CONCORDE HOUSING CORPORATION PRIVATE LIMITED,BENGALURU vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(4), BENGALURU

Since the issue for the rectification for assessment year 2013- 2014 for not granting MAT credit as claimed by the assessee in its return of income for assessment year 2013-2014 in pursuance of section 153A of the I.T.Act bearing the effect in the assessment year

The brief facts of the case are that a search and seizure action u/s 132 of the I.T.Act was conducted in the business premises of the M/s. Concorde Housing Corporation Private Limited, a group concern. Notice u/s 153A of the Act was issued to the assessee in consequence of search. In response to the notice issued u/s 153A of the Act, the assessee has filed return of income for the assessment year 2016-2017. Thereafter other statutory notices were issued to the assessee. The assessee-company filed requisite details on various dates and the A.O. completed the assessment accepting the income returned by the assessee. For the sake of convenience, we are reproducing the assessment order passed by the A.O., as under:-

Later on, the assessee filed an application for rectification as per section 154 of the Act on 10.11.2020. The copy of the application and reply filed by the assessee are as under:- -700/Bang/2022. M/s.Concorde Housing Corporation Private Limited.

After the receipt of the application and reply, the A.O. passed rectification order u/s 154 of the Act on 30.07.2021 discussing the issue of MAT credit that the MAT credit was granted of Rs.2,16,43,503 instead of Rs.2,70,92,150 as claimed by the assessee. For the sake of convenience, we are extracting copy of the order u/s 154 of the Act also, as under:-

6. Aggrieved by the order of the A.O., the assessee has filed the present appeal before the CIT(A). The assessee has filed detailed written submissions before the CIT(A), which has been incorporated by the CIT(A) in para 5.1 of his order. The same is reproduced as under:- -700/Bang/2022. M/s.Concorde Housing Corporation Private Limited.

The learned CIT(A) dismissed the grounds relating to challenging the order u/s 154 of the Act passed by the A.O. For the sake of convenience, we reproduce the findings of the CIT(A) as under:- -700/Bang/2022. M/s.Concorde Housing Corporation Private Limited. 8. Aggrieved by the order of the CIT(A), the assessee has field the present appeal before the Tribunal. The assessee has filed common paper book for all the three assessment years containing 293 pages, which is placed on record. The learned AR submitted that the A.O. is not justified in dismissing the rectification application filed by the assessee. The learned AR submitted that in the income-tax return filed in pursuance of notice u/s 153A of the Act, the assessee had claimed deduction u/s 80-IB of the Act at Rs.19,04,92,977 and the total income declared by the assessee at Rs.6,55,36,670/-. In the original return filed by the assessee, the income was shown at Rs.8,23,30,160/-, which was filed on 29.11.2013. The MAT credit was also claimed at Rs.2,70,92,150/-. The difference in original return filed and the return filed in response to notice u/s 153A of the Act was only because of lower claiming of deduction u/s 80-IB at Rs.1,67,93,487/- (other income of Rs.7,38,190 and closing stock of Rs.1,60,55,299) which was not claimed in the original return filed by the assessee. The learned AR referred to paper book page No.53, which is the assessment order and submitted that the A.O. assessed the income at Rs.8,23,30,160/- whereas the return filed by the assessee in response to notice u/s 153A of the Act is Rs.6,55,36,670. But in the assessment order, the A.O. has mentioned the same figure as filed by the assessee in his original return u/s 139(1) of the Act on 29.11.2013, i.e., Rs.8,23,30,160 without discussing anything in his order, which is a mistake apparent from record, which could be rectified, but the A.O. rejected the claim of the assessee. The learned AR further submitted that the CIT(A) had noted in his order that the issue is debatable. In one side the CIT(A) himself accepted that the issue is debatable, then the debatable issue cannot be rectified but in the subsequent assessment years, i.e., A.Y. 2016-2017 and 2017-2018 the Department had accepted that it is not a debatable issue. Therefore, there is a controversy in the finding of the CIT(A). Therefore, not

On the other hand, the learned Departmental Representative relied on the orders of the lower authorities and submitted that the lower authorities were rectified in not granting rectification application filed by the assessee as per section 154 of the I.T.Act. The learned DR submitted that the returned income filed u/s 139(1) and the income determined in reassessment proceedings (section 153A) should not defeat the purpose of the reassessment proceedings. The assessee has wrongly claimed deduction u/s 80-IB, which is more than the deduction claimed in the original return and he submitted that the case law relied on by the lower authorities are squarely applicable in the present case. Therefore, there was a mistake apparent on record and the MAT credit granted by the A.O. is correct and the CIT(A) has rightly confirmed the same. Therefore, the appeal of the assessee should be dismissed.

