Our Web Studio Software Solutions Private Limited, Hyderabad, Hyderabad V. ITO, Ward-16(1), Hyderabad, Hyderabad

ITA 1677/HYD/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2581 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 13-12-2016
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Assessee Lawyers: LAXMINIVAS SHARMA
• Keywords: Rectification of order; Principle of natural justice; Revised return
• Section: 115JB; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 1677HYD/2016 ASSESSMENT YEAR: 2009-10 M/S. OUR WEB STUDIO SOFTWARE SOLUTIONS PVT. LTD., HYDERABAD. PAN AAAC06414B VS. ITO, WARD 16(1) HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI LAXMI NIVAS SHARMA, REVENUE BY : SMT. SUMAN MALIK DATE OF HEARING : 19-04-2017 DATE OF PRONOUNCEMENT : 28-04-2017 ORDER PER B. RAMAKOTAIAH, AM THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF CIT(A)-4, HYDERABAD DATED 18-10-2016. THE ISSUE IN THIS APPEAL IS WITH REFERENCE TO THE MISTAKE IN UPLOADING THE RETURN AND CONSEQUENT DENIAL OF EXEMPTION U/S 10A OF THE IT ACT. ASSESSEE HAS RAISED THE FOLLOWING GROUNDS. 2. THE LD. CIT(A) ERRED IN COMING TO THE CONCLUSION THAT NO INTERFERENCE IS NECESSARY IN ORDER OF AO AND DISMISSING THE GROUNDS OF APPEAL FILED BY THE ASSESSEE WITHOUT CONSIDERING ON MERIT. 3. THE CIT(A) ERRED IN NOT CONSIDERING THE MISTAKE IS A MISTAKE APPARENT FROM RECORD WHICH IS RECTIFIABLE AS PER LAW. 2 ITA NO. 1677/HYD/2016 M/S. OUR WEB STUDIO SOFTWARE SOLUTIONS PVT LTD, HYDERABAD 4. THE LD. CIT(A) OUGHT TO HAVE GIVEN ONE MORE OPPORTUNITY OF HEARING TO THE ASSESSEE IN THE INTEREST OF NATURAL JUSTICE. GROUND NOS. 1 & 5 ARE GENERAL IN NATURE. 2. BRIEFLY STATED, ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF SOFTWARE AND IT ENABLED SERVICES. IT ELECTRONICALLY FILED ITS RETURN OF INCOME FOR THE A.Y 2009-10 DECLARING TOTAL INCOME OF RS. 1,43,430/-, WHILE BUSINESS PROFITS OF RS. 14,37,394/- WAS CLAIMED AS EXEMPTION U/S 10A OF THE IT ACT. ASSESSEE PAID TAXES OF RS. 1,59,384/- ON BOOK PROFITS U/S 115JB OF THE IT ACT RS. 15,47,420/-. HOWEVER ASSESSEE RECEIVED INTIMATION U/S 143(1) OF THE IT ACT FROM CENTRAL PROCESSING CENTRE, BENGALURU RAISING A DEMAND OF RS. 2,25,790/- AND ALSO RS. 1,590/- UNDER FBT. IT WAS NOTICED BY ASSESSEE THAT THE INCOME FROM BUSINESS WAS WRONGLY ENTERED IN COLUMN NO. 37, WHILE CLAIMING THE DEDUCTION U/S 10A OF THE IT ACT IN COLUMN NO. 35 AND DUE TO THE MISTAKE IN UPLOADING THE INCOME IN THAT COLUMN GOT TAXED. ACCORDINGLY