THE RAJ MATCH WORKS,SIVAKASI vs. DCIT CPC, BENGALURU

This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals) 1, Madurai, dated 04.03.2019 relevant to the assessment year 2009-10. In the grounds of appeal, the assessee has challenged the order of the ld. CIT(A) on dismissing the appeal on technical ground of filing of electronic revised return in ITR 5 was beyond the time allowed for considering the claim of depreciation.

Brief facts of the case are that the assessee is a partnership firm and filed e-return of income declaring a total income of ₹.5,20,537, which includes the depreciation on assets claimed for the period from 01.08.2008 to 31.03.2009 during which the assessee carried on the business as partnership firm. While processing the return, the CPC disallowed the depreciation claimed for 8 months. On appeal, the ld. CIT(A) dismissed the appeal by holding that the CPC has not committed any error in processing the return.

On being aggrieved, the assessee is in appeal before the Tribunal. The ld. Counsel for the assessee has submitted that when the revised ITR in Form ITR-V dated 01.11.2016 was accepted by the Department, disallowing the claim of depreciation on the ground that the revised return in ITR V is time barred is not correct while the said valid return was processed under section 143(1) of the Act and prayed directing the Assessing Officer to allow the claim of the assessee by filing copy of the judgement in the case of Sree Jayajothi & Co. Ltd. v. CIT in TCA No. 471 of 2006 dated 11.09.2012. On the other hand, the ld. DR supported the order passed by the ld. CIT(A).

We have heard both the sides, perused the materials available on record and gone through the orders of authorities below including paper book. In para 6 of the appellate order, the ld. CIT(A) has observed that the valid revised return filed by the assessee was processed under section 143(1) of the Act by the CPC, wherein, the CPC has, based on the values reflected in appropriate paras, disallowed the claim of depreciation which was apparently not filed in the required para of the said original ITR, which was revised and held that the CPC has not committed any error while processing the return under section 143(1) of the Act. Just because the assessee has not filed the claim in the required para of the original return, any claim of the assessee cannot be rejected out rightly. E-filing of return was mandated since last three-four years only and the Department cannot expect each and every citizen should fill the columns without mistake. The omission/commission is human error, which could be rectified subsequently. In para 7 of the appellate order, the ld. CIT(A) has stated that the filing of electronic revised return in ITR-V on 01.11.2016 was beyond the time allowed vide circular 13/2016 and if it is so, how the CPC has processed the time barred revised return under section 143(1) of the Act. It is not the case of the Department that the assessee has filed the belated return. In this case, the assessee has filed its original return of income on 25.09.2009, well within the time prescribed under section 139(1) of the Act, whereas, the CPC processed the return and sent an intimation dated 03.10.2016, wherein the income retuned was enhanced and a demand of ₹.1,58,967/-, which is clearly barred by limitation under section 143(1) of the Act. When the department insisted for e-verification and allowed extension of e-verifying, the assessee has e-verified and sent the ITR-V to the CPC. While submitting a copy of the revised ITR in Form ITR-V, the assessee noticed that depreciation value was wrongly entered in the schedule “DEP as ₹.3,87,644/- instead of ₹.2,58,557/-, which was shown under para 12(ii) of Schedule “BP” and sought for remedy from the first appellate authority, which was denied. As has been held by various courts, the legitimate claim which is otherwise eligible to an assessee, should not be deprived of, we set aside the order of the ld. CIT(A) and remit the matter back to the file of the Assessing Officer to examine with regard to the eligibility of depreciation claimed by the assessee in accordance with law after allowing an opportunity of being heard to the assessee and allow the claim, if eligible. Accordingly, the ground raised by the assessee is allowed for statistical purposes.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on the 24th September, 2019 in Chennai.