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Income Tax Appellate Tribunal, “SMC” BENCH : KOLKATA
Before: Hon’ble Sri N.V.Vasudevan, JM ]
Date of Hearing : 17.03.2016. Date of Pronouncement : 6.4.2016. ORDER This is an appeal by the Assessee against the order dated 17.07.2015 of CIT(A)-6, Kolkata relating to AY 2010-11.
There is a delay of about 47 days in filing the present appeal by the assessee before the Tribunal. It has been mentioned in the affidavit filed by one of partners of the assessee firm that the impugned order of CIT(A) was received by assessee and was handed over to the assessee’s Advocate one Mr.P.K.Das for filing the appeal before the Tribunal. Because of the advocate’s illness the same was not filed in time. He finally returned the relevant papers to the assessee on 06.11.2015 expressing his inability to take up the Assessee’s case. Thereafter the appeal papers were given to the present Chartered Accountant, who filed it with a delay of 47 days in filing the appeal. The erstwhile advocate of the Assessee has also sworn to the facts stated by the Assessee in the petition for condonation of delay. In the light of the reasons given for the delay in filing the appeal, I am of the view that the delay in filing the appeal has to be condoned as the delay has occurred due to reasonable and sufficient cause. The delay in filing the appeal by the assessee is accordingly condoned. -Medi-Scan-A.Y.2010-11 1
As far as the merits of the assessee’s appeal is concerned, the facts are that the Assessee is a partnership firm. For A.Y.2010-11 the assessee filed return of income electronically declaring the total income of Rs.1,34,450/- (which comprises only of income under the head “Income from Business or Profession”). The return of income was processed electronically and an intimation u/s 143(1) of the Act dated 25.02.2011 was issued accepting the total income returned by the assessee.
By an order dated 30.05.2012 passed u/s 154 of the Act an intimation dated 25.02.2011 was amended whereby the total income of the assessee was determined at Rs.5,00,100/-. 5. Against the aforesaid order dated 30.05.2012 the assessee preferred appeal before CIT(A). Before CIT(A) the Assessee pointed out that the income declared in the return of income by the Assessee at Rs.1,34,445/- was erroneous and was based on the profit as per profit and loss account of Rs.4,95,638/-. This profit as per profit and loss account was wrongly calculated because of over valuation of closing stock by Rs.6310 and non allowance of remuneration of partners and interest on their capital of Rs.4,93,790/-. If both the above figures are considered then there would be a loss of Rs.4462 as per the profit and loss account. The consequent total income that should be arrived at would be loss of Rs.4462/-. The Assessee had pointed out that the excess net profit would be Rs.5,00,100 (Rs.6310 + Rs.4,93,790). The Assessee pointed out these facts to the AO. The AO however understood the above facts as an admissible by the Assessee that its income was understated by Rs.5,00,100 and he proposed a rectification of the intimation u/s.143(1) of the Act by issuing a notice u/s.154 of the Act dated 27.1.2012 and thereafter passed the impugned order u/s.154 of the Act. The Assessee pointed out before CIT(A) that the AO has not properly its stand before the AO and the AO passed the impugned order u/s.154 of the Act dated 25.2.2011 whereby he determined the total income of the Assessee at Rs.5,00,100/-. We must point out that the Grounds of appeal
filed by the assessee before CIT(A) was not happily worded in this regard and it read as follows :-
1. Your petitioner has filled rectification request u/s 154 on 23.04.2012. But CPC Bangalore did not accept the same and send the demand notice of Rs.1,80,330/.-. -Medi-Scan-A.Y.2010-11 2
2. For acceptance of notification request of combined profit of both centre. Through Profit & Loss A/c shoed a loss of Rs.4,462/- due to wrong casting of balance inspite of profit of Rs.24,709 and deposited a total Tax of Rs.9,162 on 29-3-2012. Hence, your petition assets that the rectification request should not considered by CPC, Bangalore, may be accepted. 6. Before CIT(A), the stand of the Assessee was that at the time of filling return of income in Form No. ITR- V its tax consultant did not properly fill the form properly. The Assessee pointed out that it had two units in the trade name of M/ S MEDI SCAN, Arindam Complex, Amarabati More, Sodepur, Kolkata, and another at 1,K.D Complex, Basudevpur Road, 2 Anjangarh, Feeder Road, Shyamnagar, 24 PGS(N). During the F. Y 2009-10, Amarabati (Sodepur Units) had a profit of Rs. 60,300/ - while Shyamnagar unit incurred loss of Rs. 64,762/-. As a result the net loss to the Assessee was Rs. 4,462/-. It was inadvertently shown in I.T.R- V that the Gross total Income of the Assessee was Rs.1,34,445/ - as against loss of Rs. 4,462/-. The Assessee pointed out that it had filed a Revised return but that was also incorrectly filled up by its Tax Consultant. As a result, Computerised Processing Centre (CPC) Bangalore sent demand notice of Intimation u/ s 143(1) for Rs. 48,480/- vide intimation dated 25.2.2011. The Assessee also pointed out that it applied for rectification u/s 154 to CPC, Bangalore against above order and submitted copies of Profit and Loss A/ C and Balance Sheet. Thereafter the Assessee had submitted online rectification request u/s 154 on 23.04.2012. The Assessee pointed out that the CPC Bangalore raised a demand of Rs. 1,80,330/- in its order dated 30.5.2012 which was in challenge before CIT(A). 7. It is seen that the CPC, Bangalore, had issued a notice u/s 154 dated 27.01.2012 which reads as under:- " The Order passed under Sec 143(1) dated 25/02/2011 in your case is required to the amended as there is a mistake, as per details from the records within the meaning of section 154 of the Income Tax Act, 1961. The rectification of the mistake, as per details given below will have the effect of enhancing the assessment/ reducing the refund/increasing your liability.
