THE RANUJ NAGARIK SAHAKARI BANK LIMITED,,PATAN vs. THE INCOME TAX OFFICER, WARD-3, MEHSANA

Only one ground is raised in the appeal, which also contains sub-grounds. The sole issue raised by the assessee is that while framing assessment under section 143(3) of the Income Tax Act, 1961 for determining assessed income, the both the authorities below have erred in taking figure of income computed under section 143(1) as returned income by the CPC, instead of income declared by the assessee in the return filed on 29th September, 2020. In other words, for framing assessment under section 143(3) of the Act, the ld.AO has taken income of Rs.37,66,259/- assessed by the CPC under section 143(1) as returned income, instead of Rs.32,01,150/- returned by the assessee as per return of income filed for the A.Y.2010-11.

Brief facts of the case are that the assessee is a cooperative bank. It filed its return of income on 29.9.2010 declaring total income at Rs.32,01,050/-. The return was processed under section 143(1) on 6.5.2011 by CPC, Bangalore determined total income at Rs.37,66,260 and raised the demand of Rs.2,10,030/-. Thereafter, the case of the assessee was taken up for scrutiny and assessment order under section 143(3) was passed on 30.11.2012 in which returned income was taken at Rs.37,66,260/- and determined assessed income at Rs.40,20,286/- by making addition/disallowance of Rs.2,54,026/-. After going through the assessment order passed under section 143(3), the assessee noticed that there was apparent error in considering the figure of returned income while computing assessed income as per section 143(3). The assessee filed rectification application under section 154 of the Act with a request to consider the income returned by the assessee as per the return of income of Rs.32,01,050/- instead of income assessed by the CPC under section 143(1) of the Act at Rs.37,66,259/- for computation of income under section 143(3). The ld.AO vide order dated 27.10.2017 under section 154 rejected the application of the application of the assessee on the ground that the application of the assessee is barred by limitation. This order has been challenged before the ld.CIT(A). Assessee filed a detailed submissions before the ld.CIT(A). In the impugned order, the ld.CIT(A) recorded submissions of the assessee for rectification of the order, but the contentions of the assessee rejected and he confirmed the action of the AO. Aggrieved by the action of the Revenue authorities, assessee is now before the Tribunal.

Before me, the ld.counsel for the assessee reiterated the submissions made before both the authorities. He further submitted that error in the impugned order is apparent, and very much obvious and patent on the record. Both the authorities have passed the impugned orders without appreciating the case of the assessee on merit, and therefore, the same requires to be rectified. He further submitted that the order of ld.CIT(A) is very cryptic, and simply confirmed order of the AO without dealing with merit of the issue raised by the assessee in the submissions. The application filed by the assessee under section 154 was within the statutory time limit, because the assessee has filed application on 20.1.2017 and the time limit as per the provisions of section 154 of the Act was upto 31.3.2017. On the other hand, the ld.DR supported the orders of the Revenue authorities.

I have considered rival submissions and gone through the impugned orders of both the authorities below. I find that assessee has filed return of income declaring total income at Rs.32,01,050/- which was processed by the CPC, Bangalore under section 143(1) and assessed at Rs.37,66,259/-. In the scrutiny assessment under section 143(3), the ld.AO has taken the income of Rs.37,66,259/- assessed under section 143(1) by the CPC as returned income, instead of returned income of Rs.32,01,050/- declared by the assessee in its original return. The ld.AO ought to have taken the figure of income declared by the assessee in the original return of income as “returned income” while computing the income under section 143(3) of the Act 3

In the result, appeal of the assessee is allowed.