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Income Tax Appellate Tribunal, DELHI BENCH: ‘D’ NEW DELHI
Before: SHRI H. S. SIDHU & SHRI L.P. SAHU
ORDER PER H.S. SIDHU, JM This appeal is filed by assessee against the Order passed by the Ld. CIT(A), Ghaziabad relating to Assessment Year 2012-13 on the following grounds:-
1. The order dated 31.3.2017 passed by the Ld. CIT(A) u/s. 250 of the I.T. Act, 1961 is bad in law and on facts. 1.1 The order of the Ld. CIT(A) determining the income of the appellant at Rs. 1,96,83,720/- as against the revised
income of Rs. 33,99,080/- filed by the appellant during the course of assessment proceedings is bad in law and on facts.
2. That the Ld. CIT(A) while sustaining the contention of the AO has erred in ignoring the detailed submissions
filed by the appellant during the course of assessment proceedings in support of their contention.
(ii) That the Ld. CIT(A) was not justified in sustaining the contention of the AO without giving any meaningful opportunity of being heard to the appellant.
The Ld. CIT(A) while sustaining the contention of the AO
has erred in ignoring the fact that a revised computation of income was filed by the appellant before the AO during the course of assessment proceedings.
(ii) The Ld. CIT(A) has erred in accepting the contention of the AO that the claim of the appellant could have only be made by way of filing a revised return and the taxable income could not be reduced by way of filing a revised computation during the course of assessment proceedings.
4. The Ld. CIT(A) has further erred in ignoring the fact that the AO has violated the settled principles of natural
justice by not issuing any specific notice to the appellant before rejecting the revised computation of income filed by the appellant during the course of assessment proceedings.
5. That on the facts and in law, the AO has erred in charging interest u/s. 234B & 234C of the Act.
6. The penalty proceeding initiated u/s. 271(1)(c) of the Act
is legally incorrect and needs to be dropped.
The appellant craves leave to add, amend or modify any ground before or at the timed of hearing of the appeal.
Facts narrated by the revenue authorities are not disputed by both the parties, hence, the same are not repeated here for the sake of brevity.
3. At the time of hearing, Ld. Counsel of the Assessee has stated that Ld. CIT(A) while sustaining the contention of the AO has erred in ignoring the fact that a revised computation of income was filed by the assessee before the Assessing Officer during the course of assessment proceedings. He further submitted that Ld. CIT(A) has erred in ignoring the fact that the AO has violated the settled principles of natural justice by not issuing any specific notice to the assessee before rejecting the revised computation of income filed by the assessee during the course of assessment proceedings, which is against the principle of natural justice and not sustainable in the eyes of law. Hence, he requested that the issue in dispute may be set aside to the file of the AO with the directions to consider the revised computation in accordance with law and then decide the issue in dispute afresh, after giving adequate opportunity of being heard to the assessee, as per law.
On the contrary, Ld. DR relied upon the orders of the authorities below and stated that Income Tax Act, 1961 provides sufficient time to revise the Income Tax Return filed. It was further submitted that if the assessee had made any genuine mistake in the ITR filed, he should have and would have revised it within time given u/s 139 of the I.T. Act, 1961. The scrutiny proceedings u/s 143(3) of the I.T. Act, 1961 are not a method to reduce the taxable income from the IT Act.
After considering the above reasoning and legal position, the claim of the assessee to reduce the taxable income, without revising the ITR, cannot be accepted. Therefore, he submitted that the lower authorities below has rightly rejected the claim of the assessee and made the assessment accordingly, which does not need any interference on our part and therefore requested to uphold the impugned order and dismissed the appeal of the assessee.
We have heard both the parties and perused the records especially the orders of the authorities below. We find that the assessment in this case was completed u/s. 143(3) of the Act on 19.3.2015 whereby the income of the assessee was assessed at Rs. 1,96,83,720/-. For the year under consideration, the assessee company e-filed the return on 31.3.2013 declaring income of Rs. 1,89,83,720/-. During assessment proceedings, a revised computation was submitted on 22.12.2014 reducing the taxable income to Rs. 33,99,080/- wherein value of closing stock was decreased and depreciation claimed was also reduced. The major reasons were basically change of auditors at the last moment and it was only at the time of finalizing the accounts for the FY 2013-14 and having realized the high figure of loss, the whole stock position as examined critically by the auditors and the position was updated and revised computation was filed. The assessee also submitted a certificate from auditor regarding justification of reduction in value of inventory. The AO issued notices and complete details were furnished. The AO examined both the claims extensively and critically with reference to the books of accounts and no defect had been pointed out as far as the working of the valuation of closing stock and admissibility of depreciation is concerned. We note that only objection of the AO was that the assessee should have revised the computation it within time given u/s. 139 of the I.T. Act, 1961 and considering the above reasoning and legal position, the claim of the assessee to reduce the taxable income, without revising the ITR, cannot be accepted.
Keeping in view of the facts and circumstances of the case, the reasons for filing the revised computation during the assessment proceedings were quite genuine, hence, the action of the lower authorities in ignoring the revised computation of income filed during the assessment proceedings is not sustainable in the eyes of law.
Therefore, we set aside the issues in dispute to the file of the AO to decide the same afresh, after considering the revised computation of income of the assessee and give adequate opportunity of being heard to the assessee. Assessee is also directed to fully cooperate with the AO in the proceedings and did not take any unnecessary adjournment.
In the result, the appeal filed by the assessee stands allowed for statistical purposes.
Order pronounced on 19/12/2018.