ITC Reversal

[Yogesh Narashiman]

I have received a two notices from commercial tax department, that they have proposed to revise ITC for the period 2006-07 & 2007-08 for delay filling of returns after the stipulated time. (the returns was filled on 05.06.2008). The reason for ITC reversal as said in the notice as follows:

You are registered dealer and reported taxable sales turnover of Rs.578377 for the year 2006-07 and   Rs.28,82,230 for the year 2007-08 in monthly form-I returns filed on 05.06.2008, which was accepted and assessed U/s. 22(2) on 31.10.2012. On further perusal of assessment records, it is seen that the form I returns were filled beyond the prescribed due date.

Thus, you have filled the monthly returns after a delay of dated on 05.06.2008 1 1/4 year and availed ITC. according to the provisions of sec. 19(11) of the TNVAT act ITC for the month could be availed within 90 days from the date of purchase or before the end of the financial year whichever is later. the delay caused by you is abnormal and you are not eligible for ITC for the above said months (12 months 01.04.2007-31.03.2008). its therefore proposed to reverse the ITC u/s. 27(2) Rs. 118325.00 for 2007-08 & Rs. 21337/- for 2006-07

Besides penalty U/s. 27(4) of the TNVAT act 2006 will be considered.

Objections if any may be filled within 10 days from the date of receipt of this notice.

Note:

1. the annual turnover for the year 06-07 is Rs. 578377/-

2. i have not received any notice for non-filling for returns during the FY 2007-08 or 2006-07.

3. After voluntary disclosure of returns on 05.06.2008, they never issued any assessment orders til date. 

 

Kindly suggest me how to tackle this thing and do the needful at the earliest.

 

Yogesh

 

AI Summary

Tax Department Seeks ITC Reversal for Late Filings; Cites Section 27(2) of TNVAT Act for 2006-08 Period A forum participant received notices from the commercial tax department proposing to revise Input Tax Credit (ITC) for 2006-07 and 2007-08 due to delayed return filings. The returns, filed on 05.06.2008, exceeded the stipulated timeframe. The department intends to reverse ITC under Section 27(2) of the TNVAT Act and consider penalties under Section 27(4). Respondents advised that ITC should be claimed within 90 days or by the financial year's end. They suggested arguing the delay was unintentional, due to an accountant's unavailability, and requesting leniency from the assessing officer. Recent court rulings support the department's stance on ITC restrictions.