The Asst. Commissioner of Income-Tax, Guntur V. M/s. Kallam Brothers Cottons Pvt.Ltd., Guntur

ITA 107/VIZ/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6708 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 03-03-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M K SETHI
• Keywords: Revised return
• Section: 143(3); 246; 6

Judgement Text

ITA NO.107/VIZAG/2017 & CO NO.49/VIZAG/2017 M/S. KALLAM BROTHERS COTTONS (P) LTD., GUNTUR 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . ' , % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./I.T.A.NO.107/VIZAG/2017 ( / ASSESSMENT YEAR: 2011-12) ACIT, CIRCLE - 1(1), GUNTUR M/S. KALLAM BROTHERS COTTONS (P) LTD., GUNTUR [PAN NO. AACCK1510A ] ( ' / APPELLANT) ( ()' / RESPONDENT) C.O. NO.49/VIZAG/2017 (ARISING OUT OF I.T.A.NO.107/VIZAG/2017) ( / ASSESSMENT YEAR: 2011-12) M/S. KALLAM BROTHERS COTTONS (P) LTD., GUNTUR ACIT, CIRCLE - 1(1), GUNTUR ( ' / APPELLANT) ( ()' / RESPONDENT) / APPELLANT BY : SHRI M.K. SETHI DR / RESPONDENT BY : SHRI G.V.N. HARI, AR / DATE OF HEARING : 07.09.2017 / DATE OF PRONOUNCEMENT : 08.09.2017 ITA NO.107/VIZAG/2017 & CO NO.49/VIZAG/2017 M/S. KALLAM BROTHERS COTTONS (P) LTD., GUNTUR 2 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T ORDER OF THE CIT(A)-1, GUNTUR DATED 30.11.2016 FOR THE ASSESSMEN T YEAR 2011-12 AND THE CROSS OBJECTION FILED BY THE ASSESSEE IS IN SUPPORT OF ORDER OF THE CIT(A)-1, GUNTUR. 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS A PRIVAT E LIMITED COMPANY CARRYING ON BUSINESS OF MANUFACTURING AND SALE OF C OTTON, GINNING, SPINNING AND ALLIED PRODUCTS AND POWER GENERATION, FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-12 ON 23.9.2011 DECLARING TOTAL INCOME OF ` 3,32,45,620/-. THE RETURN FILED BY THE ASSESSEE W AS PROCESSED ON 10.2.2012 AND THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY. SUBSEQUENTLY, THE ASSESSEE HAS FILED A R EVISED RETURN ON 28.3.2013 DECLARING TOTAL INCOME OF ` 2,63,45,860/-. THE A.O. HAS NOT CONSIDERED THE REVISED RETURN FILED BY THE ASSESSEE DATED 28.3.2013 ON THE GROUND THAT THE RETURN FILED BY THE ASSESSEE IN ITIALLY WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT') AND ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT. ITA NO.107/VIZAG/2017 & CO NO.49/VIZAG/2017 M/S. KALLAM BROTHERS COTTONS (P) LTD., GUNTUR 3 3. ON BEING AGGRIEVED, ASSESSEE CARRIED MATTER IN A PPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) DELETED THE ADDITION MA DE BY THE A.O. BY OBSERVING AS UNDER: I HAVE GONE THROUGH THE FACTS OF THE CASE, CONTENT S OF THE ASSESSMENT ORDER, WRITTEN SUBMISSIONS OF THE-ASSESS EE AND THE CASE LAWS REFERRED AND RELIED BY THE ASSESSEE. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE IS A PRIVATE LIMITED CO MPANY CARRYING ON BUSINESS MANUFACTURING AND SALE OF COTTON, GINNING, SPINNING AND ALLIED PRODUCTS AND POWER GENERATED PLANT, FLIED RO T FOR THE A.Y. 2011-12 ON 23.09.20 11 DECLARING TOTAL INCOME OF RS .3,32,45,620/-. THE RETURN WAS PROCESSED ON 10.02.2012 AND THE CASE WAS SELECTED FOR SCRUTINY. SUBSEQUENTLY, THE APPELLANT FILED REV ISED RETURN ON 28.03.2013, DECLARING TOTAL INCOME AT RS.2,63,45,86 0/-. THE SCRUTINY ASSESSMENT WAS COMPLETED U/S.143(3) OF THE T.T. ACT , 1961, BY NOT CONSIDERING THE REVISED RETURN FILED BY THE APPELLA NT AND COMPUTING THE TOTAL INCOME OF THE APPELLANT IS ASSESSED AT RS .3,32,45,620/-. A.O OF THE VIEW THAT AS PER SEC.139(4) ANY PERSON W HO HAS NOT FURNISHED A RETURN WITHIN THE TIME ALLOWED TO HIM UNDER SUB-SEC TION (1), OR WITHIN THE TIME ALLOWED UNDER A NOTICE ISSUED UNDER SUB-SECTIO N(1) OF SECTION 142, MAY FURNISH THE RETURN FOR AN PREVIOUS YEAR AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR O R BEFORE THE COMPLETION OF THE ASSESSMENT, WHICHEVER IS EARLIER AND NOT CON SIDERED TO REVISED RETURN FILED BY THE ASSESSEE. S IT IS FILED WITHIN STIPULA TED TIME. THE ASSESSEE HAS FILED THE ORIGINAL RETURN OF INCOM E OF THE ASSESSMENT YEAR 2011-12 WITHIN THE STIPULATED TIME U/S.139(1). AN I NTIMATION U/S.143(1) DATED 10.02.2012 WAS SERVED ON THE ASSESSEE. CONSEQUENT T O HIGH COURT OF ANDHRA PRADESH THERE IS MERGER OF JANAPADU HYDRO POWER PRO JECT PVT. LTD., WITH THE ASSESSEE COMPANY. THE ASSESSEE HAS FILED A REVISED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-12 ON 28.03.2013, I.E., WITHIN THE STATUTORY TIME LIMIT PRESCRIBED U/S. 139(5). THE ASSESSEE WOULD LIKE TO STATE FOR THE PURPOSE OF COMPLETING THE ASSESSMENT U/S.143(3) OF THE I.T. ACT , AN INTIMATION U/S.143(1) IS NOT AN ASSESSMENT EXCEPT FOR THE PURP OSE OF SECTIONS 246 AND 164 I.E., FOR FILING AN APPEAL OR REVISION PETITION BY THE ASSESSEE AND NOT FOR OTHER PURPOSES. HON'BLE GUJARAT HIGH COURT IN THE CASE OF 'S.R. KOS HTI VS. CIT (2005) 276 1TR 165 IT WAS HELD THAT 'THE AUTHORITIES UNDER THE INCOME-TAX ACT, 1961 ARE UNDER AN OBLIGATION TO ACT IN ACCORDANCE WITH L AW. TAX CAN BE COLLECTED ONLY AS PROVIDED UNDER THE ACT. IF AN ASSESSEE, UNDE R A MISTAKE, MISCONCEPTION OR ON NOT BEING PROPERLY INSTRUCTED, IS OVER-ASSESSED, THE AUTHORITIES UNDER THE ACT ARE REQUIRED TO ASSIST HI M AND ENSURE THAT ONLY ITA NO.107/VIZAG/2017 & CO NO.49/VIZAG/2017 M/S. KALLAM BROTHERS COTTONS (P) LTD., GUNTUR 4 LEGITIMATE TAXES DUE ARE COLLECTED. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS O F THE REVENUE. WHEN AN ASSESSING OFFICER HAS ADOPTED ONE OF THE COURSES PE RMISSIBLE IN LAW, WHICH HAS RESULTED IN LOSS OF REVENUE, OR WHERE TWO VIEWS ARE POSSIBLE AND THE ASSESSING OFFICER HAS TAKEN ONE VIEW, WITH WHICH TH E COMMISSIONER DOES NOT AGREE, THE ORDER CANNOT BE TREATED TO THE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. ONCE AN ASSESSEE IS IN A POSITION TO SHOW THAT HE HAS BEEN OVER-ASSESSED UNDER THE PROVISIONS OF THE ACT, REGARDLESS OF THE WHETHER THE OVER-ASSESSMENT IS AS A RESULT OF THE A SSESSEE'S OWN MISTAKE OR OTHERWISE, THE COMMISSIONER HAS THE POWER TO CORREC T SUCH AN ASSESSMENT UNDER SECTION 264(1) OF THE INCOME-TAX ACT, 1961. IF THE COMMISSIONER REFUSES TO GIVE RELIEF TO THE ASSESSEE, HE WOULD BE ACTING DE HORS THE POWERS UNDER THE ACT. INTIMATION UNDER SECTION 143(1) IS NO T AN ORDER OF ASSESSMENT.' HON'BLE KOLKATA HIGH COURT IN THE CASE OF KALYANPUR CEMENT LTD. VS. JCIT (2005) 195 CTR (CAL) 39, THE ASSESSEE FILED RETURN UNDER SECTION 139(1). THE RETURN WAS PROCESSED U/S.143(1)(A). HOWEVER, NO NOTICE U/S.143(2) WAS ISSUED IN RELATION TO THE ORIGINAL RETURN. THE ASSE SSEE VALIDLY FILED A REVISED RETURN AFTER ISSUANCE OF INTIMATION AND, THEREFORE, THE ASSESSEE WAS ALSO ENTITLED TO FILE ANOTHER REVISED RETURN OF INCOME. IT WAS HELD THAT THE INTIMATION ISSUED BY THE ASSESSING OFFICER U/S.143( 1)(A) CANNOT BE CONSIDERATE AS COMPLETION OF ASSESSMENT AND THEREFO RE REVISED RETURN WAS HELD VALID BECAUSE SECOND REVISED RETURN WAS ALSO F ILED WITHIN PRESCRIBED TIME AND BEFORE COMPLETION OF ASSESSMENT. TAKING INTO CONSIDERATION THE TOTALITY OF THE FACTS AND CIRCUMSTANCES AND THE COURT JUDGEMENTS THE PROCESSING OF THE RETURNS U/S. 143(1)(A) CANNOT BE CONSIDERED AS COMPLETION OF ASSESSMENT, THE ASSESSE E HAS ENTITLED TO FILE THE REVISED RETURN WITHIN THE PRESCRIBED TIME AND BEFOR E COMPLETION OF THE ASSESSMENT. IN THIS CASE THE ASSESSEE HAS FILED REV ISED RETURN WITHIN THE STIPULATED TIME AND BEFORE COMPLETION OF THE ASSESS MENT. HENCE, THE ADDITION MADE BY THE A.O IS DELETED AND THE ASSESSE E'S GROUND OF APPEAL IS ALLOWED. AS A RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. 4. ON BEING AGGRIEVED, REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. THE LD. D.R. HAS SUPPORTED THE ORDER PASSED BY THE A.O. 5. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE HAS SUPPORTED THE ORDER PASSED BY THE LD. CIT(A). ITA NO.107/VIZAG/2017 & CO NO.49/VIZAG/2017 M/S. KALLAM BROTHERS COTTONS (P) LTD., GUNTUR 5 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE ASSESSEE HAS FILED ORIGINAL RETURN OF INCOME ON 23. 9.2011 BY DECLARING TOTAL INCOME OF ` 3,32,45,620/-. THE RETURN FILED BY THE ASSESSEE W AS PROCESSED U/S 143(1) OF THE ACT ON 10.2.2012. THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY AND ALSO A NOTICE U/S 143(2) OF THE ACT WAS ISSUED ON 27.9.2012. SUBSEQUENTLY, THE ASSESSEE HAS FILED A REVISED RETURN ON 28.3.2013 BY DECLARING TOTAL INCOME OF ` 2,63,45,860/-. IN THE ASSESSMENT ORDER, THE A.O. HAS OBSERVED THAT THE RE VISED RETURN FILED BY THE ASSESSEE ON 28.3.2013 IS NOT CONSIDERED IN VIEW OF THE FACT THAT AS PER SECTION 139(4) OF THE ACT, THE ASSESSEE HAS FUR NISHED THE REVISED RETURN AT ANY POINT OF TIME BEFORE EXPIRY OF ONE YE AR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE COMPLETION OF TH E ASSESSMENT, WHICHEVER IS EARLIER. IN THIS CASE, PROCESSING U/S 143(1) OF THE ACT WAS COMPLETED ON 10.2.2012, THEREFORE, THE REVISED RETU RN FILED BY THE ASSESSEE IS INVALID AND NOT CONSIDERED. WE FIND TH AT THE ASSESSING OFFICER IS OF THE VIEW THAT ONCE THE RETURN FILED B Y THE ASSESSEE IS PROCESSED U/S 143(1) OF THE ACT, THEREFORE, THE ASS ESSMENT IS COMPLETED AND THE REVISED RETURN FILED BY THE ASSESSEE IS REJ ECTED. HOWEVER, THE A.O. HAS COMPLETED THE ASSESSMENT IN THE ASSESSEES CASE U/S 143(3) OF THE ACT DATED 13.3.2014, THEREFORE, THE RETURN FILE D BY THE ASSESSEE AND ITA NO.107/VIZAG/2017 & CO NO.49/VIZAG/2017 M/S. KALLAM BROTHERS COTTONS (P) LTD., GUNTUR 6 PROCESSED U/S 143(1) OF THE ACT IS NOT AMOUNTING TO ASSESSMENT, IT IS A MERE PROCESS. IN VIEW OF THE ABOVE, THE A.O. IS NO T CORRECT IN REJECTING THE REVISED RETURN FILED BY THE ASSESSEE. WE ALSO F IND THAT THE LD. CIT(A) DELETED THE ADDITION MADE BY THE A.O. WITHOU T CONSIDERING THAT THE A.O. FAILED TO CONSIDER THE REVISED RETURN AND ADDITION MADE BY THE A.O. IS ON THE BASIS OF ORIGINAL RETURN. UNDER THE SE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION TH AT THE ORDER PASSED BY THE LD. CIT(A) HAS TO BE SET ASIDE AND WE DIRECT THE A.O. TO CONSIDER THE REVISED RETURN FILED BY THE ASSESSEE DATED 28.3 .2013 AND PASS THE ASSESSMENT ORDER DE-NOVO IN ACCORDANCE WITH LAW. T HIS APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 7. THE CROSS OBJECTION FILED BY THE ASSESSEE IS ONL Y SUPPORTIVE TO THE ORDER PASSED BY THE LD. CIT(A) AND IN VIEW OF THE D ECISION IN PRECEDING PARAGRAPHS THE CROSS OBJECTION FILED BY THE ASSESSE E IS DISMISSED. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT O N 8 TH SEPT17. SD/- SD/- ( . . ' ) ( . ) (D.S. SUNDER SINGH) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER ITA NO.107/VIZAG/2017 & CO NO.49/VIZAG/2017 M/S. KALLAM BROTHERS COTTONS (P) LTD., GUNTUR 7 # /VISAKHAPATNAM: ' /DATED : 08.09.2017 VG/SPS )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT THE ACIT, CIRCLE-1(1), GUNTUR 2. / THE RESPONDENT M/S. KALLAM BROTHERS COTTONS (P ) LTD., D.NO.117, ANKIREDDYPALEM, NALLAPADU ROAD, GUNTUR 3. + / THE CIT, VIJAYAWADA 4. + / THE PRINCIPAL CIT, GUNTUR 5. + ( ) / THE CIT (A)-1, GUNTUR 6. # . , . , # / DR, ITAT, VISAKHAPATNAM 7 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM