Neuland Laboratories Ltd Vs ACIT (ITAT Hyderabad)
The Hyderabad ITAT allowed the assessee’s appeal for statistical purposes and remanded the matter concerning penalty under Section 270A of the Income-tax Act, 1961. The assessee had filed its return for A.Y. 2018-19 declaring a loss and was subsequently assessed under Section 143(3), read with Sections 143(3A) and 143(3B), with disallowances under Section 40(a)(i) read with Section 195. The AO later imposed a penalty of ₹35,85,941 under Section 270A, which was upheld by the CIT(A).
Before the Tribunal, the assessee submitted that a computational mistake in the assessment order had resulted in a demand of ₹2,01,40,900. The mistake was rectified by the AO under Section 154 on 06.08.2021, after which the demand was deleted and the assessee became entitled to a refund of ₹41,14,553.
The assessee had also filed Form No. 68 under Section 270AA(2) seeking immunity from penalty. It submitted that Form 68 was filed on 30.04.2021, within the prescribed period, that no appeal had been filed against the assessment order, and that after rectification no tax demand remained payable. The AO rejected the immunity application, and penalty proceedings followed.
The Tribunal noted that Form 68 appeared to have been filed within the statutory period and that the rectification order resulted in a refund. It further observed that the lower authorities had not examined the effect of the rectification order on the assessee’s eligibility for immunity under Section 270AA, including whether the requirement concerning payment of tax and interest stood substantially complied with when no tax demand ultimately survived.
