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Income Tax Appellate Tribunal, MUMBAI BENCHES “C”, MUMBAI
Before: Shri Joginder Singh, & Shri Ashwani Taneja
आदेश / O R D E R Per Ashwani Taneja (Accountant Member): These appeals have been filed by the assessee and Revenue against the order of Ld. Commissioner of Income Tax (Appeals), Mumbai-16 {(in short ‘CIT(A)’}, dated 16.03.2011 passed against assessment order u/s 144 dated 10.12.2008 for the Assessment Year 2006-07.
During the course of hearing, arguments were made by Shri S.V. Joshi, Authorised Representative (AR) on behalf of the Assessee and by Shri M. Dayasagar, Departmental Representative (CIT-DR) on behalf of the Revenue.
We shall take up Revenue’s appeal in ITA No.4276/Mum/2011 for A.Y. 2006-07 The revenue has filed appeal on the following grounds: "1. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in treating the assessment completed by the ACIT(OSD) 8(3), Mumbai, as void ab-initio in the eyes of the law, ignoring the fact that the income as per the assessee's original return of income being Rs. 2,23,98,785/-, jurisdiction was vested with the ACIT(OSD) 8(3), Mumbai and not with the ITO -8(1)(2), Mumbai, as the revised income became nil only on account of set off of brought forward losses and not on account of reduction in the income of the current year per se." The appellant prays that the order of the CIT(A) on the above ground set aside and that of the A.O. be restored.”
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The additional ground raised by the revenue in this appeal is that Ld. CIT(A) has wrongly held that AO did not have jurisdiction to pass the impugned assessment order. It has been submitted by Ld. CIT-DR that the AO did not have information of the revised return of the assessee and therefore, in absence of such information the jurisdiction was rightly exercised by him on the basis of original return of income.
3.1. Per contra, Ld. Counsel of the assessee submitted that assessee had filed original return on 29.11.2006 and on the same date it revised its return which was filed electronically on 29.11.2006, and on the very next day, the revised return was also filed manually on 30.11.2006. Thus, it is wrong on the part of the Ld. CIT-DR to say that department had no knowledge about revised return. It was submitted that argument of Ld. CIT-DR is patently wrong and self- contradictory since jurisdictional officer i.e. ITO ward 8(1)-2 Mumbai had passed assessment order u/s 143(3) on the basis of revised return. It was further submitted that two assessment orders cannot be passed u/s 143(3) for the same assessment year. Since the impugned assessment order passed by the ACIT 8(3) Mumbai was beyond jurisdiction and therefore, it was rightly held by the Ld. CIT(A) as nullity. It has been further submitted that Ld. CIT(A) has deleted the additions made in the impugned assessment year on merits also. No ground has been taken by the revenue in the present appeal with regard to action of Ld. CIT(A) in giving relief on
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merits. Thus, the present appeal is infructuous and liable to be dismissed in any case.
