bengaluru which has resulted in adjustment of refund arising out of processing of Returns against such arrear demand which has been disputed by such assessees on the grounds that either such demand has already been paid or has been reduced/ eliminated in the appeals, etc. The arrear demands, in these cases also were not corrected / reconciled for the reason that the period of limitation of four years has elapsed. 2. The Board, in consideration of genuine hardship faced by the abovementioned class of cases, in exercise of powers vested under section 119(2)(b) of the Act, hereby authorize the Assessing Officers to make appropriate corrections in the figures of such disputed arrear demands after due verification/reconciliation and after examining the same on merits,

We have gone through the circular relied upon by the assessee and reproduced (supra). Vide para 2 (in bold) it is categorically discussed and mentioned to deal with the cases like that of the assessee. It is found that the AO misinterpreted the above circular and dismissed the application of the assessee filed u/s.154 of the Act. If this application of the assessee would have been allowed earlier by the AO u/s. 154 of the Act, this issue would have been reached to its logical and legal conclusion.

As far as the decision of the ld. CIT (A) is concerned, as mentioned (supra) the appeal was delayed by 753 days hence dismissed in limine. Although the ld. CIT (A) also discussed the assessment order as well as the communications and order u/s. 154 of the Act. As far as the delay is concerned no doubt the period of delay is extra-ordinary but we took note of assessee’s application u/s. 154 of the Act and disposal thereafter by the AO (which is grossly wrong) and ultimately, the substantive right of the assessee is being defeated i.e. demand not enforceable/collectable imposed on the assessee. In view of this, especially when this fact was there on the record of ld. CIT (A) also, he should have been allowed the appeal of the assessee on merits after condonation of delay.

We have gone through the documents filed by the assessee issued by the Internal Revenue Service, United States Department of the Treasury. Which confirms the deductions of tax there and consequential claimed in India u/s. 90 of the Act. It is further observed that in the Assessment Year 2015-16 the claim of the assessee u/s. 90 of the Act has been accepted by the department even in absence of any evidence and rather mentioned therein that the same will be reversed in case any adverse information is received.

In view of above facts and considering the assessment order for Assessment Year 2015-16 we do not have any hesitation in allowing the grounds raised by the assessee by setting aside the order of the Ld. CIT(A) and the AO. The AO is directed to allow the claim of the assessee amounting to Rs. 22, 43,100/- u/s. 90 of the Act.

In the result, the appeal of the assessee is allowed.

अपीलाथ /The Appellant , 2. ितवादी/ The Respondent. 3. आयकर आयु CIT 4. िवभागीय ितिनिध, आय.अपी.अिध., Sr.DR., ITAT, 5. गाड फाइल/Guard file.