Taxpayer Claims Income Declared in ITR Wrong & Belonged to Another Year: ITAT Remands Matter for Verification [Read Order]

Income Tax Appellate Tribunal (ITAT), Pune Bench, has remanded a matter back for verification since the taxpayer/assessee claims that income has been declared incorrectly in the wrong year. The department has alleged unpaid tax liability of INR 4,81,700 according to the return filed by the assessee.

The assessee, Rajiv Pandurang Lembhe, furnished updated return on 31.03.2024 for AY 2021-22 declaring income of INR 12,74,730. Tax liability calculated was not paid.

The counsel for the assessee has argued, using several decisions, that since the assessee has filed defective return as tax liability remained unpaid, the return is to be treated as invalid and no return should be furnished.

The bench, comprising Manish Borad (Accountant Member), noted Article265 of the Indian Constitution which provides that “no tax shall be levied or collected except by authority of law”.

In the present case, the tax liability occurred due to it being filed in the wrong year by the Tax Consultant and further verification of this claim needs to be made in order to uphold the superiority of rule of law. The tribunal observed that the same should be observed in matters where the Revenue Department is eligible to draw legitimate tax.

Considering these circumstances of the case, the ITAT deemed it appropriate to restore the issue to the Jurisdictional Assessing Officer (JAO) to examine the claim made by the assessee.

An affidavit is to be provided by the assessee stating that mis-consultation had taken place and the income for AY 2021-22 is incorrect. Additional evidence including financial statement/bank statement is directed to be produced by the assessee.

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