3.2. We have gone through the submissions made by both the sides and orders of the lower authorities. It is noted by us that Ld. CIT(A) has carefully analysed the facts of the case and rightly held that the AO who had passed the impugned assessment order did not have jurisdiction to frame the assessment order. The relevant part of his order is reproduced below: “I have carefully considered the contention of the appellant company as well as carefully gone through the available documents on record. I find that this is the first year during which, the CBDT has allowed the assessees to file their return of income electronically. This being the first year, there were mistakes and problem in uploading the data of the return of the assessees. Several complaints of the cases of problems being faced by the assessees were noticed and reported in the several newspapers. In the appellant's case, the appellant filed its original return of income electronically on 29/11/2006 for the A.Y. in question and soon after filing it realized that there is a mistake in the return submitted electronically and soon thereafter on the same date i.e. 29/11/2006, the appellant again furnished a revised return which was given a provisional acknowledgement number. The reason for revising the return was that brought forward losses were not adjusted. The revised return was received by the Income tax Officer 8(1)-2 who after taking the details as furnished by the appellant from time to time assessed the appellant by passing an order u/s. 143(3) on 24/12/2008. Thereafter, the appellant received another order u/s. 144 passed by the ACIT 8(3) OSD, Mumbai based on the original return filed by the appellant as indicated above. My Ld. Predecessor called for a remand report on the subject and the ITO 8(1)-2 submitted a report which indicates that the case of the appellant for the AY 2007-08 was selected for scrutiny by the ITO Ward-8(1)3
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after obtaining the approval from the appropriate authority. Therefore, the proper jurisdiction of the cases lies with the ITO Ward 8(1)-3, Mumbai. Since, the income /loss of the appellant for the year under consideration was above Rs.10 lakhs, the case was supposed to be assessed under the jurisdiction of ACIT. Accordingly, ITO Ward 8(1)- .3 had transferred the case of the appellant to the ACIT (OSD) 8(3), Mumbai as during the year, the ACIT (OSD)-8(3) was having jurisdiction on alphabet 'C'. Subsequently, the ITO 8(1)-2 assessed the revised return of the appellant stating inter-alia on the order sheet note that this is an amalgamated company and has shown nil income. Accordingly, he issued notice u/s. 143(2) and assessed the income of the appellant as per order u/ s. 143(3). It is also a matter of fact that during the course of assessment proceedings, the appellant had submitted a copy of original return as well as the revised return to the ITO Ward-8(1)-2. On perusal of the return, it is evident that the appellant had a nil income after setting off of business losses and therefore the jurisdiction of the case lies with the ITO Ward-8(1)-2. It was also pointed out by the ITO 8(1)- 2 that notices were received by the appellant on Chembur address and ACIT OSD 8(3) also sent the notices to the same address. It was also pointed out by the ITO 8(1)-2 that the appellant had not brought this fact to the notice of the ITO 8(1)-2 as well as ACIT (OSD) 8(3). The Ld. Addl. CII, Range 8(1) in her letter dated 4/2/2010 addressed to CIT(A)-18 has admitted that though the PAN is with ITO 8(1)-3, Mumbai assessee's name starts with 'c' alphabet and hence ITO 8(1)-2 has right jurisdiction. 2.3.2 From the above, it is abundantly clear that the ITO Ward 8(1)-2 had the rightful jurisdiction over the appellant. The fact that both the returns i.e. original return as well as the revised return were filed in time. It is also a matter of fact that the original return whose income /loss was more than Z.10 lakh was transferred to ACIT (OSD) 8(3) as indicated by the transfer memo of ITO Ward 8(1)-3. However, since the revised return was having a nil income, the same was received in its rightful jurisdiction i.e. ITO 8(1)-2. It is also a matter of fact that the appellant had submitted copies of both the original return and revised return to the office of ITO 8(1)-2 during the course of
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assessment proceeding, I find that the appellant had discharged its onus of informing that a revised return was submitted. 2.3.3 The legal position in respect of the revised return has been explained in sub-sections (4) and (5) of section 139 of the Act which permits the filing of revised returns. Sub-section (4) permits a person who has not furnished a return within the time allowed under sub- section (1) of section 139 or within the time allowed under a notice issued under section 142(1) of the Act to file the return for any previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of assessment, whichever is earlier. Sub-section (5) concerns a taxpayer who has already filed a return. This sub-section provides that having furnished a return under section 139(1) or in response to a notice received under section 142(1), if a taxpayer discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. Thus, a one-year time limit has been provided for both the situations. 2.3.4 Prior to the change introduced by the Finance Act, 1968 in section 153(1)(a), the time limit for filing a return suo motu was uniformly 4 years from the end of the relevant assessment year. From the assessment year 1969-70, a two-year period was substituted for 4 years. This time limit was further reduced to one year from the relevant assessment year by the Direct Tax Laws (Amendment) Act, 1987 with effect from April 1, 1989, i.e., from the assessment year 1989-90. As per sub-sections (4) and (5), the time limit for filing the revised return is one year from the end of the concerned assessment year or the completion of assessment, whichever is earlier.
2.3.5 Regarding a return filed under sub-section (5), the legal position is as under: (a) an assessee can file a revised return before the end of the year immediately succeeding the assessment year, notwithstanding the fact that there has been computation under section 143(1) of the tax payable by or the
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amount refundable to him, unless the case is taken up for scrutiny under section 143('3); and b) where the assessment is taken up for scrutiny, a revised return can be filed either before the completion of the assessment or before the end of the year immediately succeeding the assessment year, whichever is earlier. Within the tin-ic limit, the Act now permits the filing of multiple revised returns, notwithstanding the computation of tax and sending of intimations as required under section 143(1).This is for the reason that since the revised return, once filed, replaces the original return and, so to say, acquires the nature and character of the originally filed return, such revised return can again be revised vide the Allahabad High Court's decision in Niranjan Lal Ram Chandra v. CIT 134 ITR 351 Further as is apparent from the language used in section 143(3), the Assessing Officer, in case of assessments taken up for scrutiny, cannot determine the income at lower than the income returned. As such, in case any omission as aforesaid is noticed before the completion of assessment, the best alternative is to file a revised return provided the same could be done before the end of the year following the assessment year under consideration. 2.3.6 The main thrust of section 139(5) is to provide an opportunity to the assessee to rectify voluntarily, if there is any omission or mistake or wrong statement in the original return. The word may' used under section 139(5) denotes 'option' given to the assessee to file a revised return. A revised return cannot be filed after the assessment has been completed. Esthuri Aswathiah v. ITO [1961] 41 ITR 539 (SC) and section 139(5) would apply only when there is omission or wrong statement which has a bearing on assessment - Halima Fancy Stores v. CIT [1976] 104 ITR 190 (Mad.), CIT v. J.K.A. Subramania Chettiar [1977] 110 ITR 602 (Mad.), Addl. CIT v. Radhey Shyam [1980] 123 ITR 125 (All.). To file a revised return, no prior permission is required - Waman Padmanabh Dande v. CIT [1952] 22 ITR 339 (Nag.). According to the plain language of section 139(5), it would apply when return of income is filed pursuant to section 139(1) or under section 142(1). 2.3.7 Therefore, the position of law is very clear, the
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moment a revised return is filed, it replaces the original return and, so to say, acquires the nature and character of the originally filed return. Therefore, the original return become non-est in the eyes of law until and unless it is proved that the revised return is not valid under the law or not validly filed. That is not the case here. In fact, both the returns were filed in time and there was a valid reason for revising the return in the circumstances and facts as narrated above. Both the ITO Ward-8(1)-2 and ACIT treated both the return as valid and proceeded to complete the assessment. However, the assessment completed on the original return become void as it was completed on a return which in the eyes of law is a non-est. Therefore, technically, the assessment completed on original return by the ACIT (OSD) 8(3) is void ab-initio in the eyes of law.”
3.3. It may be noted from the above that the revise return filed by the assessee was a valid return. As per revised return the jurisdiction of framing the assessment was with ITO 8(1)-2, and certainly not with ACIT 8(3). Thus, under these circumstances, the impugned assessment order is beyond jurisdiction and rightly quashed by the Ld. CIT(A). We do not find anything wrong in the order of the Ld. CIT(A) on this issue and the same is upheld. It is further noted by us that the Ld. CIT(A) has deleted all the addition on merits also vide para 2.3.8 of his order. Relief grant by the Ld. CIT(A) has not been challenged by the revenue before us. Thus, in substance, the present departmental appeal is infructuous. Resultantly appeal filed by the revenue is dismissed.