ASSESSEE FILED A RECTIFICATION PETITION BEFORE CENTRAL PROCESSING CENTRE, BENGALURU WHICH REJECTED THE SAME ON THE REASON THAT THERE IS NO PRIMA-FACIE ERROR IN THE ORDER WHICH THE ASSESSEE SOUGHT TO BE RECTIFIED. THEREAFTER, ASSESSEE FILED A RECTIFICATION PETITION U/S 154 OF THE IT ACT BEFORE A.O REQUESTING FOR RECTIFICATION OF ORDER U/S 143(1) OF THE IT ACT AND THE SAME WAS REJECTED BY A.O STATING THAT THERE IS NO MISTAKE AS ENVISAGED IN SEC. 154 OF THE IT ACT. IN THE MEANTIME, ASSESSEE ALSO FILED A REVISED RETURN, CORRECTLY REFLECTING THE AMOUNTS INVOLVED. HOWEVER 3 ITA NO. 1677/HYD/2016 M/S. OUR WEB STUDIO SOFTWARE SOLUTIONS PVT LTD, HYDERABAD A.O DID NOT ACCEPT THE SAME AS IT WAS FILED BEYOND THE PERMITTED TIME. CONSEQUENT TO THE REJECTION OF THE APPLICATION U/S 154 OF THE IT ACT BY THE ORDER DATED 17-10- 2014, ASSESSEE PREFERRED AN APPEAL TO LD. CIT(A), HOWEVER, LD.CIT(A) IN THE EX-PARTE ORDER CONFIRMED THE ACTION OF A.O AND ACCORDINGLY THE PRESENT APPEAL WAS PREFERRED. 3. LD. COUNSEL SUBMITTED THAT ASSESSEE HAS WRONGLY ENTERED THE AMOUNTS IN DIFFERENT COLUMNS WHICH RESULTED IN THE DEDUCTION BEING DENIED. IT WAS SUBMITTED THAT ASSESSEES BUSINESS PROFITS ARE ELIGIBLE FOR U/S 10A OF THE IT ACT AND THE SAME WAS CORRECTLY MENTIONED IN THE RETURN ALSO AND SUBSEQUENTLY, ASSESSEE FILED A REVISED RETURN ON THE ADVICE OF ADD. CIT IN WRITING AND REFERRED TO THE IMPUGNED ORDER OF THE A.O, WHEREIN IN PARA 3 REFERENCE FROM ADD.CIT-16, HYDERABAD DATED 08-02-2013 WAS STATED BY A.O, WHILE REJECTING THE PETITION. IT WAS SUBMITTED THAT IT WAS A MISTAKE WHICH CAN BE CORRECTED AND RELIED ON THE COORDINATE BENCH DECISION IN THE CASE OF JIGNA DHARMENDRA UPADHYAYA VS ITO CPC BANGALORE/ ITO 22(1)(2), MUMBAI IN ITA NO 227/MUM/2014. IT WAS FURTHER SUBMITTED THAT THE FACTS ARE SIMILAR AND HENCE PRAYED FOR SUITABLE DIRECTIONS TO A.O. 4. LD. DR HOWEVER SUBMITTED THAT ASSESSEE DID NOT FILE A REVISED RETURN WITHIN THE TIME AND THE SAME CANNOT BE CORRECTED IN THE PROCEEDINGS U/S 154. 4 ITA NO. 1677/HYD/2016 M/S. OUR WEB STUDIO SOFTWARE SOLUTIONS PVT LTD, HYDERABAD 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE DOCUMENTS PLACED ON RECORD IN THE PAPER BOOK. AS SEEN FROM THE RETURN OF INCOME FILED BY ASSESSEE ORIGINALLY, A COPY OF WHICH IS PLACED IN PAPER BOOK, UNDER THE HEAD COMPUTATION OF INCOME BUSINESS / PROFESSION ASSESSEE HAS CORRECTLY STATED THE AMOUNTS IN COLUMN NO. 1,3,6,10 & 11 ETC., ULTIMATELY IN COLUMN NO. 32 AND AGAIN IN