2025 (2) TMI 1044 - HC - Income Tax

Deduction u/s 10A and depreciation on computer peripherals - petitioner states that with respect to the two corporate tax issues the respondent has failed to pass any appeal effect order till date and therefore the proceedings have become time barred with respect to these two issues - As submitted that once the ITAT set aside the assessment order the demand arising from the said order stood extinguished and it was the duty of the AO to delete the outstanding demand from the portal of the petitioner. However despite a lapse of more than 6 years from the date of the ITAT order setting aside the assessment order the AO has failed to delete the demand from the portal - HELD THAT - In view of the submissions of the learned counsel for the parties as also the statement of learned counsel for Revenue we direct that the order dated 26.06.2015 passed by the ITAT be given appeal effect to and the consequential benefits with statutory interest if applicable be released forthwith in accordance with law.

Summary

The writ petition was filed under Article 226 of the Constitution of India seeking a direction to delete the outstanding demand for Assessment Year (AY) 2006-07 reflected on the Income Tax portal of the petitioner and to accept the returned position on corporate tax issues for which no appeal effect order had been placed pursuant to the order of the Income Tax Appellate Tribunal (ITAT) and release consequential refunds along with statutory interest.The petitioner's case was selected for scrutiny, and an assessment order was passed by the Assessing Officer (AO) under Section 143(3) of the Income Tax Act, 1961, determining the total taxable income and raising a demand. The petitioner deposited an amount under protest for the additional income assessed by the Income Tax Department. Subsequently, a demand was raised on the portal, which continued to reflect with accrued interest.The petitioner challenged the assessment order before the ITAT, which set aside the assessment order with respect to the transfer pricing issue and remanded the matter for fresh determination. The ITAT also remanded the corporate tax issue of deduction under Section 10A of the Act back to the AO for further determination. The issue of depreciation on computer peripherals was allowed in favor of the assessee.The petitioner argued that the respondent failed to pass any appeal effect order regarding the two corporate tax issues, leading to the proceedings becoming time-barred. The petitioner contended that the demand arising from the assessment order should have been deleted from the portal following the ITAT's decision.The Revenue's counsel acknowledged that only the issue regarding Section 10A of the Act remained pending before the AO and agreed that an appeal effect order should be passed for other issues settled by the ITAT.The Court directed that the ITAT's order be given appeal effect, and the consequential benefits, along with statutory interest, be released promptly in accordance with the law. Consequently, the writ petition was disposed of.In summary, the key issues considered in the judgment were the deletion of the outstanding demand on the Income Tax portal, acceptance of the ITAT's decision on corporate tax issues, and the release of consequential refunds. The Court's decision focused on enforcing the ITAT's order, directing the AO to take necessary actions, and ensuring compliance with the law.