Tribunal Orders Tax Refunds for 2012-13 and 2013-14; Agricultural Income Wrongly Included in MAT Calculation.

The Tribunal allowed the appeals filed by the assessee for Assessment Years 2012-13 and 2013-14, directing the AO to refund the taxes. The Tribunal found the AO's actions unsustainable, as the agricultural income was incorrectly included in business income, affecting the MAT calculation. Despite the AO accepting the revised computations showing business income at NIL and separating agricultural income, the refunds were not granted during rectification under Section 154. The Tribunal ruled that the AO should have excluded agricultural income from book profits for MAT computation and ordered the refunds accordingly.

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Issues Involved:
1. Rejection of application under Section 154 for refund of taxes due to incorrect MAT calculation for Assessment Year 2012-13.
2. Rejection of application under Section 154 for refund of taxes due to incorrect MAT calculation for Assessment Year 2013-14.

Issue 1: Rejection of application under Section 154 for refund of taxes due to incorrect MAT calculation for Assessment Year 2012-13

The assessee filed an appeal against the order of the CIT(A) confirming the AO's rejection of the application under Section 154 for not acknowledging and allowing a refund of Rs 4,98,280/- due to incorrect MAT calculation. The assessee argued that their agricultural income was erroneously included as business income and claimed under Section 80IC(2). The assessment was reopened, and the AO accepted the revised computation showing business income at NIL and agricultural income separately. Despite this, the AO did not grant the refund during the rectification under Section 154, instead enhancing the income and raising a demand. The Tribunal found that the AO's action was not sustainable as there was no mistake in the original orders, no notice was given before enhancing the income, and the agricultural income should have been excluded from the book profits for MAT computation. The Tribunal directed the AO to refund the taxes to the assessee.

Issue 2: Rejection of application under Section 154 for refund of taxes due to incorrect MAT calculation for Assessment Year 2013-14

The assessee filed an appeal against the order of the CIT(A) confirming the AO's rejection of the application under Section 154 for not acknowledging a refund of Rs 10,46,000/- due to incorrect MAT calculation. The assessee argued that their agricultural income was erroneously included as business income. The AO accepted the revised computation showing business income at NIL and agricultural income separately. Despite this, the AO did not grant the refund during the rectification under Section 154, instead determining tax on book profit. The Tribunal found that the facts and circumstances were identical to the previous issue and directed the AO to refund the taxes to the assessee.

Conclusion:

In both appeals, the Tribunal concluded that the AO's actions were not sustainable and directed the AO to refund the taxes to the assessee. The appeals filed by the assessee were allowed.

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