Sri Lalitha Kuchibhotla, Hyderabad, Hyderabad V. ITO, international Taxantion-1, Hyd, Hyderabad

ITA 1416/HYD/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2517 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 21-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Assessee Lawyers: K RADHAKRISHNA
• Keywords: Opportunity of being heard; Principle of natural justice; Condonation of delay; Revised return
• Section: 154; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A (SMC), HYDERABAD BEFORE SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER I.T.A. NO. 1416/HYD/2016 ASSESSMENT YEAR: 2011-12 SRI LALITHA KUCHIBHOTLA, HYDERABAD. PAN BOEPK 9311 P VS INCOME-TAX OFFICER, INTERNATIONAL TAXATION 1, HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI K. RADHAKRISHNA FOR REVENUE : SMT. SUMAN MALIK DATE OF HEARING : 03-05-2017 DATE OF PRONOUNCEMENT : 12-05-2017 O R D E R THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-10, HYDERABAD, DATED 28-06-2016 FOR THE A.Y. 2011-12. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSEE IS A NON- RESIDENT INDIVIDUAL DERIVING INTEREST INCOME AND PR OPERTY INCOME FILED RETURN OF INCOME FOR THE ASSESSMENT YE AR 2011- 12 ON 20.11.2011 ADMITTING TOTAL INCOME AT RS. 4,55 ,920/-. THE RETURN OF INCOME WAS PROCESSED U/S. 143(1). THE ASSESSEE'S CASE WAS SELECTED FOR SCRUTINY THROUGH C ASS IN RESPONSE TO NOTICES ISSUED U/S. 143(2), THE ASSESSE E'S AUTHORISED REPRESENTATIVE SRI K. RADHAKRISHNA CA AP PEARED FROM TIME TO TIME AND FURNISHED THE INFORMATION CAL LED FOR. THE INFORMATION SO CALLED FOR AND SUBMITTED BY THE ASSESSEE I.T.A. NO. 1416/HYD/2016 LALITHA KUCHIBHOTLA :- 2 -: HAS BEEN VERIFIED. AFTER EXAMINING THE CASE AND AFT ER DISCUSSION WITH THE ASSESSEE'S AUTHORISED REPRESENT ATIVE, THE ASSESSMENT WAS COMPLETED BY THE ASSESSEE BY OBS ERVING AS UNDER: 2. THE ASSESSEE FILED REVISED RETURN OF INCOME ON 17/10/2012 AND ADMITTED THE TOTAL INCOME AT RS. 8,77,844/-. IN THE COMPUTATION OF INCOME ANNEXED TO THE COPY OF REVISED RETURN OF INCOME IT IS NOTICED THAT THE ASSESSEE HAS ALSO SHOWN INCOME FROM HOUSE PROPERTY AT RS. 10,500/- AND INTEREST INCOME AS PER TDS CERTIFI CATES AT RS. 8,67,344/- AS AGAINST RS. 8,73,343/- AND THE RE IS DIFFERENCE IN RECEIPTS BY RS. 5,999/-. ACCORDINGLY, THE AO ASSESSED THE INCOME OF THE ASS ESSEE AT RS. 8,83,843/-, ON WHICH NET TAX PAYABLE BY THE ASS ESSEE WAS AT RS. 1,72,815/-. 2.1 FURTHER, THE AO VIDE LETTER DATED 23/06/2014 TO THE ASSESSEE INTIMATED THAT THE PETITION FOR RECTIFICAT ION IS REJECTED AS THE REVISED RETURN IS TO BE TREATED AS INVALID RETURN AS THE ORIGINAL RETURN OF INCOME FOR THE AY 2011-12 UNDER CONSIDERATION, WAS FILED BELATEDLY AND CONSEQ UENTLY THE TDS CLAIMED IN THE REVISED RETURNS COULD NOT BE GIVEN CREDIT WHILE COMPLETING THE SCRUTINY ASSESSMENTS AN D, THEREFORE, REQUESTED TO PAY THE OUTSTANDING DEMAND IMMEDIATELY. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) AND CONTENDED BEFORE THE CIT(A) AS UNDER: 1. THE DUE DATE FOR FILING THE RETURN OF INCOME FO R ASSESSMENT YEAR 2011-12 WAS 31.07.2011, BUT IT WAS E- I.T.A. NO. 1416/HYD/2016 LALITHA KUCHIBHOTLA :- 3 -: FILED ON 20.11.2011 AND THE REVISED RETURN WAS FILE D ON 16.10.2012. AS PER PROVISIONS OF SECTION 139(4) OF THE I.T.ACT, IF THE RETURN OF INCOME FOR ANY ASSESSMENT YEAR IS NOT FILED WITHIN ONE YEAR FROM THE END OF THE RELEV ANT ASSESSMENT YEAR, IT WILL BE TREATED AS BELATED AND EVEN THE REVISED RETURN IS ALSO ALLOWED TO BE FILED WITH IN ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR O R COMPLETION OF ASSESSMENT, WHICHEVER IS EARLIER, TO BE TREATED AS NON-BELATED. IN OUR CASE THE ORIGINAL AS WELL AS THE REVISED RETURN WAS FILED WITH IN THE ALLOWED TIME AS SUCH THE SAID RETURN CANNOT BE TREATED AS BELATE D. INTEREST UNDER SECTION 234A CAN ONLY BE CHARGED FOR LATE FILING I.E. AFTER DUE DATE. 2. THE A.O. HAD NOT MENTIONED EITHER DURING THE SCR UTINY ASSESSMENT PROCEEDINGS OR IN THE ASSESSMENT ORDER T HAT THE ORIGINAL OR REVISED RETURN OF INCOME WAS BELATE D. WHEN THE ORIGINAL RETURN HAS BECOME BELATED AS PER A.O., THEN THE REVISED RETURN SHOULD ALSO BECOME BELATED. IN SUCH CASE, THE ENTIRE ASSESSMENT PROCEEDINGS FOR SU CH A LONG TIME WERE IN FRUCTUOUS AND WASTE. 3. WHEN THE A.O. HAD BASED HIS ENTIRE ASSESSMENT PROCEEDINGS ON THE RECEIPTS AND TDS AMOUNTS OF 26AS STATEMENT AND MADE ADDITION TO THE RETURNED INCOME, HE SHOULD HAVE OBVIOUSLY GIVEN CREDIT FOR THE PREPAID TAXES OF RS. 262,090/-. GIVING A NEW AND DIFFERENT GROUND OF BELATED RETURN FOR REJECTING OUR APPLICATION UNDER SEC.154, WITHOUT REFERRING/MENTIONING SAME WORD IN THE ASSESSMENT ORDER ITSELF, IS QUITE ILLOGICAL, UNFAIR AND UNJUST. IT IS QUITE SURPRISING, AS TO HOW THE AO HA S PROCESSED THE ORIGINAL RETURN UNDER SEC.143(L), IF IT WAS BELATED AND RAISED ADDITIONAL DEMAND OF TAX. IF PROCESSING OF RETURNS UNDER SEC. 143(1) IS ONLY FOR RAISING ADDITIONAL DEMANDS BUT NOT FOR ISSUING REFU NDS. IT IS AGAINST NATURAL JUSTICE AND FAIRNESS AND THE SPI RIT OF LAW. 3.1 THE ASSESSEE FURTHER CONTENDED AS UNDER: A. THE ASST. ORDER WAS RECEIVED ON 31.3.2014 AND THE APPLICATION UNDER SECTION 154 WAS MOVED ON 4. 4. 