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IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM.

(Through Virtual Hearing)

BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER आ.अपी.सं /ITA No.45/Viz/2025 (निर्धारण वर्ा/Assessment Year:2018-19)

The Yanam Co-operative Stores Principal Commissioner of Income Limited, Yanam. Vs. Tax, Visakhapatnam.

PAN:AADFT3518R (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri Harsha Haridasu, C.A.

रधजस् व द्वधरध/Revenue by:: Dr. Satyasai Rath, CIT-DR सुिवधई की तधरीख/Date of hearing: 26/03/2025 घोर्णध की तधरीख/Pronouncement: 15/04/2025 आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M.:

This appeal is filed by The Yanam Co-operative Stores Limited (“the assessee”), feeling aggrieved by the order passed by the Learned Principal Commissioner of Income Tax, Visakhapatnam-1 (“Ld. PCIT”), dated 28.11.2024 for the A.Y. 2018-19.

2. The assessee has raised the following grounds :

“ The refund was issued after due verification of TDS records in Form 26AS, which reflected a TDS credit of Rs.2,86,834/-. The refund arose due to excess TDS paid, and as per section 237 of the Income Tax Act, a taxpayer is entitled to claim a refund of any tax paid or deducted in excess.”

3. The brief facts of the case are that, the assessee is a co-operative society did not file any Return of Income (“ROI”) u/s.139 of the Income Tax Act, 1961 (“the Act”) for A.Y. 2018-19. Subsequently, the case of the assessee was reopened u/s.147 of the Act and a notice u/s.148 of the Act was issued by Learned Assessing Officer (“Ld. AO”). In response to the notice u/s.148 of the Act, the assessee filed its ROI on 2.5.2022 declaring total income at Rs.Nil and claiming a refund of Rs.2,72,885/-. The Ld. AO completed the assessment u/s.147 r.w.s. 144B of the Act on 09.03.2023, accepting the return as filed and granting a refund of Rs.2,86,834/-. Subsequently, the Ld. PCIT invoked section 263 of the Act, relying on the judgement of Hon'ble Supreme Court in the case of CIT Vs. Sun Engineering Works (P) Ltd. (1992) 198 ITR 297 (SC) stating that, since the assessee did not file any ROI u/s.139 of the Act, the reassessment proceedings u/s.147 of the Act could not be used for the benefit of the assessee. The Ld. PCIT also observed that the refund granted by the Ld. AO was erroneous and prejudicial to the interest of revenue. Accordingly, the order of Ld. AO was set aside by Ld. PCIT and the Ld. AO was directed to withdraw the refund.

4. Aggrieved with the order of Ld. PCIT, the assessee is in appeal before us. The Learned Authorised Representative (“Ld. AR”) submitted that Ld. PCIT has misinterpreted the judgment of Hon'ble Supreme Court in the case of CIT Vs. Sun Engineering Works (P) Ltd. (supra). Further, the Ld. AR distinguished the ruling given by the Hon'ble Supreme Court in the case of CIT Vs. Sun Engineering Works (P) Ltd. (supra) stating that, the issue in that case was whether the assessee could claim additional deduction or exemption unrelated to the escaped income in reassessment proceedings. The Hon'ble Supreme Court in that case held that, reassessment is meant to assess escaped income and cannot be used as an opportunity to claim fresh deduction or exemption. However, in the present case, there is no fresh claim of deduction or exemption. The assessee has merely claimed a refund of TDS, which is a statutory right and directly linked to the income assessed in the return filed in response to notice u/s.148 of the Act. In support of his submission, the Ld. AR relied on the decision of Hon'ble Allahabad High Court in the case of CIT Vs. Vali Brothers (2005) 282 ITR 149 (Allahabad) and Hon'ble Jharkhand High Court in the case of Shri Chitranjan Jaiswal Vs. CIT in C.W.J.C. No.2889 of 2000 on 16.06.2011. The Ld. AR further relied on the decision of the co-ordinate bench of the Tribunal in assessee's own case for A.Y. 2017-18 in ITA No.360/Viz/2024 dated 13.12.2024, where under similar facts, the Tribunal rul