ADVENT INFRAPROJECTS PVT. LTD.,JAIPUR vs. DEPUTY COMMISSIONER OF INCOME TAX, JAIPUR

It was further submitted by the ld AR that otherwise also, in various cases, it is held that once return of income is filed under section 153A of the Act, it has to be considered as a return of income filed under section 139 of the Act and all other provisions would apply as though it is a return of income filed under section 139 which includes reconsideration of any deduction permissible under the law. For this purpose reliance is placed on the following cases:-

Per contra, the ld CIT/DR submitted that in the original return of income, the assessee has claimed loss of Rs 22,31,247/- which was revised to loss of Rs 44,51,756/- in the return filed under section 153A of the Act. It was submitted that it is clearly a case of additional claim of loss which cannot 3 Advent Infra Projects Private Ltd., Vs. DCIT, Central Circle-03, Jaipur be allowed as per the decision of the Hon’ble Rajasthan High Court in case of Jai Steels (supra). It was further submitted that even where it is accepted that there was mistake in filing the original return of income, given that the original return of income was filed on 21.09.2012, the assessee had ample time to file the revise return of income which the assessee has not filed and therefore, having failed to file the revised return of income, the assessee cannot be allowed to make a fresh claim in the return filed in response to notice u/s 153A of the Act.

We have heard the rival submissions and perused the material available on record. The comparative position in the original return of income filed under section 139(1) and the return of income filed in response to notice u/s 153A as submitted by the assessee during the course of appellate proceedings before the ld CIT(A) is as under:- Advent Infra Projects Private Ltd., Vs. DCIT, Central Circle-03, Jaipur 8. The claim of the assessee is that income tax expenses of Rs 22,20,509/- has been added twice to the loss of Rs 68,46,302/- as per the profit/loss account while filing the original return of income and the same has now been rectified while filing the return in response to notice u/s 153A of the Act. On perusal of the assessee’s financial statements, we find that there is a loss of Rs 68,46,302/- as reflected in the profit/loss account and the said loss has been computed after claim expense under the head “Income tax” amounting to Rs 22,20,509/- and the details of the same as per ledger account is as under:-

We therefore find that what has been debited in the profit/loss account is an expense on account of income tax which is not allowable u/s 40(a)(ii) 5 Advent Infra Projects Private Ltd., Vs. DCIT, Central Circle-03, Jaipur of the Act. While filing the original return of income, the assessee has taken loss as per profit/loss account amounting to Rs 46,25,793/-(after adjusting income tax expense of Rs 22,20,509/-) and thereafter, has further adjusted such loss by same income tax expense of Rs 22,20,509/-. Thus, the income tax expense which is disallowable u/s 40(a)(ii) of Rs 22,20,509/-has been disallowed twice while filing the original return of income. The same is clearly a mistake apparent on record and there cannot be two views about it or any debate for that matter as the expense cannot be disallowed twice. Even where the Assessing officer has to disallow such an expense, he would have disallowed the same once and not twice as mistakenly done by the assessee. We therefore find that there is no fresh claim of any expenditure while filing the return in response to notice u/s 153A of the Act. What has been done is correction of mistake whereby the income tax expense which has been suo-moto disallowed twice while filing the original return of income has been corrected to single disallowance while filing the return of income in response to notice under section 153A of the Act.

The Assessing officer has not stated any specific reasons for not accepting the loss as per return filed in response to notice u/s 153A of the Act. All he has stated is that original return e-filed on 21.09.2012 wherein loss of Rs 22,31,247/- has been claimed which was revised to a loss of Rs 45,51,756 in the return filed u/s 153A and loss claimed in the original return of income e-filed u/s 139(1) will only be allowed. The ld CIT(A) has however stated that it is a case of fresh claim and the AO was right as no fresh claim can be filed in return filed u/s 153A of the Act. We find that both the authorities have not appreciated the exact reasons for the difference in the loss figures as per the original return and return filed in response to notice u/s 153A and has summarily rejected the assessee’s position and as we have noted above, it is a case of mistake whereby the income tax expense which 6 Advent Infra Projects Private Ltd., Vs. DCIT, Central Circle-03, Jaipur has been disallowed twice while filing the original return of income has been corrected while filing the return of income under section 153A of the Act and there is no fresh claim of any expenditure or loss which was not claimed earlier and has now been claimed for the first time while filing the return in response to notice u/s 153A of the Act.

Further, it is no doubt true that though the original return of income was filed on 21.09.2012 and the time limit for filing the revised return had expired as contended by the ld CIT/DR, however, being a mistake apparent from record, the assessee can invoke the provision of section 154 and seek rectification of intimation issued u/s 143(1) dated 15.03.2013 before expiry of four years and which has not expired at the time of issuance of notice u/s 153A of the Act on 1.04.2015. Therefore, when the assessee filed the return in response to notice u/s 153A, the assessee still had time to rectify the original return of income and where such rectification is sought as part of return of income filed u/s 153A instead of initiating separate proceeding by way of filing a rectification application, no fault can be said to arise in such a case.

In the entirety of facts and circumstances of the case and in light of aforesaid discussions, we are of the considered view that it is a not a case of fresh claim of loss in the return filed u/s 153A and therefore, the decision of Hon’ble Rajasthan High Court in case of Jai Steels (supra) doesn’t support the case of the Revenue. The decision of the lower authorities is set-aside and the matter is decided in favour of the assessee and against the Revenue.