DCIT, Hyderabad V. M/s North East Broking Services Ltd, Hyderabad

ITA 1204/HYD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59331 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-02-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 10-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PHANI KISHORE
• Keywords: Revised return
• Section: 234B; 6; 90; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE CHANDRA POOJARI, ACCOUNTANT MEMBER & SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 1204/HYD/10 ASSESSMENT YEAR 2007-08 DCIT, CIRCLE 15(1), HYDERABAD VS M/S NORTH EAST BRO KING SERVICES LTD., HYDERABAD (PAN AABCN0344C) APPELLANT RESPONDENT APPELLANT BY : SHRI PHANI KISHORE RESPONDENT BY : SHRI PAVAN KUMAR DATE OF HEARING : 1.3.2012 DATE OF PRONOUNCEMENT : 9.1.2012 ORDER PER ASHA VIJAYARAGHAVAN, JM . THIS APPEAL PREFERRED BY THE REVENUE IS DI RECTED AGAINST THE ORDER PASSED BY THE CIT(A) V, HYDERABAD DATED 22.6.2010 AND PERTAINS TO THE ASSESSMENT YEAR 2007-08. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF ACTIVITY OF SHARE BROKIN G SERVICES AND IT IS A MEMBER OF NSE/BSE. 3. THE COMPANY HAS FILED ITS RETURN OF INCOME THR OUGH E- FILING FOR THE ASSESSMENT YEAR 2007-08 RELEVANT TO THE PREVIOUS YEAR 2006-07 ON 31.10.2007 VIDE ACK. NO.72657703110 07, WHICH IS SUBMITTED IN THE DEPARTMENT ON 15.11.2007 VIDE.ACK.NO.1600002157 ERRONEOUSLY AS TAXABLE INCOM E OF RS.2,31,33,291/- INSTEAD OF RS.2,21,42,090/- . WE FURTHER FILED ITA NO.1204/H/2010 NORTH EAST BROKING SERVICES LTD. HYD. 2 REVISED RETURN OF INCOME ON 25.5.2009 VIDE ACK. NO.68903950250509, WHICH IS SUBMITTED IN THE DEPART MENT ON 28.5.2009 VIDE ACK.NO.16000186, MENTIONING THE MIST AKES HAPPEN IN E-FILING OF THE ORIGINAL RETURN OF INCOME . THE ASSESSING OFFICER PROCESSED THE ORIGINAL RETURN OF INCOME, WHICH IS FILED ON 31.10.2007 WITH A DEMAND OF RS.12,61,28 0/- INCLUDING 234B & C INTEREST. THE ASSESSEE MADE AN APPLICATION WITH DETAILED EXPLANATIONS OF MISTAKES HAPPENED IN THE E-FILING OF RETURN ON 31.10.2007. THE SAME WAS REJECTED BY THE ASSESSING OFFICER VIDE HIS LETTER DATED 21.05.2009. 4. THE ASSESSING OFFICER REJECTED THE APPLICATION U/S 154 OF THE IT ACT BY HOLDING AS FOLLOWS: YOU HAVE CLAIMED ADJUSTMENTS TO THE TOTAL INCOME S TANDING THAT THERE ARE TYPOGRAPHICAL ERRORS REQUIRED TO BE CORRECTED. THE CORRECTIONS REQUESTED ARE OF THE NATURE OF ADJU STMENT TO THE INCOME BY CLAIMING EXPENDITURE WHICH HAS NOT BE EN INCORPORATED IN THE RETURN OF INCOME. SINCE THE RE TURN OF INCOME IS E-FILED, WHATEVER CLAIMS ARE THERE, SHOUL D HAVE BEEN MADE IN THE RETURN OF ITSELF. THERE IS NO POS SIBLE TO INCORPORATE ANY NEW DEDUCTIONS INTO THE E-FILED RET URN. THE MATTER OF VARYING THE INCOME ON THE BASIS OF NEW CL AIM FOR DEDUCTION ETC. IS NOT A MATTER WHICH IS APPARENT FR OM THE RETURN OF INCOME FILED. HENCE, THE 154 APPLICATION CANNOT BE ACTED UPON AND IS HEREBY REJECTED. 5. AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE P REFERRED APPEAL BEFORE THE CIT(A). 