Now we shall take up assessee’s appeal in ITA No.1608/M/2011 for A.Y. 2006-07 This appeal has been filed against the order passed by the Ld. CIT(A) dated 24.12.2010 passed against the
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assessment order dated 24.12.2008 u/s 143(3) by the ITO(8)(1)-2 Mumbai on the following grounds:
“i. That the learned Commissioner (Appeals) erred in considering the credit balance of Sales Tax Deferred of Rs 83,68,014/- under Package scheme of Incentives, 1993 of Government of Maharashtra as income from undisclosed sources u/s 269SS. The appellant is required to repay the deferred sales tax in installments to the sales tax department. ii. That the learned Commissioner (Appeals) had erred in disallowing Rs 14,82,256/- u/s 43B on account of Excise duty provision on closing stock of Finished Goods and scrap as on 31.03.2006. The duty was paid in April 2006 & May 2006 when the goods were dispatched i.e. much before the due date of filing of the Income Tax Return. iii. That the learned Commissioner (Appeals) had erred in disallowing Rs 28,92,550/- u/s 40 (a) (ia) on account of late deposit of TDS on transportation expenses. As per the provisions prevailing at the time of depositing the TDS, expenses were allowable. The disallowance was as per the retrospective amendment in the said section by Finance Act, 2008. (iv) That the assessing officer had erred in giving short credit of TDS amounting to Rs 5,54,787/- particularly in the name of Sanuj Steels Private Limited (later on known as Confidence Cylinders & Petrochem Pvt Ltd.) which was amalgamated with the appellant company by the order of High Court w.e.f. 01.04.2005.”
Ground No.1: This ground was not pressed by the Ld. Counsel and therefore dismissed.
Ground No.2: In this ground it has been contended by the Ld. Counsel that provisions of excise duty was disallowed u/s 43B on the ground that it was not paid during the year. It should be allowed in the year when it was paid. Ld. CIT-DR did not oppose the submissions of the assessee. Under these
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circumstances, after perusing the facts of the case, we are of the opinion that in case excise duty has been paid by the assessee then its deduction has to be allowed under the law in the year in which it is paid, keeping in view the provisions of section 43B of the Act. Under these circumstances, accepting request of the Ld. Counsel, we send this issue back to the file of the AO to make requisite verification of the facts. The deduction should be granted in the year in which excise duty has been paid. The AO shall give adequate opportunity of hearing to the assessee to prove the relevant facts. This ground may be treated as partly allowed for statistical purposes.
Ground No.3: In this ground, the assessee has challenged the action of lower authorities in disallowing transportation expenses on the late deposit of TDS u/s 40(a)(ia). In this case also the request of the Ld. Counsel was similar to the request made in Ground No.2. It has been requested that amount should be allowed in the year in which TDS deducted has been deposited. Thus, keeping in view facts and circumstances of the case, this issue is also sent back to the file of the AO for verification of facts and allowing the expenses in the year in which TDS has been deposited. This ground may be treated as partly allowed for statistical purposes.
Ground No.4: in this ground the assessee has challenged the action of lower authorities in giving short credit of TDS amounting to Rs.5,54,787/- in the name of M/s Sanuj Steels
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P. Ltd. which was amalgamated with the assessee company by the order of the High Court w.e.f. 1.04.2005.
8.1. We have heard both parties on this issue. The legal position in this regard is that credit of TDS has to be granted where the income has been assessed. Thus, we send this issue also back to the file of the AO to verify the facts that income earned from M/s. Sanuj Steels P. Ltd. has been included in the income of the assessee company post amalgamation. If the income has been included in the profit and loss account or return filed by the assessee, the credit of the TDS deducted on such income should be granted by the AO. The AO shall give adequate opportunity of hearing to the assessee to prove requisite facts in this regard. With these directions, this ground is sent back to the file of the AO and may be treated as partly allowed for statistical purposes.
In the result, this appeal filed by the assessee may be treated as partly allowed.
Order pronounced in the open court on 20th May, 2016.
Sd/- Sd/- (Joginder Singh) (Ashwani Taneja) �या�यक सद�य / JUDICIAL MEMBER लेखा सद�य / ACCOUNTANT MEMBER मुंबई Mumbai; �दनांक Dated: 20 /05/2016 ctàxÄ? P.S/.�न.स.
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आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. आयकर आयु�त(अपील) / The CIT, Mumbai. 4. आयकर आयु�त / CIT(A)- , Mumbai 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai 6. गाड� फाईल / Guard file.
आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy// उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील�य अ�धकरण, मुंबई / ITAT, Mumbai