In case you have any objections to the same, your written reply on the attached response sheet should reach this office within 15 days from the date of receipt of this notice. Response sheet is attached to this notice.
-Medi-Scan-A.Y.2010-11 3
Particulars of the mistake proposed to be rectified.
‘SAME AMOUNT OF DEPRECIATION HAS BEEN CLAIMED BY YOU IN THE SCHEDULE BP U/S 32(1)(i) AND 32(1)(ii) IN THE RETURN OF INCOME AFORESAID DEPRICIATION U/S 32(l)(i) CLAIMED IN THE RETURN OF INCOME AND ALLOWED WHILE PROCESSING IS PROPOSED TO BE WITHDRAWN AS DEPRECIATION U/S 32(1)(i) IS NOT ALLOWABLE IN YOUR CASE, SINCE THE NATURE OF BUSINESS IN YOUR CASE IS NOT GENERATION AND DISTRIBUTION OF POWER WHICH ARE COVERED UNDER BUSINESS CODE 114 IN SCHEDULE NATURE OF BUSINESS IN THE R/ I.’
The CIT(A) however dismissed the appeal of the Assessee observing as that it appears that the order u/s 154 dated 30.05.2012 was passed in consequence of the notice dated 27.1.2012 discussed above. The CIT(A) held that the Appellant has not made any submissions about the nature of mistake described in the notice. The CIT(A) also observed that during the appellate proceedings also, the AR simply simply relied upon the statement of facts and furnished a written submission stating that there were certain mistakes in filling the e-return while furnishing details of the gross receipts and partners' remuneration. The CIT(A) further observed that it also appears that the notice of the CPC was not responded to. The provisions of section 143(1) provide for prima-facie adjustments in relation to arithmetical errors and incorrect claims apparent from any information in the return. The CIT(A) was of the view that the ACIT(CPC) was correct in disallowing the incorrect claim u/s 32(1)(i) apparent from the return. Hence, he rejected the appeal of the Assessee, against which order the present appeal has been filed by the Assessee before the Tribunal.
After hearing the rival submissions I am of the view that it is fit and proper to set aside the order of CIT(A) and remand the issue for fresh consideration by CIT(A). In this regard the learned counsel for the assessee has submitted before us that the assessee could not properly set out before CIT(A) the assessee’s grievances with regard to the order dated 30.05.2012. Keeping in mind the above assurance that the Assessee would set forth its grievance properly, I set aside the order of the CIT(A) and direct the CIT(A) to allow opportunity to the Assessee to set forth his grievances and 4 decide the issue afresh in accordance with law after affording opportunity of being heard to the assessee. The Assessee will address the grievance as set out by the AO in the show cause notice dated 27.1.2012. The CIT(A) will also address the grievance of the Assessee as set out in para-4 of this order. The CIT(A) will afford opportunity of being heard to the parties before deciding the Appeal. In this regard I may also observe that u/s 250(5) of the Act, powers of the CIT(A) are very wide and empower him to go into any ground not specified in the grounds of appeal
. The CIT(A) therefore is requested to consider and adjudicate the grievances that may be raised by the assessee in the set aside proceedings;. For statistical purposes the appeal is treated as allowed.
10. In the result the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the Court on 6.4.2016. Sd/- [ N.V.Vasudevan ] Judicial Member Dated : 6.4.2016. [RG PS] Copy of the order forwarded to: 1.Mediscan, Gr.Floor, Arindam Complex, Barasat Road, Amaraboti, Sodepur, Kolkata-700110. 2. D.C.I.T., Circle-22, Kolkata. 3. CIT(A)-6, Kolkata. 4. CIT-8, Kolkata. 5. CIT(DR), Kolkata Benches, Kolkata.