20 14 I.T.A. NO. 1416/HYD/2016 LALITHA KUCHIBHOTLA :- 4 -: FOR RECTIFICATION OF THE ASSESSMENT ORDER FOR THE O MISSION OF CREDIT FOR THE PREPAID TAXES OF RS.2,62,090/-ETC .. B. THE APPLICATION FOR RECTIFICATION WAS REJECTED O N 23.6.2014 VIDE HIS ORDER NO.ITO(IT)-I/SCRUTINY/2014 - 15/BQVPK6483K, RECEIVED ON 26.6.2014. C. THE APPEAL U/SEC.246A WAS FILED ON 22.6.2014, WE LL WITHIN THE TIME LIMIT OF 30 DAYS OF 154 ORDER AND A S SUCH THERE WAS NO DELAY IN FILING THE SAID APPEAL. D. DATES OF RECEIPT OF BOTH ASSESSMENT ORDER AND REJECTION ORDER (AGAINST THE ASSESSEE'S APPLICATION ) UNDER SECTION 154 ARE MENTIONED UNDER PARA 7 OF FORM NO.3 5. COPY OF ASSESSEE'S APPLICATION U/SEC.154 AND REJECT ION ORDER ENCLOSED NOW AGAIN. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE IN LIMI NE BY OBSERVING AS UNDER: 7. THE SUBMISSIONS OF THE ASSESSEE HAVE BEEN CONSIDERED. IN THE COLUMN 5 IN FORM 35, AGAINST 'SE CTION AND SUB SECTION OF THE I.T. ACT, 1961, UNDER WHICH THE ASSESSING OFFICER/VALUATION OFFICER PASSED THE ORDE R APPEALED AGAINST AND THE DATE OF SUCH ORDER', 143(3 ) IS MENTIONED. IF THE INTENTION IS TO FILE APPEAL AGAIN ST ORDER U/S.154 THEN 'U/S.154' OUGHT TO HAVE BEEN MENTIONED IN COLUMN NO.5. IN COLUMN NO. 7 BOTH THE ORDERS WERE MENTIONED. IF THE ASSESSEE WANTED TO FILED APPEAL AGAINST 154, HE OUGHT TO HAVE FILED SEPARATE APPEAL AGAINST THAT ORDER. THOUGH OPPORTUNITY WAS GIVEN TO CLARIFY THE ISSUE OR FILE PETITION U/S.249, THE APP ELLANT DID NOT AVAIL THE OPPORTUNITY BY FILING AFFIDAVIT/P ETITION FOR CONDONATION OF DELAY IN FILING OF APPEAL. THOUG H THE AR OF THE APPELLANT MENTIONED A SENTENCE ABOUT CONDONATION OF DELAY HE DID NOT CLARIFY AS TO WHETH ER THE APPEAL IS FILED AGAINST ORDER U/S.143(3) OR NOT AND HE IS 'LOT COMPETENT TO REQUEST FOR CONDONATION OF DELAY AS ONLY THE APPELLANT HAS TO FILE THE AFFIDAVIT/PETITION. I.T.A. NO. 1416/HYD/2016 LALITHA KUCHIBHOTLA :- 5 -: 7.1 IN THE ABSENCE OF PETITION U/S. 249(3), IT IS N OT POSSIBLE TO ASCERTAIN WHETHER THERE IS SUFFICIENT C AUSE IN NOT FILING THE APPEAL WITHIN THE PERIOD OF 30 DAYS. SINCE, THERE IS NO PROPER COMPLIANCE FROM THE ASSESSEE EIT HER FOR NOTICES OR TO THE LETTER TO FILE CONDONATION P ETITION, IT IS HEREBY HELD THAT THE APPEAL IS NOT MAINTAINABLE AS PER SECTION 249 OF THE IT ACT, 1961 AND THE APPEAL IS DISMISSED IN LIMINE. 5. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE I S IN APPEAL BEFORE THE TRIBUNAL RAISING THE FOLLOWING GR OUNDS OF APPEAL: 1.0 THE DUE DATE FOR FILING THE RETURN OF INCOME FO R ASSESSMENT YEAR 2011-12 WAS 31.07.2011, BUT IT WAS E- FILED ON20.11.2011 AND THE REVISED RETURN WAS FILED ON 16.10.2012. AS PER PROVISIONS OF SECTION 139(4) OF THE I.T. ACT, IF THE RETURN OF INCOME FOR ANY ASSESSMENT YEA R IS NOT FILED WITH IN ONE YEAR FROM THE END OF THE RELE VANT ASSESSMENT