Das Taxation Services

*Breaking News*

The Central Board of Direct Taxes (CBDT) has decided to extend the specified date for filing various audit reports for the Previous Year 2024–25 (Assessment Year 2025–26), from 30th September 2025 to 31st October 2025, for assessees referred to in clause (a) of Explanation 2 to sub-section (1) of section 139 of the Act.

Kerala High Court: No Penalty for Clerical ITC Misreporting if No Revenue Loss

In MJBR Marketing and Financial Services Pvt. Ltd. vs. Union of India [2025-VIL-421-KER], the Kerala High Court ruled that no penalty or tax demand can be imposed for mistakenly utilizing CGST/SGST ITC under the IGST head, as long as there’s no actual loss to the government.

Key Highlights:
• The error occurred due to no revision option in GSTR-3B and was revenue-neutral.
• The Court relied on CBIC Circular No. 192/04/2023 and its own ruling in Rejimon Padickapparambil Alex.
• Held that the credit ledger is a unified wallet, and technical errors without fraud or short payment don’t trigger Section 73.
• Directed the department to issue a fresh order within two months.
• Clarified that Centre-State apportionment issues must be raised before the GST Council, not taxpayers.

Impact:
A major relief for honest taxpayers—clerical errors in ITC reporting won’t attract penalties if there’s no tax evasion or revenue loss.