Menco Switchgear P.Ltd, Palakkad V. ITO, Palakkad

ITA 103/COCH/2010

• Counselvise Citation: 10321914 RSA 2010
• Duration Of Justice: 1 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2011
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 01-11-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 09-02-2010
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: VANDANA MENON
• Keywords: Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORESHRI N.R.S. GANESAN, JM I.T.A NO. 103/COCH/2010 ASSESSMENT YEAR:2006-07 MENCO SWITCHGEAR PVT. LTD., A-5, INDUSTRIAL ESTATE, P.O. OLAVAKODE, PALAKKAD. [PAN:AAECM 0811E] VS. THE INCOME TAX OFFICER, WARD-3, PALAKKAD. (ASSESSEE-APPELLANT) (REVENUE-RESPONDENT) ASSESSEE BY SMT. VANDANA MENON, ADV. REVENUE BY MS. S. VIJAYAPRABHA, JR.DR DATE OF HEARING 1/11/2011 DATE OF PRONOUNCEMENT 16/12/2011 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-V, KOCHI DATED 9.11.2009 AND PERTAINS TO THE ASSESSMENT YEAR 2006-07. 2. THE ONLY ISSUE ARISING FOR CONSIDERATION IS THE CARRY FORWARD OF BUSINESS LOSS TO THE EXTENT OF ` 1,73,427/-. . SMT. VANDANA MENON, THE LD. COUNSEL F OR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS FILED THE RETURN OF INCOME MA NUALLY ON 23.10.2006. ACCORDING TO THE LD. COUNSEL FOR THE ASSESSEE FOR THE ASSESSMEN T YEAR 2006-07, THE CBDT INSTRUCTED THE ASSESSEES TO FILE THEIR RETURNS OF INCOME IN EL ECTRONIC FORM AND FILE THE ACKNOWLEDGMENT WITHIN 15 DAYS. ACCORDING TO THE LD . COUNSEL FOR THE ASSESSEE, DUE TO TECHNICAL PROBLEM IN SOFTWARE, THE ASSESSEE COULD N OT FILE THE RETURN ELECTRONICALLY. THEREFORE, THE ASSESSEE FILED THE RETURN MANUALLY BEFORE THE DUE DATE ON 23.10.2006. HOWEVER, IN ORDER TO COMPLY WITH THE CBDT INSTRUCTI ON, THE ASSESSEE HAS ALSO FILED THE I.T.A. NO. 103/COCH/2010 2 RETURN ELECTRONICALLY ON 14.2.2011 AND FILED THE AC KNOWLEDGMENT BEFORE THE ASSESSING AUTHORITY WITHIN 15 DAYS. ACCORDING TO THE LD. COU NSEL, THE ASSESSING OFFICER IGNORED THE RETURN OF INCOME FILED MANUALLY ON 23.10.2006 AND F OLLOWING THE RETURN OF INCOME FILED ELECTRONICALLY ON 14.2.2007, REJECTED THE CLAIM OF THE ASSESSEE FOR CARRY FORWARD OF BUSINESS LOSS. THE LD. COUNSEL SUBMITTED THAT THE ASSESSEE COULD NOT FILE THE RETURN OF INCOME AS DESIRED BY THE CBDT DUE TO TECHNICAL DEFE CT IN UPLOADING THE RETURN. THEREFORE, THE ASSESSEE IS ENTITLED TO CARRY FORWA RD LOSS TO THE EXTENT OF ` 1,73,427/-. 2. ON THE CONTRARY, MS. VIJAYAPRABHA, THE LD. DEPAR TMENTAL REPRESENTATIVE SUBMITTED THAT THE FOR THE ASSESSMENT YEAR UNDER CONSIDERATIO N, THE CBDT INSTRUCTED ALL THE CORPORATE-ASSESSEES TO FILE THE RETURN OF INCOME IN THE ELECTRONIC FORM AND FILE THE ACKNOWLEDGEMENT WITHIN 15 DAYS BEFORE THE ASSESSING OFFICER. HOWEVER, THE ASSESSEE COULD NOT FILE THE RETURN WITHIN THE DUE DATE SPECI FIED U/S. 139(1) OF THE ACT. THE RETURN OF INCOME WAS FILED ELECTRONICALLY ON 14.2.2007. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE RETURN FILED ON 14.2.2007 WAS NO T TREATED AS INVALID. THE ASSESSING OFFICER COMPUTED THE INCOME ON THE BASIS OF THE RET URN FILED ELECTRONICALLY ON 14.2.2007. HOWEVER, THE ASSESSING OFFICER REJECTED THE CLAIM O F THE ASSESSEE FOR CARRY FORWARD OF LOSS SINCE THE RETURN FILED ELECTRONICALLY WAS BEYO ND THE DUE DATE SPECIFIED U/S. 139(1) OF THE ACT. ON A QUERY FROM THE BENCH WHETHER THE INC OME TAX ACT REQUIRES THE ASSESSEE TO FILE THE RETURN OF INCOME ELECTRONICALLY, THE LD . DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE CBDT CIRCULAR ONLY MANDATES ALL THE CORPOR ATE-ASSESSES TO FILE THE RETURN OF INCOME ELECTRONICALLY AND THE INCOME TAX ACT IS SIL ENT ON THE FILING OF THE RETURN OF INCOME ELECTRONICALLY. ON A FURTHER QUERY FROM THE BENCH WHETHER THE CBDT CIRCULAR PROHIBITS THE CORPORATE-ASSESSEES TO FILE THE RETUR N OF INCOME MANUALLY, THE LD. DEPARTMENTAL REPRESENTATIVE CLARIFIED THAT THE CIRC ULAR HAS NOT PROHIBITED THE ASSESSEE TO FILE THE RETURN OF INCOME MANUALLY, AT THE SAME TIM E, IT MANDATES THAT THE RETURN SHALL BE FILED ELECTRONICALLY. THEREFORE, THE RETURN OF INC OME SAID TO BE FILED BY THE ASSESSEE MANUALLY ON 23.10.2006 CANNOT BE CONSIDERED FOR THE PURPOSE OF CARRY FORWARD OF LOSS. I.T.A. NO. 103/COCH/2010 3 3. THE RIVAL CONTENTIONS WERE CONSIDERED IN THE LIG HT OF THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE CLAIMS THAT DUE TO TECHNICAL D EFECT IN UPLOADING THE RETURN, THE ASSESSEE COULD NOT FILE THE RETURN ELECTRONICALLY W ITHIN THE DUE DATE SPECIFIED U/S. 139(1) OF THE ACT AS DESIRED BY THE CBDT INSTRUCTION. HOW EVER, THE RETURN WAS FILED MANUALLY WITHIN THE DUE DATE ON 23.10.2006. SUBSEQUENTLY, T HE ASSESSEE ALSO FILED THE RETURN OF INCOME ELECTRONICALLY ON 14.2.2007. THE QUESTION A RISES FOR CONSIDERATION IS THAT WHEN THE ASSESSEE HAS FILED THE RETURN MANUALLY ON 23.1 0.2006, WHETHER IT IS ENTITLED TO CARRY FORWARD OF LOSS. SECTION 139(1) OF THE INCOME TAX ACT MANDATES EVERY PERSON TO FILE THE RETURN OF INCOME IN THE PRESCRIBED FORM AND VERIFIE D IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED. THEREFORE, EVERY PERSON INCLUDING THE CORPORATE-ASSESSEES IS DUTY BOUND TO FILE THE RETUR N OF INCOME WHEREVER THE INCOME EXCEEDED THE MAXIMUM LIMIT PRESCRIBED IN THE PRESCR IBED MANNER. THE CBDT DIRECTED ALL THE CORPORATE-ASSESSEES TO FILE THE RETURNS OF INCOME ELECTRONICALLY FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. EARLIER ALL THE ASSESSE ES HAD TO FILE THE RETURNS OF INCOME MANUALLY. THE CBDT DIRECTED ALL THE CORPORATE-ASSE SSES TO FILE THE RETURNS OF INCOME ELECTRONICALLY IN EXERCISE OF ITS ADMINISTRATIVE PO WER U/S. 119 OF THE I.T. ACT. HOWEVER, DUE TO A TECHNICAL DEFECT IN UPLOADING THE RETURN E LECTRONICALLY, THE ASSESSEE CLAIMS THAT THE RETURN COULD NOT BE FILED WITHIN THE DUE DATE P RESCRIBED U/S. 139(1) OF THE ACT. THE ASSESSEE ALSO CLAIMS THAT THE RETURN WAS MANUALLY F ILED ON 23.10.2006. ON A QUERY FROM THE BENCH, THE LD. DR VERY FAIRLY CLARIFIED THAT TH ERE IS NO PROHIBITION FOR FILING THE RETURN OF INCOME MANUALLY, HOWEVER, IN VIEW OF THE INSTRUC TION OF THE CBDT, THE ASSESSEE HAS TO FILE THE RETURN OF INCOME ELECTRONICALLY. WHEN THE CBDT DIRECTS ALL THE CORPORATE- ASSESSEES TO FILE THE RETURN OF INCOME ELECTRONICA LLY, IT HAS TO ENSURE THAT THERE IS NO TECHNICAL DEFECT IN FILING THE RETURN ELECTRONICALL Y. SO LONG AS THE TECHNICAL DEFECT CANNOT BE RULED OUT, THIS TRIBUNAL IS OF THE OPINION THAT THE RETURN OF INCOME FILED MANUALLY IN ADDITION TO ELECTRONICALLY, CANNOT BE IGNORED. IN OTHER WORDS, UNLESS THE CBDT ENSURES THAT ALL THE CORPORATE ASSESSES COULD UPLOAD THEIR RETURNS WITHOUT ANY DIFFICULTY BY DEVELOPING CUSTOMER-FRIENDLY SOFTWARE, IT CANNOT CO MPEL THE ASSESSEE OR PROHIBIT THE CORPORATE-ASSESSES TO FILE THE RETURN OF INCOME MAN UALLY. SINCE INDIA BEING A DEVELOPING COUNTRY, NO ONE CAN ENSURE THAT THE SOFTWARE USED B Y THE CBDT WAS DEFECT FREE AND IT I.T.A. NO. 103/COCH/2010 4 COULD BE UPLOADED BY ALL CORPORATE-ASSESSEES. THER EFORE, THIS TRIBUNAL IS OF THE OPINION THAT THE RETURN OF INCOME FILED BY THE ASSESSEE MAN UALLY, HAS ALSO TO BE TAKEN INTO CONSIDERATION. 4. THE ASSESSEE HAS FILED XEROX COPY OF THE RETURN OF INCOME SAID TO BE FILED MANUALLY ON 23.10.2006. HOWEVER, THE GENUINENESS OF THE FIL ING OF RETURN MANUALLY HAS TO BE VERIFIED BY THE ASSESSING OFFICER. THEREFORE, THE ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ISSUE OF CARRY FORWARD OF LOSS TO THE EXTENT OF ` 1,73,427/- IS REMANDED TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING O FFICER SHALL PHYSICALLY VERIFY THE RETURN OF INCOME FILED BY THE ASSESSEE MANUALLY ON 23.10. 2006. IF THE RETURN IS ACTUALLY FILED ON 23.10.2006 MANUALLY AND THE SAID RETURN IS WITHIN THE DUE DATE PRESCRIBED U/S. 139(1) OF THE ACT, THE ASSESSING OFFICER SHALL ALLOW THE CARR Y FORWARD LOSS CLAIMED BY THE ASSESSEE TO THE EXTENT OF ` 1,73,427/-. 5. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. SD/- (N.R.S.GANESAN) JUDICIAL MEMBER PLACE: ERNAKULAM DATED: 16TH DECEMBER, 2011 GJ COPY TO: 1. MENCO SWITCHGEAR PVT. LTD., A-5, INDUSTRIAL ESTA TE, P.O. OLAVAKODE, PALAKKAD. 2. THE INCOME TAX OFFICER, WARD- 3, PALAKKAD. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-V, KOCH I. 4. THE COMMISSIONER OF INCOME-TAX, TRICHUR. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE .