JIGNA DHARMENDRA UPADHAYA, MUMBAI V. ITO 22(1)(2), MUMBAI

ITA 237/MUM/2014

• Counselvise Citation: 23719914 RSA 2014
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2009-2010
• Appeal Filed On: 09-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PAVAN KUMAR BEERLA
• Assessee Lawyers: SAMEER DALAL
• Keywords: Rectification of order; Transactions in derivatives; Revised return
• Section: 154

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J MUMBAI . . , . . , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI B.R.BASKARAN, ACCOUNTANT MEMBER . / ITA NO. 237/MUM/2014 / ASSESSMENT YEAR 2009-2010 JIGNA DHARMENDRA UPADHYAYA, 905, HIMGIRI BLDG., NEELKANTH VIHAR, B.S.MARG, PIPELINE ROAD, GHATKOPAR (EAST), MUMBAI 400 077 / VS. ITO, CPC BANGALORE, ITO 22(1)(2), MUMBAI. ./ ./ PAN/GIR NO. : AAGPU 3104K ( / APPELLANT ) .. ( / RESPONDENT ) APPELLANT BY SHRI SAMEER DALAL RESPONDENT BY : SHRI PAVAN KUMAR BEERLA # $ % / DATE OF HEARING : 16/06/2015 # $ % / DATE OF PRONOUNCEMENT : 16/06/2015 / O R D E R PER I.P.BANSAL, JM: THIS IS AN APPEAL FILED BY THE ASSESSEE AND IT IS D IRECTED AGAINST THE ORDER PASSED BY LD. CIT(A)-7, MUMBAI DATED 25.11.2013 FOR ASSESSMENT YEAR 2009- 10. GROUNDS OF APPEAL READ AS UNDER: THE LEARNED CIT(A) ERRED ON FACTS, IN LAW AND UNDE R THE CIRCUMSTANCES IN :- A) CONFIRMING THE ORDER OF ITO, CPC BANGALORE U/S 154 DT.28.01.2011 WHO HELD THAT NO MISTAKE APPARENT FROM RECORD HAS TAKEN PLAC E IN NOT CARRYING FORWARD IN INTIMATION MADE U/S.143(1) DT. 10.05.2010 THE LOSS IN F&O BUSINESS INCURRED BY THE APPELLANT DURING THE YEAR OF RS.20,37,162/- AND SHOWN BY HER IN HER RETURN OF INCOME FILED WITHIN THE TIME PROVIDED U/S.139(1) OF INCOME TAX ACT. B) OBSERVING THAT SINCE RS.'NII' IS MENTIONED IN E NTRY 43 OF PART A - P&L, THE SAME FIGURE OF RS.NIL SHOULD BE TAKEN TO PART B - IT ENT RY A-1 AND NOT LOSS OF . / ITA NO. 237/MUM/2014 / ASSESSMENT YEAR 2009-2010 2 RS.20,37,162/- SHOWN BY THE APPELLANT ESPECIALLY SI NCE EVERYWHERE IN THE E- RETURN THE APPELLANT HAS GIVEN CLEAR DETAILS TO CAR RY FORWARD LOSS. C) FAILING TO COMPREHEND THE HUGE COMPLEXITY IN TH E NEWLY INTRODUCED E-RETURN RUNNING INTO 24 PAGES WHICH SMALL TIMERS LIKE APPEL LANT WHO HAD FILED THE E- RETURN FOR THE FIRST TIME AND DECIDING AGAINST THE APPELLANT ON THE BASIS OF TECHNICAL CONSIDERATIONS IT BEING THAT NOT SHOWING LOSS IN F&O IN ENTRY 43 OF PART A - P&L EVEN THOUGH SHOWN AT ALL OTHER PLACES IN TH E E-RETURN. D) NOT ALLOWING THE BUSINESS LOSS OF RS.20,37,162/- TO BE CARRIED FORWARD BY THE APPELLANT BY RELYING ON TECHNICAL CONSIDERATIONS WH EN PITTED AGAINST SUBSTANTIAL JUSTICE. E) NOT HOLDING THE RETURN OF INCOME AS DEFECTIVE W ITHIN THE MEANING OF SEC.139(9) AND ALLOWING RECTIFICATION OF THE SAME AND DIRECTLY REJECTING THE LOSS IN THE INTIMATION MADE U/S.143(1) DT.10.05.2010. ALL THE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO EACH OTHER. 