6. THE CIT(A) HELD THAT THERE IS A TYPOGRAPHICAL E RROR IN UPLOADING INFORMATION DURING THE PROCESS OF FILING E-RETURN. THE ITA NO.1204/H/2010 NORTH EAST BROKING SERVICES LTD. HYD. 3 REVISED RETURNS ALONG WITH THE CERTIFIED AUDIT ACCO UNT CLEARLY BRINGS OUT THE MISTAKE AND SINCE THE MISTAKE IS APP ARENT FROM RECORD, THE CONTENTION OF THE ASSESSEE IS TO BE ACC EPTED. THE CIT(A) DIRECTED THE AO TO RECTIFY ACCORDINGLY. 7. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US AN D RAISED THE FOLLOWING GROUND: WHETHER THE CIT(A) IS RIGHT IN HOLDING THAT THERE WAS A TYPOGRAPHICAL ERROR AND MISTAKE IN UPLOADING INFORM ATION DURING THE PROCESS OF FILLING E-RETURN AND THE MIST AKE APPARENT FROM RECORD. 8. THE DR RELIED ON THE ORDER OF THE AO. THE COUN SEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE CIT(A). 9. WE HEARD BOTH THE PARTIES AND PERUSED THE MATER IALS AVAILABLE ON RECORD. THE SHORT POINT UNDER APPEAL IS ONLY WHETHER THE ERRONEOUS DECLARATION MADE BY THE ASSES SEE WHILE FILING ITS RETURN OF INCOME ONLINE FOR WHICH IT HAS RECEIVED 143(1) INTIMATION CAN BE RECTIFIED BY A PETITION U/S 154. SECTION 143(1) FOR THE YEAR UNDER APPEAL READS AS F OLLOW S: 143 . (1) WHERE A RETURN HAS BEEN MADE UNDER SECTION 139, OR IN RESPONSE TO A NOTICE UNDER SUB-SECTION (1) OF SE CTION 142, SUCH RETURN SHALL BE PROCESSED IN THE FOLLOWING MAN NER, NAMELY: (A) THE TOTAL INCOME OR LOSS SHALL BE COMPUTED AFT ER MAKING THE FOLLOWING ADJUSTMENTS, NAMELY: (I) ANY ARITHMETICAL ERROR IN THE RETURN; OR ITA NO.1204/H/2010 NORTH EAST BROKING SERVICES LTD. HYD. 4 (II) AN INCORRECT CLAIM, IF SUCH INCORRECT CLAIM I S APPARENT FROM ANY INFORMATION IN THE RETURN; (B) THE TAX AND INTEREST, IF ANY, SHALL BE COMPUTE D ON THE BASIS OF THE TOTAL INCOME COMPUTED UNDER CLAUSE (A) ; (C) THE SUM PAYABLE BY, OR THE AMOUNT OF REFUND DU E TO, THE ASSESSEE SHALL BE DETERMINED AFTER ADJUSTMENT OF TH E TAX AND INTEREST, IF ANY, COMPUTED UNDER CLAUSE (B) BY ANY TAX DEDUCTED AT SOURCE, ANY TAX COLLECTED AT SOURCE, AN Y ADVANCE TAX PAID, ANY RELIEF ALLOWABLE UNDER AN AGREEMENT UNDER SECTION 90 OR SECTION 90A, OR ANY R ELIEF ALLOWABLE UNDER SECTION 91, ANY REBATE ALLOWABLE UN DER PART A OF CHAPTER VIII, ANY TAX PAID ON SELF-ASSESS MENT AND ANY AMOUNT PAID OTHERWISE BY WAY OF TAX OR INTE REST; (D) AN INTIMATION SHALL BE PREPARED OR GENERATED A ND SENT TO THE ASSESSEE SPECIFYING THE SUM DETERMINED TO BE PAYABLE BY, OR THE AMOUNT OF REFUND DUE TO, THE ASS ESSEE UNDER CLAUSE (C); AND (E) THE AMOUNT OF REFUND DUE TO THE ASSESSEE IN PU RSUANCE OF THE DETERMINATION UNDER CLAUSE (C) SHALL BE GRANTED TO THE ASSESSEE: PROVIDED THAT AN INTIMATION SHALL ALSO BE SENT TO THE ASSESSEE IN A CASE WHERE THE LOSS DECLARED IN THE R ETURN BY THE ASSESSEE IS ADJUSTED BUT NO TAX OR INTEREST IS PAYABLE BY, OR NO REFUND IS DUE TO, HIM: PROVIDED FURTHER THAT NO INTIMATION UNDER THIS SUB-SECTION SHALL BE SENT AFTER THE EXPIRY OF ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH THE RETURN IS MADE. EXPLANATION.FOR THE PURPOSES OF THIS SUB-SECTION, (A) AN INCORRECT