COLUMN NO. 34 THE INCOME FROM BUSINESS WERE SHOWN AT RS. 14,37,394/-. COLUMN NO.35 PERTAINS TO VARIOUS DEDUCTIONS U/S 10A OF THE IT ACT ETC., IN WHICH IN SUB ITEM I) ASSESSEE HAS CORRECTLY CLAIMED DEDUCTION U/S 10A OF THE IT ACT AGAIN AT RS. 14,37,394/-. THE TOTAL COLUMN ALSO CORRECTLY SHOWN THE SAME AMOUNT IN (V) OF COLUMN NO. 35. IN COLUMN NO. 36 PERTAINING TO NET PROFIT OR LOSS FROM BUSINESS / PROFESSION, IT WAS CLEARLY STATED AS ZERO (0) BEING THE RESULTANT FIGURE OF (34)-(35V). HOWEVER IN COLUMN NO. 37 WITH REFERENCE TO SPECIAL BUSINESS, INSTEAD OF MENTIONING ZERO(0), ASSESSEE HAS AGAIN PLACED THE SAME AMOUNT OF RS. 14,37,394/- WRONGLY, WHICH WERE CARRIED OVER TO COLUMN C- INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS. DUE TO THE MISTAKE IN ENTERING IN COLUMN NO. 37 AND CONSEQUENTLY IN ITEM C, ASSESSEE WAS VISITED WITH FURTHER DEMAND, AS THE RETURNS HAVE PROCESSED ON COMPUTER BY THE CPC, BENGALURU. ASSESSEE HAVING RECEIVED THE INTIMATION COULD HAVE FILED A CORRECT REVISED RETURN. INSTEAD IT FILED A PETITION U/S 154 OF THE IT ACT TO THE CPC, BENGALURU WHICH WAS REJECTED. FURTHER ON THE ADVICE OF THE DY. CIT, ASSESSEE HAS FILED REVISED RETURN BUT IT IS NOT IN RECORD WHETHER ASSESSEE HAS SOUGHT ANY CONDONATION AS DIRECTED BY THE ADDL. CIT UNDER 119(2) OF 5 ITA NO. 1677/HYD/2016 M/S. OUR WEB STUDIO SOFTWARE SOLUTIONS PVT LTD, HYDERABAD THE IT ACT. HOWEVER, THE FACT IS THAT ASSESSEE FILED ANOTHER PETITION BEFORE A.O, BRINGING IT TO NOTICE THAT MISTAKE IN UPLOADING THE FORM AND CORRECTION THEREOF. THE A.O REJECTED THE SAME. 6. ON SIMILAR FACTS, THE COORDINATE BENCH AT MUMBAI IN A CASE OF MISTAKE IN UPLOADING THE RETURN FORM HAS CONSIDERED THE POWERS OF THE A.O U/S 154 OF THE IT ACT AND 143(1) OF THE IT ACT AND DIRECTED TO RECTIFY THE MISTAKE. THE ORDER OF COORDINATE BENCH AT MUMBAI IN THE CASE OF JIGNA DHARMENDRA UPADHYAYA( SUPRA) IS AS UNDER: 7. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENTIONS HAVE CAREFULLY BEEN CONSIDERED. THE ASSESSEE WITH THE HELP OF COPY ORIGINAL RETURN FILED ELECTRONICALLY HAS BEEN ABLE TO DEMONSTRATE THAT IT WAS A MISTAKE APPARENT FROM RECORD. PROVISIONS OF SEC. 143(1) OF THE IT ACT PERMITS THE FOLLOWING ADJUSTMENTS: (I) ANY ARITHMETICAL ERROR IN THE RETURN: OR (II) AN INCORRECT CLAIM, IF SUCH INCORRECT CLAIM IS APPARENT FROM ANY INFORMATION IN THE RETURN: 7.1 EXPLANATION TO SEC. 143(1) DEFINE AN INCORRECT CLAIM APPARENT FROM ANY INFORMATION IN THE RETURN AS UNDER: EXPLANATION