YEAR, IT WILL BE TREATED AS BELATED AND EVEN THE REVISED RETURN IS ALSO ALLOWED TO BE FILED WITH IN ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR O R COMPLETION OF ASSESSMENT, WHICHEVER IS EARLIER, TO BE TREATED AS NON-BELATED. IN OUR CASE, THE ORIGINAL A S WELL AS THE REVISED RETURN WAS FILED WITHIN THE ALLOWED TIME, AS SUCH THE SAID RETURN CANNOT BE TREATED AS BELATE D. INTEREST UNDER SECTION 234A CAN ONLY BE CHARGED FOR LATE FILING I.E. AFTER DUE DATE. 2.0 THE A.O. HAD NOT POINTED OUT / MENTIONED EITHER DURING THE SCRUTINY ASSESSMENT PROCEEDINGS OR IN TH E ASSESSMENT ORDER THAT THE ORIGINAL OR REVISED RETUR N OF INCOME WAS BELATED. WHEN THE ORIGINAL RETURN HAS BECOME BELATED AS PER A.O., THEN THE REVISED RETURN SHOULD ALSO BECOME BELATED. IN SUCH CASE, THE ENTIR E ASSESSMENT PROCEEDINGS FOR SUCH A LONG TIME WAS INFRUCTUOUS AND WASTE. 3.0 WHEN THE A.O. HAD BASED HIS ENTIRE ASSESSMENT PROCEEDINGS ON THE RECEIPTS AND TDS AMOUNTS OF 26AS STATEMENT AND MADE ADDITION TO THE RETURNED INCOME, HE SHOULD HAVE OBVIOUSLY GIVEN CREDIT FOR THE PREPAID TAXES I.T.A. NO. 1416/HYD/2016 LALITHA KUCHIBHOTLA :- 6 -: OF RS. 2,30,486/-. GIVING A NEW AND DIFFERENT GROUN D OF BELATED RETURN FOR REJECTING OUR APPLICATION UNDER SEC.154, WITHOUT REFERRING! MENTIONING SAME WORD IN THE ASSESSMENT ORDER ITSELF, IS QUITE ILLOGICAL, UNFAIR AND UNJUST. IT IS QUITE SURPRISING, AS TO HOW THE A.O. HAS PROCESSED THE ORIGINAL RETURN UNDER SEC.143(1), IF IT WAS BELATED AND RAISED ADDITIONAL DEMAND OF TAX. IF PROCESSING OF RETURNS UNDER SEC. 143(1) IS ONLY FOR RAISING ADDITIONAL DEMANDS BUT NOT FOR ISSUING REFU NDS, IT IS AGAINST NATURAL JUSTICE AND FAIRNESS AND THE SPI RIT OF LAW. 6. BEFORE US, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE A.O. HAD NOT POINTED OUT / MENTIONED EITHER DUR ING THE SCRUTINY ASSESSMENT PROCEEDINGS OR IN THE ASSESSMEN T ORDER THAT THE ORIGINAL OR REVISED RETURN OF INCOME WAS B ELATED. WHEN THE ORIGINAL RETURN HAS BECOME BELATED AS PER A.O., THEN THE REVISED RETURN SHOULD ALSO BECOME BELATED. IN SUCH CASE, THE ENTIRE ASSESSMENT PROCEEDINGS FOR SUCH A LONG TIME WAS INFRUCTUOUS AND WASTE. 6.1 HE FURTHER SUBMITTED THAT WHEN THE A.O. HAD BAS ED HIS ENTIRE ASSESSMENT PROCEEDINGS ON THE RECEIPTS AND T DS AMOUNTS OF 26AS STATEMENT AND MADE ADDITION TO THE RETURNED INCOME, HE SHOULD HAVE OBVIOUSLY GIVEN CRE DIT FOR THE PREPAID TAXES OF RS. 2,30,486/-. IT IS SUBMITTE D THAT GIVING A NEW AND DIFFERENT GROUND OF BELATED RETURN FOR REJECTING OUR APPLICATION UNDER SEC.154, WITHOUT RE FERRING/ MENTIONING SAME WORD IN THE ASSESSMENT ORDER ITSELF , IS QUITE ILLOGICAL, UNFAIR AND UNJUST. IT IS SUBMITTED THAT IT IS QUITE SURPRISING, AS TO HOW THE A.O. HAS PROCESSED THE ORIGINAL RETURN UNDER SEC.143(1), IF IT WAS BELATED AND RAISED ADDITIONAL DEMAND OF TAX. I.T.A. NO. 1416/HYD/2016 LALITHA KUCHIBHOTLA :- 7 -: 7. LD. DR, ON THE OTHER HAND, RELIED ON THE ORDERS OF REVENUE AUTHORITIES. 8. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERU SED THE RELEVANT MATERIAL ON RECORD. I FIND THAT SIMILA R ISSUE AROSE BEFORE ME IN THE CASE OF NAGA SRINIVASA RAO K OMPELLA IN ITA NO. 1415/HYD/2016, VIDE ORDER EVEN DATED 12/05/2017, WHEREIN THE FINDINGS ARE AS UNDER: 8. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. AS CONTEND ED BY THE ASSESSEE, THE AO HAD NOT POINTED OUT/MENTIONED EITHER DURING THE SCRUTINY ASSESSMENT PROCEEDINGS O R IN THE ASSESSMENT ORDER THAT THE ORIGINAL OR REVISED R ETURN OF INCOME WAS BELATED. WHEN THE ASSESSEE FILED AN APPLICATION U/S 154 FOR GIVING CREDIT FOR THE PREPA ID TAXES, THE AO REJECTED THE SAME ON THE GROUND THAT THE REVISED RETURN IS TO BE TREATED AS INVALID RETURN A S THE ORIGINAL RETURN OF INCOME WAS FILED BELATEDLY AND CONSEQUENTLY THE TDS CLAIMED IN THE REVISED RETURN COULD NOT BE GIVEN CREDIT. 8.1 IN FORM NO. 35, AT COLUMN 5, AGAINST SECTION, SECTION 143(3) WAS MENTIONED WHILE AT COLUMN 7, BOT H THE SECTIONS 154 AND 143(3) ARE MENTIONED. FURTHER THE DATE OF SERVICE OF DEMAND IS 26/06/2014 AND DATE OF ORDE R U/S 154 IS 23/06/2014. HENCE, I AM OF THE OPINION T HAT THE APPEAL IS AGAINST THE ORDER U/S 154 BEFORE THE CIT(A). ASSESSEE HAS FILED APPEAL WITHIN TIME I.E. 30 DAYS FROM THE DATE OF RECEIPT OF THE ORDER U/S 154. 8.2 IN VIEW OF THE ABOVE OBSERVATIONS, TO MEET THE ENDS OF JUSTICE, I SET ASIDE THE ORDER OF THE CIT(A) AND REMIT THE FILE BACK TO THE AO WITH A DIRECTION TO EXAMINE THE CASE. THE ASSESSEE MAY BE GIVEN CREDIT FOR THE TDS AMOUNT CLAIMED IN THE RETURN, WHICH IS DULY SUPPORTED BY 2 6AS STATEMENT. IT IS DIRECTED THAT AFTER PROVIDING REAS ONABLE I.T.A. NO. 1416/HYD/2016 LALITHA KUCHIBHOTLA :- 8 -: OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THE M ATTER, THE AO SHALL ALLOW THE ASSESSEES APPEAL. 8.1 FOLLOWING THE CONCLUSIONS DRAWN IN THE SAID CAS E, THE ISSUE IS REMITTED BACK TO THE FILE OF THE AO WITH A DIRECTION TO DECIDE THE ISSUE FOLLOWING THE DIRECTIONS GIVEN IN THE SAID CASE. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 12 TH MAY, 2017. SD/- (ASHA V IJAYARAGHAVAIN) JU DICIAL MEMBER HYDERABAD, DATED: 12 TH MAY , 2017. KV COPY TO 1 LALITHA KUCHIBHOTLA, H. NO. 17-37, SBH COLONY, UP PAL, HYDERABAD 500 039 2 ITO, INTERNATIONAL TAXATION 1, HYDERABAD. 3 CIT (A)-10, HYDERABAD. 4 CIT (IT & TP), HYDERABAD. 5 THE DR, ITAT HYDERABAD 6 GUARD FILE