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Facts
The assessee, engaged in trading shares and mutual funds, filed its income tax return for AY 2021-22. The CPC processed the return under section 143(1) but disallowed a MAT credit of Rs. 87,161, creating a demand of Rs. 99,570. The assessee's rectification application was rejected, and an appeal to the CIT(A) was dismissed.
Held
The Tribunal observed that the issue involved the grant of MAT credit paid in earlier years, and the assessee should not be denied this credit due to a typographical error in filing the return. The Tribunal held that the disallowance was incorrect.
Key Issues
Whether the assessee is eligible for the carry-forward MAT credit of Rs. 87,161 when it was inadvertently not claimed due to a typographical error in the return, and if the disallowance by CPC and NFAC was justified.
Sections Cited
250 of the Income Tax Act, 1961, 143(1) of the Income Tax Act, 154 of the Act, 115JB, 246A of the Act
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PATNA BENCH AT KOLKATA
Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2021-22 dated 23.06.2023, which has been passed against the intimation order u/s 143(1) of the Act, dated 16.12.2022. I.T.A. No.: 258/PAT/2023 Assessment Year: 2021-22 Rainbow Estates Pvt. Ltd.
The assessee is in appeal before the Tribunal raising the following grounds of appeal:
“1. For that the Ld. National faceless appeal centre (NFAC) erred in not allowing the credit of mat in the return of Income.
For that the Ld. CIT(A) has erred in rejecting the submission of the appellant, as it could be noted that there is no fresh or new claim by the appellant but the error has occurred only due to wrong filling of columns/schedule in Income Tax Return forms. The ignorance/mistake of the appellant could not jeopardize a valid claim of the appellant. The object of the assessment is to determine correct income of the appellant and revenue could not gain out of errors committed by the appellant.
For that the Ld. CIT(A) has erred in passing a vague and cryptic order.
For that the Ld. CIT(A) has erred in passing the order without giving the opportunity of being heard which is against the principle of natural justice.
For that whole order is bad in fact and the law of the case and is fit to be quashed.
For that other grounds, if any, shall be urged at the time of hearing of the appeal.”
Brief facts of the case as appearing in Form-35 filed before the Ld. CIT(A) are that the assessee is a private limited company carrying on business of trading of shares and mutual fund. The assessee had filed the return of Income on 05.09.2022 showing total income of Rs. 11,58,970/-. The CPC before processing the return, sent a communication on 24.08.2022 for demand of Rs. 99,570/- and processed the return u/s 143(1) of the Act on the same date but had not given the MAT credit of Rs. 87,161/- thereby creating demand of Rs. 99,570/-. The assessee filed rectification application u/s 154 of the Act on 16.12.2022 but the same was rejected by CPC on the same date. The assessee filed the appeal against the processing of the return before the Ld. CIT(A) but vide order dated 23.06.2023, the appeal of the assessee was dismissed without allowing sufficient opportunity of being heard to the assessee. It is stated that the assessee’s rectification I.T.A. No.: 258/PAT/2023 Assessment Year: 2021-22 Rainbow Estates Pvt. Ltd. request was denied even though there was no fresh or new claim by the assessee but the error had occurred only due to wrong filling of columns/schedule in Income Tax Return forms. The ignorance/mistake of the assessee could not jeopardize a valid claim of the assessee. The Ld. CIT(A) vide the impugned order and after considering the detailed written submission of the assessee, dismissed the appeal by mentioning that in “Part B-TTI-Computation of tax liability on total income” of the ITR, the assessee had not claimed any such amount on account of MAT credit, which is evident from Sr.No.4 of Part B-TTI of the ITR extracted. The finding of the Ld. CIT(A) is as under:
“4. 1. Brief facts of the case are that the appellant, a domestic company, had filed its return of income for AY.2021-22 on 31.12.2021 showing a total income of Rs.11,58,970/-. The return was processed u/s.143(1) on 24 08.2022 accepting the returned income as such. However, the appellant contends that while computing the tax liability thereon, CPC did not allow the sum of Rs.87.161/- being carry forward MAT credit. Hence, the present appeal.
Perusal of the return of income filed by the appellant shows that in "Part B - TTI - Computation of tax liability on total income' of the ITR, the appellant has not claimed any such amount on account of MAT credit, which is evidenced from Sr.No.4 of Part B - TTI of the ITR extracted hereunder: I.T.A. No.: 258/PAT/2023 Assessment Year: 2021-22 Rainbow Estates Pvt. Ltd.
Though the appellant claims that it has duly filled in the Schedule MATC in the ITR, it is clearly seen that in the computation of tax liability, the appellant has mentioned the credit of MAT as per Schedule MATC as ‘0’, thus resulting in the computation of tax liability accordingly by CPC.
In the automated processing under the scheme of CPC, any such mismatch is likely to result in the necessary adjustments while processing the return u/s. 143(1) of the Act. Therefore, the clear mentioning of MAT credit u/s.115JAA as ‘0’ in computation of tax liability by the appellant has been accepted as such by CPC and no adjustment has been made on its own on this issue. Therefore, the intimation issued u/s.143(1) does not show any adjustment being made u/s.143(1) which can be appealed against under Section 246A of the Act and hence the Grounds taken by the appellant on this issue do not succeed.
In the result, appeal is “Dismissed”.”
Before us the assessee has made the submission as under: “The solitary issue which requires the adjudication before the Hon'ble ITAT bench is grant of MAT Credit of Rs. 87161.00 which was disallowed by the CPC while proceeding the return. The NFAC also erred in confirming the disallowance of MAT credit of Rs. 87161 which is brought forward amount. The appellant prays for the issue of MAT credit, necessary directions may be given to the assessing officer to verify the credit available from the past returns. The appellant is also relevant pages of ITR filed on 10/01/022 Schedule-MATC showing the MAT credit of Rs. 87161 utilized for the year and balance being carried forward. (Page no.23-27) The similar issue of the sister concern of the appellant has been decided on the similar lines by the National Faceless Appeal Center (copy of the appeal order is enclosed at page no. 8-11 & 18-21 of PB).”
Rival contentions were heard and the submissions made have been examined. Considering the contentions and the submission made, we are of the considered view that since the issue involves grant of credit I.T.A. No.: 258/PAT/2023 Assessment Year: 2021-22 Rainbow Estates Pvt. Ltd. for the MAT paid in the earlier years, the assessee should not be denied the credit for the tax paid in accordance with the provision of the Act merely because a typographical error had inadvertently crept in while filing the return of income. Hence, the issue of allowing credit for MAT is hereby remanded to the Ld. AO and is the Ld. AO is directed to verify the record and allow the MAT credit to the assessee as per law.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 12th February, 2025. [Sonjoy Sarma] [Rakesh Mishra] Judicial Member Accountant Member Dated: 12.02.2025 Bidhan (P.S.) I.T.A. No.: 258/PAT/2023 Assessment Year: 2021-22 Rainbow Estates Pvt. Ltd. Copy of the order forwarded to:
Rainbow Estates Pvt. Ltd., Bhartiya Palace Bandar Bagicha Fraser Road, Patna, Bihar, 800001. 2. CPC, Bangalore.
CIT(A)-NFAC, Delhi.
CIT-
CIT(DR), Patna Bench, Patna.
Guard File. //// By order