PORTESCAP INDIA PRIVATE LIMITED,MUMBAI vs. CENTRALIZED PROCESSING CENTRE, BANGALORE, BANGALORE

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ITA 2230/MUM/2024Status: DisposedITAT Mumbai19 November 2024AY 2019-20Bench: SHRI. ANIKESH BANERJEE (Judicial Member), SMT. RENU JAUHRI (Accountant Member)1 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal observed that the Assessing Officer (AO) had nullified the demand by issuing a rectification order under Section 143(1)/154 of the Act. Therefore, no demand remained outstanding against the assessee as per the rectification order. Consequently, the demands upheld in the impugned appellate order could not be sustained.

What were the facts?

The assessee's appeal was filed against the order of the Ld.CIT(A) which confirmed a demand. The original demand was raised by the CPC under section 143(1) for disallowance of notional rent, disallowance of re-measurement benefit and deferred tax. Subsequently, the assessee filed a rectification petition under section 154, which resulted in the cancellation of the original demand.

What were the issues?

Whether the demand upheld by the Ld.CIT(A) is sustainable when the AO has already nullified the demand through a rectification order?

Which sections of the Income-tax Act were involved?

Section 143(1),Section 139(1),Section 250,Section 154

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “C”, MUMBAI

Before: SHRI. ANIKESH BANERJEE & SMT. RENU JAUHRI

For Appellant: Smt. Chandani Shah &Shri Kinjal
For Respondent: Shri. Krishna Kumar, CIT
Hearing: 14/11/2024Pronounced: 19/11/2024

Instant appeal of the assessee was filed against the order of theLearned Commissioner of Income-tax (Appeals) ADDL/JCIT(A)-4, Bengaluru [for brevity, ‘Ld.CIT(A)’] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), for Assessment Year 2019-20,date of order29.02.2024. The impugned M/s Portescap India Private Limited orderwas emanated from the order of the CPC, Bengaluru(in brevity, ‘the Ld.AO’)passed under section 143(1) of the Act, date of order 28/03/2021.

2.

We heard the rival submission and considered the documents available in the record. The assessee filed the return under section 139(1) of the Act and the return was processed under section 143(1) of the Act. The CPC had raised the demand related to disallowance of notional rent – Rs.4,53,046/-; disallowance of re-measurement benefit on defined plan – Rs.31,69,282/- and deferred tax amount to Rs.16,82,483/-. The aggrieved assessee filed an appeal before the ld. CIT(A). The assessee also filed a rectification petition under section 154 related to rectification of demands as per section 143(1) of the Act. The rectification process was completed, as a result the demandsraised U/s 143(1) was wiped out vide order dated 15/06/2021 by the order U/s 143(1)/ 154 of the Act. On the other hand, the appeal was instituted by the assessee by challenging the order U/s 143(1) on 28/03/2021 was duly processed and exparte order was passed. Finally, the appeal was partly allowed.The Ld.AR filed a written submission which is kept in record. We find the order U/s 143(1)/154 of the Act is annexed in APB pages 268 to 292. The ld. AR stated that in the rectification order all the demands were squared off and there is no demand against the assessee. But on the other side the same demand was confirmed by the Ld.CIT(A) by order U/s 250 of the Act.

We have carefully perused the documents on record. In our considered view, the Ld. AO has nullified the demand by issuing a rectification order under Section 143(1)/154 of the Act. Consequently, no demand remains outstanding against the assessee as per the rectification order of the ld. AO in impugned assessment year. Therefore, the demands upheld in the impugned appellate order cannot be M/s Portescap India Private Limited sustained against the assessee. The Ld. DR has acknowledged this position and accepted the submissions of the Ld. AR. In light of this, the grounds raised by the assessee are allowed, and the impugned appellate order is hereby quashed.

Accordingly, the assessee's appeal is allowed.

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