2. IN THIS CASE ORIGINALLY THE RETURN WAS FILED ELE CTRONICALLY. COPY OF THIS RETURN IS FILED IN THE PAPER BOOK FROM PAGE 1 TO 24 . IT IS THE CASE OF THE ASSESSEE THAT WHILE FILING THE RETURN ELECTRONICAL LY MISTAKE HAS CREPT IN WHILE FILLING COLUMN NO.43 AT PAGE -5 OF THE RETURN, WHER EIN THE ASSESSEE WAS REQUIRED TO STATE THE PROFIT BEFORE TAXES (40-41 -42) AS NIL, WHEREAS IT WAS REQUIRED TO SUBMIT A FIGURE OF RS.(-) 20,37,162/- W HICH WAS RIGHTLY FILLED IN PART B-11 OF THE SAME RETURN, WHEREIN AT SL.NO.3 UN DER THE HEAD PROFIT AND GAINS FROM BUSINESS OR PROFESSION THE FIGURE OF RS . (-) 20,37,162/- HAS BEEN MENTIONED. TO SHOW THAT THIS FIGURE WAS MENTIONED TIME AND AGAIN IN THE RETURN REFERENCE WAS ALSO MADE IN SCHEDULE BP AT PAGE-11 OF THE PAPER BOOK, WHEREIN AGAIN IN THE COMPUTATION OF INCOME FROM BU SINESS OR PROFESSION THIS AMOUNT OF RS.(-) 20,37,162/- IS MENTIONED AT THREE PLACES. THUS, IT IS CASE OF THE ASSESSEE THAT IT IS ONLY A MISTAKE IN FILLING ITEM NO.43, WHICH WAS TAKEN INTO ACCOUNT BY PROCESSING THE RETURN AND THE INCOM E OF THE ASSESSEE WAS PROCESSED AT NIL IN PLACE OF A LOSS OF RS.20,37,162 /-. IT WAS SUBMITTED THAT ASSESSEE HAD ALSO SUBSEQUENTLY FILED REVISED RETUR N ELECTRONICALLY ON 5/3/2011, COPY OF WHICH WAS ALSO PLACED ON OUR RECO RD IN WHICH THE SAID MISTAKE WAS CORRECTED I.E. FILLING COLUMN NO.43 AT PAGE-5 OF THE RETURN, WHEREIN LOSS WAS CLEARLY STATED AT RS.20,37,162/-. . / ITA NO. 237/MUM/2014 / ASSESSMENT YEAR 2009-2010 3 3. SUBSEQUENT TO FILING ORIGINAL RETURN AND BEFORE FILING THE REVISED RETURN THE ASSESEE HAD FILED AN APPLICATION BEFORE THE CON CERNED ITO (ITO WARD 22(1)(2) TO RECTIFY THE MISTAKE IN THE INTIMATION I N WHICH WHILE PROCESSING THE RETURN THE AFOREMENTIONED LOSS WAS NOT TAKEN INTO C ONSIDERATION. IMMEDIATELY, THE ASSESSEE VIDE LETTER DATED 26/6/2010 ALSO FILED AN APPLICATION UNDER SECTION 154 CENTRALIZED PROCESSING CENTER, BANGALO RE. FOR THE SAKE OF COMPLETENESS THE APPLICATION FILED BEFORE ITO AS WE LL AS BEFORE CENTRALIZED PROCESSING CENTER ARE REPRODUCED BELOW: DATE 21 ST JUNE 2010 TO INCOME TAX OFFICER, WARD 22(1)2, MUMBAI. SUB: REQUEST FOR RECTIFICATION ORDER U/S. 154 OF IN COME TAX ACT, 1961. REF: JIGNA DHARMENDRA UPADHAY: PAN: AAGPU3104K ,A. Y. 2009-10. RESPECTED MADAM. WE THANK YOU