CLAIM APPARENT FROM ANY INFORMA TION IN THE RETURN SHALL MEAN A CLAIM, ON THE BASIS OF AN ENTRY, IN THE RETURN, ITA NO.1204/H/2010 NORTH EAST BROKING SERVICES LTD. HYD. 5 (I) OF AN ITEM, WHICH IS INCONSISTENT WITH ANOTHER ENTRY OF THE SAME OR SOME OTHER ITEM IN SUCH RETURN; (II) IN RESPECT OF WHICH THE INFORMATION REQUIRED TO BE FURNISHED UNDER THIS ACT TO SUBSTANTIATE SUCH ENTRY HAS NOT BEEN SO FURNISHED; OR (III) IN RESPECT OF A DEDUCTION, WHERE SUCH DEDUCT ION EXCEEDS SPECIFIED STATUTORY LIMIT WHICH MAY HAVE BE EN EXPRESSED AS MONETARY AMOUNT OR PERCENTAGE OR RATIO OR FRACTION; (B) THE ACKNOWLEDGEMENT OF THE RETURN SHALL BE DE EMED TO BE THE INTIMATION IN A CASE WHERE NO SUM IS PAYA BLE BY, OR REFUNDABLE TO, THE ASSESSEE UNDER CLAUSE (C) , AND WHERE NO ADJUSTMENT HAS BEEN MADE UNDER CLAUSE (A). 10. WE OBSERVE THAT SECTION 143(1)(A) ALLOWS PRIMA FACIE ADJUSTMENTS IN THE NATURE OF ARITHMETICAL ERRORS IN THE RETURN (143(1)(A)(I); CLEARLY IN THE ASSESSEES CASE ENTER ING TAXABLE INCOME ERRONEOUSLY AT RS.2,31,33,291/- INSTEAD OF RS.2,21,42,090/- RESULTED IN AN ARITHMETIC ERROR IN AS MUCH AS THE INCOME OF THE ASSESSEE WAS CAUSED TO BE WRONGLY COMPUTED AND HENCE SUCH AN ERROR CAN INDEED BE RECTIFIED. 11. FURTHERMORE, IN THE JURISDICTIONAL TRIBUNAL DE CISION OF M/S SATYAM ASSOCIATES TRUST VS. ACIT (ITA NO.507/HYD/2 007), THE HONBLE ITAT ALLOWED THE RECTIFICATION PETITION FILED BY ASSESSEE TO ALLOW STATUTORY EXEMPTION UNDER SECTION 10(34) OF THE ACT RELATING TO DIVIDEND INCOME NOT CLAIMED IN ITS RETURN OF INCOME. WE FIND THE SAME PRINCIPLE HAS BEEN UPHELD IN THE HONBLE ITAT ORDER OF M/S SATYAM ASSOCIATES TRUST (SUPRA) SQUARELY APPLIES TO THE ASSESSEES CASE. ITA NO.1204/H/2010 NORTH EAST BROKING SERVICES LTD. HYD. 6 12. THE SECTION ITSELF PERMITS ADJUSTMENTS FOR AN Y ARITHMETICAL ERROR AND INCORRECT CLAIM. IT WOULD EQ UALLY APPLY FOR ANY PATENT MISTAKES WHICH CAN BE FOUND FROM THE RET URN. WE FEEL THE MISTAKE IS AN TYPOGRAPHICAL ERROR AND MISTAKE I N UPLOADING INFORMATION DURING THE PROCESS OF FILING E-RETURN . THIS MISTAKE IS APPARENT AND DOES NOT REQUIRE DETAILED INVESTIGATIO N OR APPLICATION OF ANY LEGAL PROVISIONS. NO DOUBT, CORR ECTIONS WHICH ARE DEBATABLE IN NATURE CANNOT BE CARRIED OUT IN AN INTIMATION U/S 143(1)(A). THAT DOES NOT PRECLUDE OR BAR THE DE PARTMENT FROM CORRECTING GLARING MISTAKES WHICH IS APPARENT FROM THE RETURN OF INCOME. IT IS THEREFORE RECTIFIABLE U/S 1 54. WE THEREFORE UPHOLD THE CLAIM OF THE ASSESSEE FOR RECTIFICATION AND DIRECT THE AO ADOPT THE INCOME FROM BUSINESS OR PROFESSION AS `NIL. HENCE, REVENUE APPEAL IS DISMISSED. + 13. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE COURT ON: 9.3.2012 SD/- SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER DATED THE 9 TH MARCH, 2012 COPY FORWARDED TO: 1. THE DCIT, CIRCLE 16(1), HYDERABAD 2. M/S NORTH EAST BROKING SERVICES LTD., 5-9-22, 3 RD FLOOR, 301, MY HOME SAROVAR PLAZA, SECRETARIAT ROAD, SAIFA BAD, HYDERABAD. 3. THE CIT(A)-V, HYDERABAD 4. THE CIT, HYDERABAD 5. THE DR, ITAT, HYDERABAD NP/