M/S SMS INFRASTRUCTURE LTD,NAGPUR vs. D.C.I.T. CENTRALCIRCLE 2(3), NAGPUR

In its appeal, the assessee has raised following grounds:–

Facts in brief:- The assessee is a company engaged in the business of development of infrastructure projects. The assessee’s due date of filing of return of income under section 131 Income Tax Act, 1961 ("the Act") was on 30/09/2008, however, the return of income was filed belated on 08/12/2008, in which it claimed deduction of ` 4,49,96,757 under section 80IA of the Act. Subsequently, the assessee filed a revised computation of income on 26/12/2008, claiming deduction under section 80IA of the Act of ` 3,45,03,153. The Assessing Officer passed assessment order under section 143(3) of the Act on 31/12/2008, on a total income of ` 15,25,92,530, after allowing deduction of ` 3,45,03,153, under section 80IA of the Act. After completion of the assessment, a show cause notice dated 21/02/2011, under section 154 of the Act was served upon the assessee 25/02/2011, by the Assessing Officer proposing to withdraw the claim of ` 3,45,03,153, which was allowed under section 80IA of the Act, for the reason that the return of income filed by the assessee on 08/12/2008, was a belated return of income and, therefore, as per the provisions of section 80AC of the Act, no deduction under section 80IA of the Act would be allowed to the assessee. The assessee filed a reply to the show cause notice issued by the Assessing Officer under section 154 of the Act as under:-

The Assessing Officer, after considering the explanation of the assessee, he has rectified the mistake committed by him by allowing the claim of the assessee under section 80IA of the Act and passed under section 154 of the Act on 10/03/2011. Aggrieved, the assessee preferred appeal before the learned CIT(A). The learned CIT(A) dismissed the appeal of the assessee. The assessee being aggrieved filed appeal before the Tribunal. The Tribunal directed the learned CIT(A) to decide all the grounds raised by the assessee afresh. The learned CIT(A), following the directions of the Tribunal, by relying upon various case laws, dismissed the appeal of the assessee. Once again, the assessee being aggrieved filed appeal before the Tribunal.

Before us, the learned Counsel for the assessee submitted that once the Assessing Officer allowed the claim of the assessee, he cannot disallow the same under section 154 of the Act. Originally the order passed by the Assessing Officer is not a mistake apparent on record and it cannot be rectified under section 154 of the Act. He further submitted that whether the Assessing Officer can invoke the provisions of section 154 in a case the claim is already allowed by him is a debatable issue and, therefore, the Assessing Officer was not justified in invoking the provisions of section 154.

On the other hand, the learned Departmental Representative strongly supported the order passed by the learned CIT(A). Page | 3

We have heard the rival arguments, perused the material available on record and gone through the orders of the authorities below It is admitted fact that the assessee has filed a return of income belated and claimed under section 80IA of the Act. The Assessing Officer, without verifying whether the return of income is filed in time or not, allowed the claim. When the assessee is making a claim, he has to file return of income in time otherwise as per the provisions of section 80AC of the Act, no deduction under section 80ITA of the Act would be allowed. Prima-facie, the Assessing Officer committed a patent mistake allowing the claim of the assessee. The mistake committed by the Assessing Officer is a mistake apparent on record. In our opinion, the mistake committed by the Assessing Officer which is apparent on record can be rectified by the Assessing Officer under section 154 of the Act. In this case, the Assessing Officer has rightly invoked provisions of section 154 of the Act and rectified the mistake committed by him. Moreover, the rectification done by the Assessing Officer in this case is not at all a debatable issue for the reason that it is an admitted fact that the assessee filed return of income belatedly. As per the provisions of section 80AC of the Act, no claim can be allowed if the return of income is filed belatedly. Therefore, the Assessing Officer has rightly exercised his power and rectified the mistake and no debatable issue is involved. The learned Counsel for the assessee relied upon the following case laws in support of his arguments:-

On a perusal of the aforesaid case laws, we find that all of them are distinguishable in nature and the facts and circumstances are different, hence, not applicable to the facts and circumstances of the present case. Consequently, we are decline to accept the same and accordingly in view of our findings as aforesaid, all the grounds raised by the assessee are dismissed.

In the result, assessee’s appeal is dismissed. Order pronounced in the open Court on 03/06/2024