After hearing both the parties and perusing the entire material available on record, we observe that the assessee had filed its return of income u/s 139(1) of the Act declaring income of Rs.8,23,30,160 and as per MAT provisions, the income was declared at Rs.24,16,83,963. In pursuance of search carried out u/s 153A of the Act, the assessee filed return and declared income of Rs.6,55,36,670 after claiming deduction u/s 80-IB of the Act at Rs.19,04,92,977. The assessee had claimed MAT credit of Rs.2,70,92,150, which was revised by the A.O. at Rs.2,16,43,503. On going through the assessment order passed by the A.O., we notice that the A.O. has determined the income u/s 153A of Rs.8,23,30,160 without discussing how he has considered the income as filed by the assessee as per section 139(1) of the Act, quoted supra. The A.O. should have discussed in his order why the returned income u/s 139(1) of the Act has been accepted for the relevant assessment 22 ITA Nos.698-700/Bang/2022. M/s.Concorde Housing Corporation Private Limited. year. It is also not clear that which returned income has been accepted. A similar issue has been considered by the Hon’ble Supreme Court in the case of Pr.CIT (Central) v. Motisons Entertainment India (P.) Ltd. (2022) 443 ITR 6 (SC), in which case it has been held that the Hon’ble High Court has disposed of the appeal in one paragraph without discussing the issue, which arose for consideration. The relevant para of the above said judgment is as under:-

In our view, the High Court was not right and justified in disposing of the appeal with one paragraph order without discussing the issues which arose for consideration. We, therefore, allow this appeal, set aside the view taken by the High Court and remit the matter back to the High Court for fresh consideration. Income Tax Appeal No.137 of 2018 is thus restored to the file of the High Court to be decided afresh and purely on its own merits.”

From the above order of the Hon’ble Supreme Court, it is clear that the A.O. should have discussed in detail why the income declared by the assessee has not been considered. Therefore, it is a mistake apparent from record. Although the judgment rendered by the Hon’ble Supreme Court is on a different footing, and not on section 154 of the Act, the Hon’ble High Court did not discuss the issue in detail in the case cited (supra), therefore, the Hon’ble Supreme Court held that the High Court was not justified in disposing of the appeal. Following the same ratio, we also hold that there is mistake apparent from record in the order passed by the A.O. We further noted from the order of the 23 ITA Nos.698-700/Bang/2022. M/s.Concorde Housing Corporation Private Limited. CIT(A) that he had himself accepted that the issue is debatable. Once the issue is debatable the rectification cannot be made by passing order u/s 154 of the Act. Therefore, the MAT credit claimed by the assessee in the return of income at Rs.2,70,92,150 is correct and the order passed by the AO is not valid.

In the result, the appeal filed by the assessee for assessment year 2013-2014 is allowed.

As per the above table, for both the assessment years, the assessee has claimed excess MAT credit, which has been proposed to be rectified by the A.O. -700/Bang/2022. M/s.Concorde Housing Corporation Private Limited.

Since we have decided the issue in favour of the assessee for the assessment year 2013-14 and the assessee is eligible for MAT credit of Rs.2,70,92,150 in the assessment year 2013-2014, the consequential effect for MAT credit shall be carried forwarded for the subsequent years as cited (supra) in para No.6 of this order. From the above cited table, it is clear that the assessee has not claimed excess MAT credit for the assessment year 2016-2017 and 2017-2018. Therefore, there was no mistake apparent on the face of the record as stated by the A.O., which has been confirmed by the CIT(A). Accordingly, these appeals for the assessment years 2016-17 & 2017-18 are allowed.

In the result, the appeals filed by the assessee for assessment years 2013-2014, 2016-2017 and 2017-2018 are allowed. A common order passed be kept in respective case files.