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October 2022

Addition made due to wrong reporting in return of income deleted in an appeal against rectification order. Revised return held not necessary.

By Jagdish Punjabi, Chartered Accountant
Devendra Jain, Advocate
Reading Time 4 mins
31 Heidrick and Struggles Inc. vs. DCIT
TS-679-ITAT-2022 (DEL.)
A.Y.: 2018-19
Date of order: 26th August, 2022
Sections: 139(5), 154

Addition made due to wrong reporting in return of income deleted in an appeal against rectification order. Revised return held not necessary.

FACTS

The Assessee, a tax resident of USA, filed its return of income declaring total income of Rs. 23,60,54,860 and claiming a refund of Rs. 53,56,620. The return of income was processed by CPC, vide order dated 14th June, 2019, and a demand of Rs. 80,58,000 was raised for the reason that service income is taxable at 40 per cent plus applicable surcharge and cess and consequential interest u/s 234B and 234C was levied.

Against the order dated 14th June, 2019, the Assessee filed a rectification application which was disposed of vide order dated 22nd August, 2019, passed by CPC, raising a demand of Rs. 2,78,10,114. This demand arose as service income was held to be taxable at 40 per cent and TDS credit of Rs. 2,78,10,114 was denied. The Assessee filed one more rectification application on 15th October, 2019. The CPC vide its order dated 24th October, 2019 raised a demand of Rs. 1,06,73,750 by taxing service receipts of Rs. 2,84,40,475 at 40 per cent along with applicable surcharge and cess and denied TDS credit of Rs. 22,54,771.

Aggrieved, the Assessee preferred an appeal to CIT
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