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Income Tax Appellate Tribunal, HYDERABAD BENCH “B”, HYDERABAD
Before: SMT. P. MADHAVI DEVI & SHRI A. MOHAN ALANKAMONY
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH “B”, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER Assessment Year: 2015-16 M/s. Banyan Sustainable Vs. Asst. Commissioner of Waste Management Pvt Income Tax, Ltd., Hyderabad. Circle-1, PAN: AAFCB 5861 L Warangal. (Appellant) (Respondent) Assessee by: Sri Gopichand Bhattaram Revenue by: Sri Sunil Kumar Pandey, DR Date of hearing: 30/01/2020 Date of pronouncement: 18/06/2020 ORDER PER A. MOHAN ALANKAMONY, AM.:
This appeal is filed by the assessee against the order of the Ld. CIT(A)-3, Hyderabad in appeal No.0190/ACIT-1/WGL/CIT(A)-3/2017- 18, dated 18/01/2019 passed U/s. 143(3) r.w.s 250(6) of the Act for the A.Y. 2015-16.
The assessee has raised 3 grounds and one fresh ground in its appeal and they are briefly stated hereinbelow for adjudication:-
(i) The Ld. CIT (A) has erred in upholding the order of the Ld. AO who had speciously rejected the returned filed by the assessee U/s. 139(5) of the Act.
(ii) The fresh ground raised before the Tribunal for the first time is that the Ld. AO has erred in converting the limited scrutiny to complete scrutiny disregarding the instructions issued by the CBDT vide Notification dated 24/12/2014, 29/12/2015 and 14/07/2016.
The brief facts of the case are that the assessee is a Private Limited company engaged in Waste Management business, filed its original return of income on 30/09/2015 declaring loss of Rs. 50,94,693/-. Subsequently, the assessee filed revised return of income on 25/07/2016 and once again on 13/2/2017 declaring loss of Rs. 69,21,019. Thereafter the case of the assessee was selected for scrutiny under CASS and assessment was completed wherein the Ld. AO made addition towards deferred tax liability and further rejected the revised return filed by the assessee U/s. 139(5) of the Act and disallowed to carry forward of the loss of Rs.69,21,018 by stating that the original return filed and the loss claimed therein had no basis and the revision of such return is not in accordance with the provisions of section 139(5) of the Act. On appeal, the Ld CIT (A) confirmed the order of the Ld. AO. Aggrieved by the order of the Ld. CIT (A) for rejecting the revised return filed by the assessee U/s. 139(5) of the Act, the assessee is in appeal before us and also with respect to converting the limited scrutiny to complete scrutiny.
At the outset, the Ld. AR submitted before us that with respect to the first ground raised by the assessee, the issue is squarely covered in favour of the assessee by the decision of Cochin Bench of the Tribunal in the case of M/s. Kerala State Electronics Development Corporation Ltd vs. DCIT in vide order dated 29/03/2012 wherein they had followed the decision of the Hon’ble Madras High Court in the case of CIT vs. Periyar District Co-operative Milk Producers Union Limited (2004) 266 ITR 705 (Mad.) and various other higher Judiciaries. The Ld. DR could not controvert to the submission of the Ld. AR.
