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2024 (11) TMI 772 - AT - Income TaxRectification of mistake apparent on record u/s 154 - addition of GST amount and non-payment of taxes u/s 43B - HELD THAT - It is fact on record that assessee has failed to withdraw the appeal but, in the meantime, CIT (A) has adjudicated the issue based on the information available on record. Basically, he has accepted the fact that GST amount was not to be added in the hands of the assessee. However, he proceeded to sustain the addition to the extent of non-payment of GST u/s 43B. However, this is not the issue contested by the assessee before the CIT(A). Leaving that as it may, the grievance raised by the assessee before the CIT (A) was already addressed by the CPC by rectifying the order passed u/s 154 of the Act, there is no grievance to the assessee. The impugned order passed by CIT (A) becomes infructuous. Accordingly, we direct the AO not to proceed with the order giving effect to the findings of CIT (A).
Issues:
Appeal against order of ld. CIT (A) for Assessment Year 2022-23 based on net revenue method, rectification application u/s 154 of the Act, failure to withdraw appeal after rectification, addition of GST amount and non-payment of taxes u/s 43B of the Act. Analysis: The appeal was filed by the assessee against the order of ld. CIT (A) for Assessment Year 2022-23. The assessee followed a net revenue method, recording net sales as revenue. The CPC replaced gross revenue with net revenue from the audit report filed. The assessee filed a rectification application u/s 154 of the Act before the CPC, which was accepted, rectifying discrepancies. However, the assessee failed to inform ld. CIT (A) of the rectification and did not withdraw the appeal. The ld. CIT (A) passed an order allowing GST amount as input tax credit and sustaining the addition of unpaid taxes u/s 43B of the Act. The assessee appealed to ITAT, claiming the order was improper. The ld. CIT (A) passed the order based on information available, despite the rectification by the CPC. The ld. CIT (A) accepted that GST amount should not be added but sustained the addition for non-payment of taxes u/s 43B. However, this issue was not contested by the assessee before the ld. CIT (A). As the CPC rectified the order u/s 154 of the Act, addressing the assessee's grievance, the appeal before the first appellate authority became infructuous. The assessee failed to withdraw the appeal, and the ld. CIT (A) proceeded to adjudicate the issue. The ITAT held that since the grievance was already addressed by the CPC, the ld. CIT (A) order became infructuous. The Assessing Officer was directed not to proceed with the order based on the ld. CIT (A) findings. Consequently, the appeal filed by the assessee before the ITAT was also deemed infructuous and dismissed with the above observations and directions to the lower authorities.
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