The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) deleted an erroneous addition of Rs. 19,253 made by the Centralized Processing Center (CPC) after finding that the amount had already been included in the taxable income.
HPL Mercantile Pvt. Ltd., the assessee, had filed its Income Tax Return (ITR) for Assessment Year (AY) 2021-22, declaring a total income of Rs. 61,81,971 and opting for a concessional tax rate under Section 115BAA of the Income Tax Act, 1961.
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The CPC processed the return under Section 143(1) and computed a total income of Rs. 62,01,220 leading to an additional tax demand of Rs. 11,600. The assessee argued that a variance of Rs. 19,253, classified as a liability written back, was already included in the taxable income per Section 41 of the Income Tax Act, and the CPC’s addition of the same amount led to double taxation.
The assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)] challenging both the double addition and the denial of the concessional tax rate due to a procedural lapse in filing Form 10-IC. The CIT(A) upheld the CPC’s decision.
Aggrieved, the assessee approached the tribunal, the assessee repeated that the double addition was an error, as the amount was already accounted for in audited financials and tax computations. The Department’s counsel did not raise any serious objections to this claim.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
The two-member bench, comprising Shamim Yahya (Accountant Member) and Vimal Kumar (Judicial Member), ruled that CPC’s addition of Rs. 19,253 was erroneous, as it led to double taxation of an already declared income. The tribunal directed the Assessing Officer (AO) to delete the addition.
Regarding the denial of concessional tax under Section 115BAA, the tribunal observed that the assessee did not press grounds related to this issue. So, those grounds were dismissed as “not pressed.” The tribunal partly allowed the appeal for statistical purposes.
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