2022 (10) TMI 563 - AT - Income Tax

Tribunal allows appeal emphasizing balancing technicalities with substantial justice in tax matters

The Tribunal allowed the appeal for statistical purposes, remitting the issue to the ld. CIT (A) for a fresh decision. The decision emphasized the ... Disallowance of refund - wrong quoting of PAN - due to clerical error while filing ITR assessee incorrectly mentioned the earlier PAN instead of new PAN allotted - appellant filed rectification application and the same was rejected by the AO - Assessee stated that the benefit of TDS has not been availed by assessee - TDS certificate was in the earlier name of the assessee company i.e. M/s. MHVS Finlease Pvt. Ltd. - assessee prayed that assessee never received the notice that it is a defective return. HELD THAT:- Upon careful consideration, in our considered opinion, when interest of substantial justice is pitted against technicalities, it is the interest of substantial justice that prevails. Furthermore, the assessee’s plea that it has not received the defect notice has not been categorically rebutted. Moreover as fairly agreed by ld. DR for the Revenue that ld. CIT (A) has not answered the appeal on the issue of section 154 issue raised by the assessee before him. Hence, in the interest of justice, we remit this issue to the file of ld. CIT (A) to decide the issue afresh keeping in mind the observation herein above. Needless to add, assessee should be granted adequate opportunity of being heard. Issues:Appeal against order of ld. CIT (Appeals)-I, New Delhi dated 18.07.2019 for Assessment Year 2012-13.Detailed Analysis:Issue 1: Rejection of Refund ClaimThe assessee filed ITR for A.Y. 2012-13 claiming refund but due to a clerical error, the wrong PAN was mentioned, leading to disallowance of the refund. The rectification application was rejected by the AO, citing the defective nature of the return. The ld. CIT (A) dismissed the appeal as not maintainable under section 246A of the Income-tax Act, 1961. The rejection was based on the return being treated as invalid under section 139(9) due to mismatched information. The appeal was dismissed, citing lack of provision for filing an appeal against treating the return as invalid under section 139(9).Issue 2: Denial of Tax CreditThe assessee contended that the TDS certificates were in the earlier name and PAN number, leading to the use of the old PAN in the return. The ld. CIT (A) noted the AO's observations but did not address the rejection of the 154 application. The Tribunal acknowledged the substantial justice aspect and the non-receipt of the defect notice by the assessee. The issue was remitted to the ld. CIT (A) for fresh consideration, emphasizing the need for a fair hearing for the assessee.Conclusion:The Tribunal allowed the assessee's appeal for statistical purposes, remitting the issue to the ld. CIT (A) for a fresh decision, considering the substantial justice perspective and ensuring the assessee's right to be heard. The judgment highlighted the importance of balancing technicalities with the interest of substantial justice in tax matters, emphasizing the need for a fair and thorough review of the case.