PCIT's Rejection of Refund Claim and Rectification Application: ITAT Dismisses Appeal [Read Order]

The Surat Bench of Income Tax Appellate Tribunal(ITAT) dismissed the appeal filed by the assessee, challenging the  Principal Commissioner of Income Tax (PCIT)'s rejection of the refund claim and rectification application, stating that the rejection was not an appealable order under Section 253 of the Income Tax Act,1961.

Shiraz Marazban Italia,appellant-assessee,filed an appeal challenging the rejection of a rectification application under Section 154 of the Act, for the assessment year 2015-16. The appeal arose from an order dated April 16, 2024, passed by the Commissioner of Income Tax (Appeals)[CIT(A)],National Faceless Appeal Centre (NFAC).

Become a PF & ESIC expert with our comprehensive course - Enroll Now

The assessee argued that the NFAC had wrongly upheld the rejection of the rectification application, despite a clear mistake in the records. The assessee claimed entitlement to a deduction of ₹1,50,000 under Section 80C as per a revised return and sought a refund of ₹20,100.

During the proceedings, the ITAT observed that the required documents were not attached to the appeal memorandum. The assessee had submitted a copy of the rectification application under Section 154 along with Form 36, which requested a refund based on Central Board of Direct Taxes (CBDT) Circular No. 9/2015. This circular allowed condonation of delays in filing refund claims under Section 119(2)(b) of the Act.

Become a PF & ESIC expert with our comprehensive course - Enroll Now

The PCIT had responded to the rectification request through a letter. The PCIT stated that the delay condonation circular could not override the provisions of Section 139(5). The application was treated as “filed” without any further action. The letter rejecting the application was signed by the Income Tax Officer (HQ) on behalf of the PCIT.

The two member bench comprising Pawan Singh(Judicial Member) and Bijayananda pruseth(Accountant Member) ruled that the PCIT’s letter did not qualify as an order under Section 154. Instead, it was merely a rejection of the condonation request under Section 119(2)(b).

Become a PF & ESIC expert with our comprehensive course - Enroll Now

The appellate tribunal explained that such a response was not appealable under Section 253 of the Act, which specifies the types of orders that can be challenged before the tribunal.

As a result, the ITAT dismissed the appeal as infructuous and did not address the grounds raised by the assessee.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates