DCIT, CHENNAI V. Sical Infra Assets Ltd., CHENNAI

ITA 1185/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86367 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 05-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR B NISCHAL
• Assessee Lawyers: A S SRIRAMAN
• Keywords: Earning of tax free income; Revised return
• Section: 143(3); 14A; 139(5)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . , ! # $ , % & BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./I.T.A.NO. 1185/MDS/2014 ( / ASSESSMENT YEAR: 2009-10) ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-VI(3), NEW BLOCK, 7 TH FLOOR,AAYAKAR BHAVAN CHENNAI-34. VS M/S. SICAL INFRA ASSETS LTD., 73, AREMENIAN STREET, CHENNAI-600 001. PAN:AAKCS8356A ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : DR. B.NISCHAL, JCIT /RESPONDENT BY : MR. A.S.SRIRAMAN, ADVOCATE /DATE OF HEARING : 4 TH MARCH, 2015 /DATE OF PRONOUNCEMENT : 20 TH MARCH, 2015 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF COMMISSIONER OF INCOME TAX (APPEALS)-VI, CHENNAI, D ATED 31.01.2014 FOR THE ASSESSMENT YEAR 2009-10. 2. THE REVENUE RAISED THE FOLLOWING GROUNDS IN ITS APPEAL:- 2.1 THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DIRECTING THE ASSESSING OFFICER TO PROCESS THE SECOND REVISED RETURN WHICH IS FILED WITHIN DUE DATE AS PER LAW AND GIVE SET OFF O F BUSINESS LOSS OF ` 1,29,00,875/- INCURRED DURING 2 ITA NO.1185/MDS/2014 THE YEAR WITH THE INCOME FROM OTHER SOURCES OF ` 44,68,843/- 2.2 THE COMMISSIONER OF INCOME TAX (APPEALS) RELIED UPON THE DECISION OF THE ITAT IN ITA NO.967/MDS/2013 DATED 5.8.2013 IN THE CASE OF M/S.AMSTEEL CASTINGS P.LTD. FOR THE ASSESSMENT YEAR 2009-10. 2.3 IT IS SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS)S ORDER RELIED UPON ITATS ORDER IN THE CASE OF M/S.AMSTEEL CASTINGS P.LTD. WHICH HAS NOT BECOME FINAL AS APPEAL IS PREFERRED BY THE DEPARTMENT BEFORE THE HIGH COURT. 3. BRIEF FACTS ARE THAT ASSESSEE FILED RETURN OF IN COME ORIGINALLY ON 29.09.2009 ADMITTING INCOME OF ` 44,68,840/- WHICH WAS LATER REVISED ON 09.10.2009. THE ASSESSEE SUBSEQUENTLY FILED A REVISED RETURN ON 27.09.2010 DECLARING LOSS OF ` 84,32,032/-. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT ON 16.12.2011 DETERMININ G LOSS AT ` 92,06,830/- BY DISALLOWING ` 47,37,990/- UNDER SECTION 14A READ WITH RULE 8D. THE ASSESSING OFFICER WHILE COM PUTING THE LOSS DID NOT CONSIDER THE REVISED RETURN FILED BY THE ASSESSEE ON 27.09.2010 DECLARING LOSS OF ` 84,32,032/- FOR THE REASON THAT SIGNED COPY OF ITR V HAS NOT REACHE D THE CPC BANGALORE CENTRE. ON APPEAL, COMMISSIONER OF IN COME 3 ITA NO.1185/MDS/2014 TAX (APPEALS) DIRECTED THE ASSESSING OFFICER TO PRO CESS THE SECOND REVISED RETURN AS PER LAW AND GIVE SET OFF B USINESS LOSS AGAINST INCOME FROM OTHER SOURCES. WHILE HOLDI NG SO, THE COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT ASSESSING OFFICER HAS NOT GIVEN ANY OPPORTUNITY TO THE ASSESSEE TO RECTIFY THE DEFECT CREPT IN THE FIRST R EVISED RETURN OR SECOND REVISED RETURN AS PROVIDED UNDER SECTION 139(9) OF THE ACT. THE COMMISSIONER OF INCOME TAX (APPEALS) ALSO FOLLOWED THE DECISION OF THE CO-ORDINATE BENCH OF T HIS TRIBUNAL IN THE CASE OF M/S. AMSTEEL CASTINGS P.LTD., VS. JC IT IN ITA NO.967/MDS/2013 DATED 5.8.2013, WHEREIN THE BENCH DIRECTED THE ASSESSEE TO SEND A SIGNED COPY OF VERI FICATION FORM ITR-V TO THE JURISDICTIONAL ASSESSING OFFICER WITHIN A WEEK OF RECEIPT OF THIS ORDER AND ALSO DIRECTED TH E ASSESSING OFFICER TO TREAT THE REVISED RETURN FILED AS VALID RETURN. COUNSEL FOR THE ASSESSEE PLACES RELIANCE ON THE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS) AND THE CO-OR DINATE BENCH DECISION IN THE CASE OF M/S. AMSTEEL CASTING S P.LTD.,(SUPRA). 4 ITA NO.1185/MDS/2014 4. DEPARTMENTAL REPRESENTATIVE PLACES RELIANCE ON T HE ORDER OF THE ASSESSING OFFICER. 5. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES AND THE DECISION RELIED ON BY THE ASSESSEE. THE IS SUE IN APPEAL HAS BEEN ELABORATELY CONSIDERED BY THE COMMISSIONER OF INCOME TAX (APPEALS) IN PARA 6.2 OF HIS ORDER OBSERVING AS UNDER:- 6.2 THE SECOND & THIRD GROUND FIELD BY THE ASSESSING OFFICER ARE AGAINST NON-ACCEPTANCE OF TH E REVISED RETURN FIELD ON 27.09.2010 BY THE APPELLAN T ON THE GROUND THAT THE RETURN OF INCOME IS NOT APPEARI NG IN THE AST REASONS BEING SIGNED COPY OF ITR FILED HAS NOT REACHED THE CPC BANGALORE. HOWEVER, THE ASSESSING OFFICER PROCESSED THE FIRST REVISED RETUR N U/S.143(1) OF THE IT ACT ON 11.01.2011. ON THIS ISSUE, THE AR OF THE APPELLANT VIDE LETTER DATED 28.12.2011 STATED AS UNDER: WE BRING TO YOUR KIND ATTENTION THAT FOR THE ABOVE A. Y. WE HAVE FILED THE REVISED RETURN ON LINE VIDE E-FILING ACKNOWLEDGEMENT NO.161177030270910 DATED 27.9.2010. WE HAVE ALSO SENT THE ORIGINAL SIGNED ACKNOWLEDGEMENT BY ORDINARY POST. WE HAVE NOT KEPT THE COPY OF SIGNED ACKNOWLEDGEMENT BY MISTAKE FOR OUR RECORDS. NOW DURING THE ASSESSMENT PROCEEDINGS U/S 143(3), WHEN WE APPROACHED THE AO, WE 'WERE INFORMED THAT THE ABOVE REFERRED RETURN IS NOT UPLOADED IN HIS NETWORK AND HE IS NOT ABLE TO PROCESS THE 5 ITA NO.1185/MDS/2014 SAID REVISED RETURN. WE ALSO WISH TO STATE THAT THE ASSESSMENT FOR THE ABOVE ASSESSMENT YEAR IS TIME BARRING BY 31.12.2011. HENCE, WE REQUEST YOU TO UPLOAD THE REVISED RETURN FILED ON 27.09.2010 IMMEDIATELY TO PROCESS THE SAME FOR SCRUTINY ASSESSMENT. ' I HAVE PERUSED THE COPIES OF THE FIRST AND SECOND REVISED RETURNS FILED BY THE APPELLANT. THE FIRST REVISED RETURN WAS FILED ON 09.10.2009 SHOWING A GROSS TOTAL INCOME OF RS.44,68,843/-. IN THE SCHEDULE BP OF THIS RETURN, THE NET PROFIT OR LOSS FROM THE BUSINESS OR PROFESSION AT COL.36 WAS SHOWN AT (- )RS.1,17,74,923/-. THIS FIGURE WAS ARRIVED BY THE APPELLANT AFTER DISALLOWING AN EXPENSE OF RS.14,07,440/- IN ITS COL.NO.8 WHICH REFERS TO THE EXPENSES DEBITED IN THE PROFIT & LOSS ACCOUNT WHICH RELATE TO EXEMPT INCOME. HOWEVER, THIS BUSINESS LOSS WAS NOT CARRIED TO THE SCHEDULE CYLA OF THE RETURN WHICH GIVES THE DETAILS OF THE INCOME AFTER SET OFF OF CURRENT YEAR LOSSES. THE SECOND REVISED RETURN WAS FILED BY THE APPELLANT 27.09.2010 SHOWING CURRENT YEAR LOSS OF RS.84,32,032/-. IN SCHEDULE BP OF THIS SECOND REVISED RETURN, THE NET PROFIT OR LOSS FROM THE BUSINESS OR PROFESSION AT COL.NO.3 WAS SHOWN AT (-)RS.1,29,00,875/-. THIS FIGURE WAS ARRIVED BY THE APPELLANT AFTER DISALLOWING AN EXPENSE OF RS.2,81,488/- IN COL.NO .8 WHICH REFERS TO EXPENSES DEBITED IN THE PROFIT & LOSS ACCOUNT WHICH RELATE TO EXEMPT INCOME. THIS BUSINESS LOSS WAS CARRIED TO THE SCHEDULE CYLA OF THE RETURN WHICH GIVES DETAILS OF THE INCOME AFTER SET OFF OF THE CURRENT YEAR LOSSES. BOTH THE REVISED RETURNS WERE FILED BY THE APPELLANT BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME U/S 139(5) OF THE IT ACT. IN THIS CASE, THE DUE DATE OF FILING THE REVISED RETURN OF INCOME U/S 139(5) OF THE IT ACT WAS 31.03.2011. ACCORDING TO THE AR OF THE APPELLANT, THE SECOND REVISED RETURN OF INCOME FILED BY THE APPELLANT WAS TO CORRECT THE MISTAKE CREPT INADVERTENTLY IN THE. FIRST REVISED RETURN. THE AO HAS IGNORED THE SECOND REVISED RETURN ONLY ON THE GROUND THAT THE SAME WAS NOT APPEARING IN AST. IT WAS THE 6 ITA NO.1185/MDS/2014 CONTENTION OF THE AR OF THE APPELLANT THAT IT HAS SENT THE ACKNOWLEDGEMENT OF THE SECOND REVISED RETURN TO THE CPC BANGALORE THROUGH ORDINARY POST WITHIN THE SPECIFIED TIME AND FURTHER STATED THAT NO FAULT CAN BE ATTRIBUTED TO THE APPELLANT. I T WAS FURTHER STATED BY THE .AR OF THE APPELLANT THAT NO DEFECT NOTICE U/S 139(9) OF THE IT ACT WAS SERVED UPON THE ASSESSEE AND NO OPPORTUNITY WAS ALLOWED BY THE DEPARTMENT BEFORE TREATING THE SECOND REVISED RETURN AS INVALID RETURN. IT WAS FURTHER STATED BY THE AR OF THE APPELLANT THAT IT H AS SENT A LETTER DATED 29.12.2011 TO THE ASSISTANT COMMISSIONER OF INCOME TAX, CPC FOR UPLOADING THE REVISED RETURN FILED ON 27.09.2010. I HAVE CONSIDERED THE SUBMISSIONS OF THE AR OF THE ASSESSEE AS WELL AS THE FINDINGS GIVEN IN THE ASSESSMENT ORDER CAREFULLY AND ALSO PERUSED THE VARIOUS JUDICIAL PRONOUNCEMENTS CITED BY THE AR OF THE ASSESSEE. FROM THE FACTS GIVEN ABOVE, IT IS CRYSTAL CLEAR THAT THE APPELLANT HAS FILED THE SECOND REVISED RETURN ONLY TO RECTIFY THE MISTAKE OCCURRED INADVERTENTLY IN THE FIRST REVISED RETURN. THE SECOND REVISED RETURN WAS FILED BY THE APPELLANT TO RECTIFY THE MISTAKE OCCURRED TO THE EXTENT OF NOT CLAIMING FOR SET OFF OF BUSINESS LOSS WITH THE INCOME FROM OTHER SOURCES OF RS.44,68,843/- DECLARED IN THE ORIGINAL RETURN AS WELL AS IN THE FIRST REVISED RETURN. NO OPPORTUNITY WAS GIVEN BY THE AO TO RECTIFY THE DEFECT CREPT IN THE FIRST REVISED RETURN AND ALSO NO OPPORTUNITY WAS GIVEN BY THE AO TO REJECT THE SECOND REVISED RETURN AS PROVIDED U/S 139(9) OF THE IT ACT. SIMILA R & IDENTICAL ISSUE AROSE BEFORE HON'BLE ITAT A BENCH, CHENNAI IN THE CASE OF M/S AMSTEEL CASTINGS PVT. LTD. VS JCIT IN ITA NO.967/MDS/2013 FOR A.Y. 2009-10, WHEREIN HON'BLE ITAT HAS DIRECTED THE ASSESSEE TO SUBMIT A SIGNED COPY OF VERIFICATION FORM ITR-V TO THE JURISDICTIONAL ASSESSING OFFICER WITHIN A WEEK OF RECEIPT OF THE ORDER AND ALSO DIRECTED THE AO TO TREAT THE REVISED RETURN FILED AS VALID RETURN. RESPECTFULLY FOLLOWING THE RATIO OF THE DECISION OF THE HON'BLE ITAT A BENCH IN THE CASE OF M/S AMSTEEL CASTINGS PVT. LTD. VS JCIT (SUPRA), I DIREC T THE PRESENT JURISDICTIONAL ASSESSING OFFICER TO PROCESS THE SECOND REVISED RETURN AS PER THE LAW AND GIVE A SET OFF OF BUSINESS LOSS INCURRED BY THE APPELLANT DURING THE YEAR UNDER CONSIDERATION WITH THE INCOME FROM OTHER SOURCES OF RS.44,68,843/- 7 ITA NO.1185/MDS/2014 DECLARED IN THE SECOND REVISED RETURN. 6. ON GOING THROUGH THE ABOVE ORDER OF THE COMMISSI ONER OF INCOME TAX (APPEALS), WE DO NOT FIND ANY INFIRMI TY IN DIRECTING THE ASSESSING OFFICER TO CONSIDER THE REV ISED RETURN FILED BY THE ASSESSEE ON 27.09.2010 AND LOSS THEREI N TO SET OFF AGAINST INCOME FROM OTHER SOURCES. IT APPEARS T HAT THE ONLY REASON FOR NOT CONSIDERING THE REVISED RETURN IS THAT SIGNED ITR-V FORM HAS NOT BEEN RECEIVED BY CPC BAN GALORE CENTRE. THE ASSESSEE SUBMITS THAT IT HAS E-FILED RE VISED RETURN ON ONLINE VIDE ACKNOWLEDGEMENT NO. 161177030270910 DATED 27.9.2010. THE ASSESSEE ALSO SUBMITTED THAT I T HAS SENT ORIGINAL SIGNED ACKNOWLEDGEMENT COPY BY ORDINA RY POST AS WAS REQUIRED AT THAT POINT OF TIME. THUS, SINCE THE ASSESSEE HAS ALREADY SENT BY ORDINARY POST AS WAS R EQUIRED AT THAT POINT OF TIME, WE CANNOT FIND FAULT WITH TH E ASSESSEE AND REJECT THE REVISED RETURN FOR NON-RECEIPT OF IT R-V BY THE CPC BANGALORE CENTRE. THIS ASPECT OF THE MATTER WAS ALSO CONSIDERED BY THE CO-ORDINATE BENCH OF THIS TRIBUNA L IN THE CASE OF M/S.AMSTEEL CASTINGS P.LTD. VS. JCIT IN ITA NO.967/MDS/2013 DATED 5.8.2013. RESPECTFULLY FOLLO WING THE SAID DECISION, WE UPHOLD THE ORDER OF THE COMMISSIO NER OF 8 ITA NO.1185/MDS/2014 INCOME TAX (APPEALS) AND REJECT THE GROUNDS RAISED BY THE REVENUE. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH MARCH, 2015 AT CHENNAI. SD/- SD/- ( . ) ( ( *+ ) ( A.MOHAN ALANKAMONY ) ( CHALLA NAGENDRA PRASAD ) - / ACCOUNTANT MEMBER * - / JUDICIAL MEMBER * /CHENNAI, / /DATED 20 TH MARCH, 2015 SOMU 12 32 /COPY TO: 1. APPELLANT 2. RESPONDENT 3. 4 () /CIT(A) 4. 4 /CIT 5. 2 7 /DR 6. /GF .