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Income Tax Appellate Tribunal, “SMC-C” BENCH : BANGALORE
Before: SHRI JASON P BOAZ
4.1 In this appeal, directed against order of CIT(A)-6, Bangalore, dated 23.01.2018 for Assessment Year 2014-15, the assessee has raised the following grounds:
That the order of the Commissioner of Income Tax (Appeals) in so far is prejudicial to the interests of the appellant in so far is bad and erroneous to the facts and circumstances of the case. 2. That the learned Commissioner of Income Tax (Appeals) erred in law and on facts in assessing the total income at Rs. 27,94,345/- without considering the expenditure of Rs. 12,48,246/-claimed in the revised return filed. 3. That the learned lower authorities erred in law and on facts in holding that the appellant has not produced any proof for expenses claimed in the revised return of income and such finding is perverse and contrary to the materials available on record.
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4.2.1 The learned AR of the assessee was heard in support of the grounds raised. In written submissions filed before the Bench, the learned AR has submitted as under:-
The appellant is a company assessed to income tax by the learned Assistant Commissioner of Income Tax (OSD). For the AY 2014-15 the appellant filed a return of income declaring a total income of Rs. 27,94,350. The returned income was based on unaudited provisional financial statements. Later, the appellant filed a revised return wherein the total income was declared at Rs. 15.73.400/-. The revised return was based on the audited financial statements. 2. In the assessment proceedings the learned assessing officer held that the difference between original return and the revised return was Rs. 12,48,246 and the appellant had not furnished anti supporting documents for claiming the extra expenditure incurred towards labour charges, rent and audit fee. The appellant submitted that these expenses were outstanding as on 31St March 2014 and in the provisional financial statements no provision was made towards such expenses. The learned assessing officer assessed the income on the basis of the original return. On appeal, the learned CIT (A)held that the appellant had not paid the self-assessment tax due on the original return and the revised return was filed only to cover up this defect. The appeal was dismissed. 3. It is submitted that the appellant did not bring the fact that the original return was filed based on unaudited provisional financial statement and the revised return was filed on the basis of audited financial statement. It is a fact that the revised return is available on record as both the learned assessing officer and the learned Commissioner of Income Tax (Appeals) have referred to this fact in the respective orders. During the hearing, learned DR confirmed that audited financial statements are available in assessment records Hence, it is prayed that the Hon'ble Bench be pleased to remand the case back to the files of the assessing officer so that a proper assessment can be made taking into account all the evidences.
4.3 Per contra, the learned DR for Revenue supported the orders of the authorities below.
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4.4.1 I have considered the rival contentions / submissions and carefully perused the material on record. The facts of the matter, as emerge from the record are that the assessee filed its return of income for Assessment Year 2014-15 on 01.10.2014 declaring income of Rs.27,94,350/-. Subsequently, the assessee filed a revised return of income on 29.09.2015, wherein the income declared was revised to Rs.15,73,400/-. The AO, on examination thereof, noted that the assessee had neither furnished details nor supporting documents to reconcile the difference of income of Rs.12,48,246/- in the revised return vis-à-vis the income declared in the original return of income. The AO concluded the assessment taking the assessee’s income at Rs.27,94,345/- as declared in the original return of income after examining the Profit and Loss Account and the 26AS. On appeal, the CIT(A) upheld the AO’s order holding that the assessee had not paid self-assessment tax due on the income declared in the original return and that the revised return of income showing reduced income was filed only to overcome this defect.
4.4.2 It is seen that on the one hand, the AO has held against the assessee stating that details / supporting evidence were not filed to reconcile the difference in Income between Rs.27,94,350/- declared in the original return of income and the income of Rs.15,73,400/- in the revised return. The CIT(A), without addressing the grounds raised by assessee in the single hearing held on 22.01.2018, has upheld the AO’s order on the ground that the revised return filed showing reduced income of Rs.15,73,400/- was only with the purpose of covering up the assessee’s failure to pay self assessment tax on the originally declared income. On the other hand, the AR in submissions before the Bench (supra), states that the original return was filed based on unaudited provisional financial statement, whereas the revised return was filed on the basis of audited financial statements and that the same is available on the record. This fact was not controverted by the learned DR for Revenue. Taking into account the facts and circumstances of the case and the orders of the authorities below, it appears that there has not been proper examination / verification of the matter as
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though the AO states that no details / corroborating evidences were field, the learned AR submits that corroborating details / reconciliation etc., for revised income of Rs.15,73,400/- are available on the records of the Department, filed as part of the audited financial statements along with the revised returns. In this factual matrix of the case, I am of the opinion that in the light of discussion on the impugned orders of the authorities below and the averments of the learned AR of the assessee, the interest of substantial justice would be served by setting aside the impugned orders of the authorities below and therefore restore the matter to the file of the AO for examination, verification and determination of the correct income of the assessee viz., whether at Rs.27,94,350/- as per original return of income for Assessment Year 2014- 15 or at Rs.15,73,400/- as per the revised return of income filed for this year taking into account and addressing all the claims of the assessee. Needless to add, the AO shall afford the assessee adequate opportunity of being heard and to file details / submissions required, that shall be considered before deciding the issue.
In the result, the assessee’s appeal for Assessment Year 2014-15 is treated as allowed for statistical purposes.
Order pronounced in the open court on this 10th day of April, 2019.
Sd/- Sd/- Sd/- (N. V. VASUDEVAN) (JASON P BOAZ) Vice President Accountant Member Bangalore. Dated: 10th April, 2019. /NS/*
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Copy to: 1. Appellants 2. Respondent 3. CIT 4. CIT(A) 5. DR 6. Guard file By order
Assistant Registrar, ITAT, Bangalore.