Luxmi Super Services vs ACIT Circle 52(1), Delhi

PER AMITABH SHUKLA, AM:

This appeal by the assessee is directed against the order of the ld. Addl. Joint/Addl. Commissioner of Income Tax(Appeals)-4, Mumbai, [hereinafter referred to as ‘ld. CIT(A)] dated 06.11.2025 arising out of assessment order dated 04.07.2024 passed under section 154 of the Income Tax Act, 1961, for the Assessment Year 2007-08. The word ‘Act’ herein this order would mean Income Tax Act, 1961.

The assesse has raised following grounds of appeal:-

The only issue arising from the above grounds of appeal raised by the assesse is regarding non-credit of tax payments aggregating to Rs.6,19,048/- by the Revenue Authorities.

We have heard rival submissions in the light of material placed on record. The ld. Counsel for the assesse took us through the brief factual matrix of the case. The appellant assesse is assailing the order of ld. Addl. CIT(A) dated 06.11.2025, wherein, he has rejected assessee’s challenge to order under section 154 for AY 2007-08 dated 04.07.2024. The ld. Counsel submitted that the appellant assesse owns a petrol pump allotted by public sector company Hindustan Petroleum and is doing the same business for more than three decades. The assessee is a partnership firm having date of incorporation 08.10.1975 and was allotted PAN: AAACL1749C (PB 45). The appellant assessee has been all along filing its return of income, tax audit reports and was also assessed under 143(3) for earlier years on this PAN only (Paper book pages 23, 27). It was alluded that It is crystal clear from these assessment orders that status of the assessee is a "firm". The ld. Counsel pointed out that as per scheme of things the fourth letter of the PAN is C which is stands for company. The ld. Counsel submitted that from AY 2007-08 onwards, the filing of return for audit cases was made online (Paper book page 49). Accordingly, when the assessee attempted to file its return of income, the error cropped up for status of the assessee due to fourth letter C.

The ld. Counsel stated that the assessee took advise from the Income tax Department helpline vertical, which suggested to apply for a fresh PAN. The assessee applied for the same on 22.10.2007 (Paper book page 46) and was allotted PAN: AACFL9544N (PB 48). That assessee filed its return for AY 2007-08 dated 27.10.2007 on new PAN: being AACFL9544N. The ld. Counsel submitted that pertinently, at this juncture, the assessee had already paid its advance tax of Rs.5,04,900/- (Paper book page 9), having TDS credit of Rs.13,091/- and paid Self-assessment tax of Rs.1,01,057/- (Paper book page 10). Furthermore, the tax audit report of the assessee in form 3CB was filed on 01.10.2007 (Paper book page 11) on the old PAN for which no error was reported. However, the credit of Fringe benefit tax was allowed.

The ld. Counsel submitted that the assessee received Notice under section 221 dated 13.10.2009 Paper book page 17) for a demand of Rs.7,79,813/-, vide which it came to its attention that the credit of advance tax, TDS and Self-assessment tax was not given to the assessee while processing its return of income. Accordingly, assessee moved application under section 154 on 21.10.2009 Paper book page 8) of the Act seeking credit of the taxes and cancellation of the demand. Thereafter, reminders were issued but no action was taken by the department. Thereafter, the assessee filed a grievance with CP Grams on 11/05/2024 Paper book page 59), which was closed by the department by passing the impugned order under section 154 dated 04.07.2024 rejecting the application of the assessee without discussing the merits merely on technical reasons that no credit is available on PAN (new pan) of the assessee, without verifying the claim of the assessee. The assessee went into appeal but that was also decided against the assessee on the ground that this issue is beyond the scope of section 154, which is incorrect as it is apparent from record and does not require any hence this appeal. The ld. Counsel alluded that for Ay 2008-09, an installment of Advance tax was paid on 13.09.2007 Paper book page 51) on old PAN, i.e. AAACL1749C which was claimed in its return of income and was allowed by the department. Therefore, not allowing credit for AY 2007-08 is contradictory to the position taken by the Revenue Authorities.

Ld. DR relying upon the order of the lower authorities, mainly submitted that the credit of due taxes could not be given to the assessee in view of technical difficulties. It was stated that the computer system would not process the claim of pre-paid taxes on the old PAN.

The question that thus emerges is as to whether the assessee is rightfully entitled for its claim of pre-paid taxes amounting to Rs.6,19,048/-. It is noted that the entire problem has arisen since the adoption of e-filing by the Revenue authorities. The problem or the deficiency in the PAN no. allotted to the assessee vis a vis its incorrect status came to light only upon the rolling in of e-filing. Prior to that this mistake could not be detected and the assessee was filing its Return of Income and getting due credit for taxes. It is undisputed facts on record that the assessee is a registered firm and not a company. The allotment of a PAN No. to the assessee denoting as a company was thus a mistake, inadvertent or otherwise, committed by the revenue authorities and the assessee had no role in it. We have also noted that it is not the case of the Revenue that the pre-paid taxes claimed by the assessee are ingenuine. It is also an undisputed facts on record that the petition u/s 154 moved by the assessee was dismissed as technically inept by the revenue authorities almost after 15 long years. This inordinately delayed disposal of assessee’s 154 petition is also something of revenue doings and the assessee cannot be victimized for the same.

It is a settled principal of law as enunciated by Hon’ble Courts in several judgments that technicalities cannot come in way of grant of rightful relief to a tax payer. In the present case the appellant has paid pre-paid taxes of Rs.6,19,048/-, genuineness of which has not been doubted by the respondent revenue. Accordingly, we are of the considered view that the appellant assessee deserves grant of credit of claimed pre-paid taxes. Accordingly, we set-aside the order of the lower authorities and direct the ld. AO to give the credit of pre-paid taxes of Rs.6,19,048/- to the assessee. Considering the huge delay of nearly 20 years for which the assessee is suffering, the ld. AO is directed to pass his order giving credit to the assessee within 90 days of the receipt of this order. All the grounds of appeal raised by the assessee are therefore allowed.

In the result, the appeal of the assessee is allowed.