FOR THE PURPOSE OF THIS SUB-SECTION,-(A) AN INCORRECT CLAIM APPARENT FROM ANY INFORMATION IN THE RETURN SHALL MEAN A CLAIM, ON THE BASIS OF AN ENTRY, IN THE RETURN. (I) OF AN ITEM, WHICH IS INCONSISTENT WITH ANOTHER ENTRY OF THE SAME OR SOME OTHER ITEM IS 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 DEDUCTION EXCEEDS SPECIFIED STATUTORY LIMIT WHICH MAY HAVE BEEN EXPRESSED AS MONETARY AMOUNT OR PERCENTAGE OR RATIO OR FRACTION; (B) THE ACKNOWLEDGEMENT OF THE RETURN SHALL BE DEEMED TO BE THE INTIMATION IN A CASE WHERE NO SUM IS PAYABLE BY, OR REFUNDABLE TO, THE ASSESSEE UNDER CLAUSE (C) AND WHERE NOT ADJUSTMENT HAS BEEN MADE UNDER CLAUSE (A) 6 ITA NO. 1677/HYD/2016 M/S. OUR WEB STUDIO SOFTWARE SOLUTIONS PVT LTD, HYDERABAD THE MISTAKE, AS IS CLAIMED BY THE ASSESSEE TO BE APPARENT FROM THE RECORD WOULD FALL WITHIN SUB-CLAUSE (I) OF CLAUSE (A) OF THE EXPLANATION AS THE FIGURE OF NIL STATED AGAINST COLUMN NO. 43 WOULD BE INCONSISTENT WITH THE OTHER ENTRIES OF THE SAME OR SOME OTHER ITEMS IN THE SAME VERY RETURN. THEREFORE, LD. CIT(A) WAS WRONG IN HOLDING THAT ASSESSEE IS NOT ENTITLED TO GEN THE IMPUGNED MISTAKE RECTIFIED. THE ADJUSTMENT SOUGHT FOR BY THE ASSESSEE IN THE RECTIFICATION APPLICATION WOULD BE IN ACCORDANCE WITH THE PROVISIONS OF SEC. 143(1) AND IS AN INADVERTENT MISTAKE WHICH IS RECTIFIABLE UNDER THE PROVISION OF SEC. 154 OF THE ACT. ACCORDINGLY, WE HOLD THAT THERE IS A MISTAKE APPARENT FROM RECORD WHICH IS REQUIRED TO BE RECTIFIED. WE DIRECT THE A.O AS WELL AS COMPUTERIZED PROCESSING CENTER TO RECTIFY THE MISTAKE AND ACCEPT THE APPLICATION FILED BY THE ASSESSEE UNDER THE PROVISIONS OF SEC. 154 OF THE IT ACT. RESPECTFULLY FOLLOWING THE SAME, WE HOLD THAT THERE IS A MISTAKE APPARENT FROM RECORD WHICH IS REQUIRED TO BE RECTIFIED. WE DIRECT THE A.O AS WELL AS THE CPC, BENGALURU TO RECTIFY THE MISTAKE AND ACCEPT THE APPLICATION FILED BY ASSESSEE UNDER THE PROVISIONS OF SEC. 154 OF THE IT ACT. 7. IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 28 TH APRIL, 2017. SD/- SD/- (P. MADHAVI DEVI) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 28 TH APRIL, 2017. 7 ITA NO. 1677/HYD/2016 M/S. OUR WEB STUDIO SOFTWARE SOLUTIONS PVT LTD, HYDERABAD KRK 1) M/S OUR WEB STUDIO SOFTWARE SOLUTIONS PVT. LTD., # 509, 5 TH FLOOR, DIAMOND BLOCK, LUMBANI ROCKDALE, SOMAJIGUDA, HYDERABAD-82 2) ITO, WARD-16(1) HYDERABAD. 3) CIT(A) -4, HYDERABAD 4) ADDL.CIT-4 HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6) GUARD FILE