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It so happened that in (2023) 108ITR (Trib) 94 (Jodhpur bench) the Assessee having filed a return within due date revised the return well within the statutory time. The return carried a loss in the current year. 

The CPC processed the revised return as original return and disallowed loss incurred in the current year as ineligible for carry forward. 

With no relief coming from the Commissioner (A) the Assessee running a khadi outlet is forced to fight their case in ITAT for this gross mistake of CPC. 

The Tribunal declined to award costs to the assessee who took a specific ground for award of costs to make up for the expenditure on travel, appeal fees and advocate fees. 

Costs are denied stating that there is no malafide intention by Commissioner (A) and that CPC is more of system failure but then it is no good that an organisation running a khadi outlet with no loss no profit stream is made to incur such wasteful expense. 

There is a need to empower ITAT to order costs even in system based irregularities and faceless errors that cause undue financial burden upon the taxpayers in disregard of any illegality or otherwise in those actions. Even if Ss. (2B) of s. 254 provide a discretion to award costs but the Tribunal it seems is not accustomed to apply it in situations that cause several inconvenience to the taxpayers. 

In ITA No. 9601/B/91 dated 30.6.1999 the Mumbai bench awarded cost of Rs. 2000/-. ( equivalent at Rs.10000/- at 2023 prices) for inconvenience caused to the assessee.

CPC action is limited to computation income and determination of tax payable without carrying out the whole lot of procedure under the law for imposing liability on the taxpayer. 

Any excessive action such as in this case is worrisome and should not cause financial loss to the taxpayers much less than it warrant a compensation as in this case scenario. 

This judgement sadly give a reflection that since the proceedings before Commissioner (Appeals) are faceless therefore there it cannot be taken as suggesting any malafide so as to award costs. 

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