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Facts
The assessee's tax return for AY 2022-23 was processed by CPC, resulting in an intimation order under Section 143(1) making additions/disallowances. These included rejecting a deduction claim of INR 5.31 Cr for indirect taxes under Section 43B and adding INR 9.57 Cr for re-measurement of a defined benefit plan. The CIT(A) partly allowed the appeal but upheld these disallowances, prompting the assessee's appeal to the Tribunal.
Held
The Tribunal deleted the disallowance of INR 5.31 Cr, ruling that the CPC failed to issue proper notice under Section 143(1)(a) before making the adjustment. It also deleted the INR 9.57 Cr addition for the defined benefit plan, accepting the assessee's argument that the amount was already offered for tax, and the CPC's addition led to double taxation. The Assessing Officer was directed to re-compute tax liability, and the interest under Section 234B was deemed consequential.
Key Issues
1. Whether disallowance under Section 43B for indirect taxes was valid without proper notice under Section 143(1)(a). 2. Whether the addition for re-measurement of defined benefit plan resulted in double taxation. 3. Re-computation of tax liability and consequential interest under Section 234B.
Sections Cited
Section 143(1), Section 43B, Section 145(2), Section 234B
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Income Tax Appellate Tribunal, C BENCH, MUMBAI
2024 31.12.2024 Per Rahul Chaudhary, Judicial Member:
By way of the present the Assessee has challenged the order, dated 15/04/2024, passed by the Additional / Joint Commissioner of Income Tax (A)-1, Vadodara [hereinafter referred to as the `CIT(A)'] whereby the Ld. CIT(A) had partly allowed the appeal preferred by the Assessee against the Intimation Order, dated 29/07/2022, issued under Section 143(1) of the Income Tax Act, 1961 [hereinafter referred to as `the Act'] for the Assessment Year 2022-2023. 2. The Appellant has raised following grounds of appeal: (a) Ground No.1 (1.1 to 1.4) and Ground No.5 pertain to rejection of claim of deduction of INR.5,31,52,923/- Section 43B of the Act in respect of indirect taxes paid by the Assessee (b) Ground No.2 (2.1 to 2.4) pertains to addition of INR.9,57,84,365/- on account of re-measurement of defined benefit plan (c) Ground No.3 pertains failure of CIT(A) to adjudication the ground raised by the Assessee in relation to incorrect calculation of tax payable (d) Ground No.4 pertains to non-grant of personal hearing through video conferencing (e) Ground No.6 relates to incorrect levy of interest under Section 234 B of the Act
Heard both the sides and perused the material on record.
The relevant facts, as emerging from the record, are that return filed by the Assessee for Assessment Year 2022-2023 was picked up for processing by the Central Processing Centre (CPC) and notice, dated 14/12/2022, was issued to the Assessee requiring submission of response to the following issues: (a) inconsistency in any sum received from employees as contribution to any provident fund or superannuation fund or any fund set up under ESI Act or any other fund for the welfare of employees to the extent not credited to the employees account on or before the due date [36(1)(va)] claimed in return in schedule Ol and audit report. (b) inconsistency in amount mentioned in return at Sl. No. 5(d) of Part A - Ol "Any other item of income" and Tax Audit Report (c) inconsistency in amount mentioned at Sl. No. 3(a) of Part A-OI "Increase in the profit or decrease in the loss because of deviation, if any, as per Income Computation Disclosure Standards notified under Section 145(2) in return as compared to amount mentioned in clause 13(e) of the audit report.
The Assessee submitted response to the above notice vide reply letter dated 04/01/2023 [copy placed at page 216-217 of the Paper- Book].
Subsequently an Intimation Order, dated 29/07/2023, was issued under Section 143(1) of the Act whereby the following additions/disallowances were made to the returned income of the Assessee on account of: (a) rejection of claim of deduction of INR.5,31,52,923/- in terms of Section 43B of the Act in respect of indirect taxes paid (b) addition of INR.9,57,84,365/- on account of re-measurement of defined benefit plan
Being aggrieved, the Assessee went in appeal before the CIT(A) against the above said Intimation Order, dated 29/07/2023, issued under Section 143(1) of the Act. The CIT(A) disposed off the said appeal as partly allowed vide order dated 15/04/2024. The CIT(A) declined to grant any relief in relation to the above addition/disallowance on the ground that the Assessee had failed to avail the opportunity to furnish supporting documents.
The Assessee is now in appeal before the Tribunal challenging the order of the CIT(A).
We have given thoughtful consideration to the rival submissions. Ground No. 1 (1.1. to 1.4) & 5
On perusal of documents placed before us as part of the paper-book furnished by the Assessee, we find that the Assessee had filed submissions before the CIT(A). We note that in the return of income for AY 2022-2023, the Assessee had claimed a deduction amounting to INR.5,31,52,923/- under Section 43B of the Act as `any amount disallowed under Section 43B in any preceding previous year but allowable during the previous year'. The aforesaid amount represented Central Sales Tax ('CST'), Entry Tax ('ET