After hearing both sides, we find merit in the submission of the Ld. AR. On an identical circumstance, the Cochin Bench of the Tribunal had set-aside the order of the Ld. AO and the Ld. CIT (A) and directed the Ld. AO to process the revised return filed by the assessee U/s. 139(5) of the Act quantifying the loss in accordance with law by treating the return of loss filed U/s. 139(3) of the Act as if the return of income had been filed U/s. 139(1) of the Act. The relevant portion of the decision of the Cochin Bench of the Tribunal is extracted hereinbelow for reference:
“4. We have considered the rival submissions on either side and also perused the material available on record. It is not in dispute that the assessee has filed return of income disclosing loss on the basis of the provisional account within the time limit prescribed U/s. 139(1) of the Act. It is also not in dispute that the assessee has filed revised return on the basis of the audited statement within the time provided U/s. 139(5) of the Act. The question arises for consideration is whether the return of loss filed U/s. 139(1) on the basis of the provisional accounts can be rectified by filling a revised return U/s. 139(5) of the Act. The issue was considered by the Madras High Court in the case of Periyar District Co-operative Milk Producers Union Ltd (supra). The Madras High Court after considering the provisions of section 139(1), 139(3) and 139(5) of the Act found that the return of loss U/s. 139(3) can be filed within the time allowed U/s. 139(1) of the Act. Once the return is filed, all the provisions of the Income Tax Act shall apply as if such return was filed U/s. 139(1) of the Act. Therefore, the provisions of section 139(5) cannot be excluded. In fact, the Madras High Court has observed as follows at page 707 of the ITR: “A bare perusal of the aforesaid two provisions, more particularly the provision contained in section 139(3), makes it clear that a return of loss filed under section 139(3) may be filed within the time allowed under section 139(1). Once such a return is filed, all the provisions of the Income Tax Act shall apply as if such return has been filed under section 139(1). This position is clear from the expression “…..All the provisions of this Act shall apply as if it were a return under sub-section (1)”. In other words, a return filed under section 139(3) is deemed to be a return filed U/s. 139(1). The provision contained in section 139(3) makes it clear that all the provisions of this Act shall apply to such a return as if it were a return under section 139(1). In view of such a specified provision, there is no reason exclude the applicability of section 139(5) to a return filed U/s. 139(3).” A similar view was taken by the Allahabad High Court in the case of Dhampur Sugar Mills Ltd (supra). By respectfully following the judgment of Madras High Court in the case of Periyar District Co-operative Milk Producers Union Ltd (supra) and the judgment of the Allahabad High Court in the case of Dhampur Sugar Mills Ltd (supra) we set aside the order of the Authorities below and direct the Assessing Officer to process the revised return filed by the assessee U/s. 139(5) and quantify the losses in accordance with law.”
In the case of the assessee, it is apparent that the assessee had filed its return of loss within the due date of filing of the return U/s. 139(3) of the Act i.e., on 30/09/2015. Further, the assessee has revised its loss return for the second time U/s. 139(5) of the Act on 13/02/2017 i.e., within the expiry of one year from end of the relevant assessment year 2015-16. Therefore, the facts of the case of the assessee is identical to the facts of the case decided by the Cochin Bench of the Tribunal cited supra. Hence, keeping in view of the decision of the Hon’ble Madras High Court in the case of CIT vs. Periyar District Co-operative Milk Producers Union Limited, the decision of the Cochin Bench of the Tribunal cited supra and the decision of the various other higher Judiciary relied by the Cochin Bench of the Tribunal cited supra, We hereby hold that the return filed by the assessee U/s. 139(5) of the Act is in accordance with law and therefore the assessee is entitled to carry forward the loss of Rs. 69,21,019 claimed in the revised return of income dated 13/02/2017 provided such loss computed is as per the provisions of the Act. It is ordered accordingly.
With respect to the other ground raised by the assessee, the Ld. AR neither advanced any argument to substantiate the claim of the assessee nor furnished any cogent materials to support the case of the assessee. Hence, this ground raised by the assessee does not survive.
Before parting, it is worthwhile to mention that this order is pronounced after 90 days of hearing the appeal, which is though against the usual norms, we find it appropriate, taking into consideration of the extra-ordinary situation in the light of the lock-down due to Covid-19 pandemic. While doing so, we have relied in the decision of Mumbai Bench of the Tribunal in the case of DCIT vs. JSW Ltd. In and 6103/M/2018 for AY 2013-14 order dated 14th May 2020.
In the result, appeal of the assessee is partly allowed.
Pronounced in the open Court on 18th June, 2020.