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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI ABY T VARKEY, HON’BLE & SHRI S. R. RAGHUNATHA, HON’BLE
आदेश /O R D E R
PER S. R. RAGHUNATHA, ACCOUNTANT MEMBER:
This appeal by the assessee is filed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, for the assessment year 2012-13, vide order dated 02.11.2023.
The brief facts are that, the assessee is a private limited company filed its return of income for the assessment year
:-2-: ITA. No: 1565/Chny/2023 2021-22 on 31.01.2022. The return of income was processed u/s. 143(1) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) and intimation dated 13.11.2022 has been sent by the CPC with the following adjustments made to the total income declared. 1. mismatch between return and tax audit report Rs.2,18,15,667/- 2. Disallowance u/s. 36(1)(va) on account of delayed payment of PF and ESI Rs.1,07,29,915/- Total Rs. 7,36,24,618/-
Accordingly, the income tax payable has been recomputed by raising the demand of Rs.1,04,37,440/-. Aggrieved by the impugned intimation u/s. 143(1) of the Act, the assessee preferred an appeal with the ld.CIT(A). During the appellate proceedings, the assessee submitted the relevant details as sought by the ld.CIT(A). The ld.CIT(A) confirmed the addition of GST refund to the total income made by the CPC in its intimation as correct. Aggrieved by the impugned order of the ld.CIT(A), the assessee preferred an appeal before us.
:-3-: ITA. No: 1565/Chny/2023 4. According to the ld.AR, bonafide error crept in while filling the TAR, wherein the ld.AR of the assessee submitted the GST refund receivable ledger account from 01.04.2020 to 15.03.2022, wherein the GST Input Tax (ITC) paid on its inputs used in the business, which is eligible for refund to the company from the GST Department to the tune of Rs.72,37,848/- for the year ending 31.03.2021. The ld.AR of the assessee also made a mention that due to inadvertent and bonafide error, while filing tax audit report (TAR) amount of Rs.72,37,848/- has been filled at Page no.7 sl.no. 2 against refund of VAT (value added tax), even though the same is not in the nature of revenue and requested the addition made in the intimation u/s. 143(1) of the Act, which is confirmed by the ld.CIT(A) in the said impugned order may be deleted.
Per contra, the ld.DR relied upon the order of the ld.CIT(A).
We have heard both the parties, perused materials available on record and gone through orders of the authorities below. The assessee had filed its return of income along with the tax audit report u/s. 44AB of the Act. As noticed in the :-4-: ITA. No: 1565/Chny/2023 intimation u/s. 143(1) of the Act, the assessee had filled column ‘amounts not credited to the profit and loss account, being (a) ……. (b) The proforma credits, drawbacks, refund of duty of customs or excise or service tax, or refund of sales tax or value added tax, or refund of GST, where such credits, drawbacks or refunds are admitted as due by the authorities concerned.” Consisting of (a) income from sale of duty scripts of Rs.1,45,77,819/-, (b) GST refund claimed at Rs.72,37,848/- totaling to Rs.2,18,15,667/-. After going through, we find force in the submissions of the assessee that, as per the relevant documents and ledger account furnished by the Ld. Counsel for the assessee, above column had been filled inadvertently that the GST refund claimed at Rs.72,37,848/-, which is not a revenue to the company. The ledger account furnished of GST refund receivable from the GST Department for the financial year 2018-19 was at Rs.22,97,914/- and for assessment year 2019-20 Rs.49,39,934/- amounting to Rs.72,37,848/- is the amount paid as GST on the input purchased for the business which is eligible to be claimed as refund from the GST
:-5-: ITA. No: 1565/Chny/2023 Department. Therefore, an inadvertent error is required to be rectified by the AO as the error is bonafide.
As per Article 265 of Constitution of India, “no tax shall be levied or collected except by authority of law” and since, GST refund is not a revenue, it cannot be brought to tax. In light of the above, we are inclined to direct the AO to recompute the total income by deleting the addition made on account of GST refund of Rs.72,37,848/-, after verification of relevant documents and pass the order in accordance with law.