FOR COMPLETING THE ASSESSMENT OF OUR A BOVE MENTIONED CLIENT FOR THE ABOVE REFERRED PERIOD. WE HAVE RECEIVED INTIMATION UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 WHEREBY YOU HAVE ERRONEOUSLY NOT CONSIDERED BU SINESS LOSSES OF CURRENT YEAR. FOR YOUR PERUSAL WE ARE ATTACHING HEREWITH COMPUTATION OF TOTAL INCOME FOR ABOVE REFERRED PERIOD. HENCE WE REQUEST YOU TO KINDLY CONSIDER THE SAME AN D PASS THE RECTIFICATION ORDER AS EARLY AS POSSIBLE AND ALSO UPDATE YOUR RECORDS. KINDLY DO THE NEEDFUL & OBLIGE. 26 TH JULY, 2010 CENTRALIZED PROCESSING CENTER, POST BAG NO.1, ELECTRONIC CITY POST OFFICE, BANGALORE 560100 DEAR SIR, RE: JIGNA DHARMENDRA UPADHYAY PAN: AAGPGU 3104K ASST YEAR : 2009-10 COMMUNICATION REF : NO.CPC/0910/14/1000160589 SUB: REQUEST FOR RECTIFICATION U/S. 154. . / ITA NO. 237/MUM/2014 / ASSESSMENT YEAR 2009-2010 4 OUR ABOVE REFERRED CLIENT IS IN RECEIPT OF INTIMATI ON U/S 143 (1) ISSUED BY YOUR OFFICE. ON SCRUTINIZING THE SAME IT IS NOTICED THAT WHILE C OMPUTING THE INCOME U/S 143 (1) LOSS UNDER THE HEAD INCOME FROM BUSINESS OR PROFESSIO N' AMOUNTING TO RS. 20,37,162/- IS NEITHER CONSIDERED NOR ALLOWED TO BE CARRIED FORWAR D. WE ARE ENCLOSING HEREWITH THE COMPUTATION OF INCOM E TO BRING HOME THE POINT ELABORATELY. YOU WILL APPRECIATE THAT THE LOSS UNDER THE HEAD 'I NCOME FROM BUSINESS OR PROFESSION' COMPUTED BY OUR IS ALLOWABLE AND AFTER ADJUSTMENT W ITH INCOME FROM OTHER SOURCES, UNABSORBED LOSS AMOUNTING TO RS 20,33,488 IS ALLOWE D TO BE CARRIED FORWARD TO NEXT ASSESSMENT YEAR U/S 72 OF THE INCOME TAX ACT, 1961. PLEASE NOTE THAT SCHEDULE CFL IN RESPECT OF CARRIED FORWARD LOSSES WERE ALSO FILLED UP WITH THE SAID AMOUNT. WE ARE ENCLOSING HEREWITH A COPY O F RETURN FILED ALONGWITH SAID SCHEDULE FOR YOUR READY REFERENCE AND KIND PERUSAL. THE ABOVE BEING MISTAKE APPARENT ON FACE OF THE RE CORD, WE REQUEST YOU TO RECTIFY THE ABOVE INTIMATION U/S 154 BY COMPUTING LOSS UNDER TH E HEAD 'INCOME FROM BUSINESS OR PROFESSION' AND ALLOW THE UNABSORBED LOSS OF RS 20, 33,488 TO BE CARRIED FORWARD AND ISSUE TO OUR CLIENT REVISED INTIMATION OR ORDER U/S 154 AT YOUR EARLIEST. YOURS TRULY FOR A.P.DOSHI & CO, CHARTERED ACCOUNTANTS. 3.1 HOWEVER, THE AO HAS NOT DECIDED THE APPLICATI ON AS AGAINST THAT COMPUTERIZED PROCESSING CENTRE HAS REJECTED THE APP LICATION WITH THE FOLLOWING OBSERVATIONS: DEAR MADAM/SIR, SUBJECT: REJECTION OF REQUEST FOR RECTIFICATION, UNDER SECTION 154 OF THE INCOME TAX ACT, 1961-REG. PLEASE REFER TO THE RECTIFICATION REQUEST FILED BY YOU FOR THE ASSESSMENT YEAR 2009-10 IN RESPECT OF ABOVE MENTIONED ORDER AND RECEIVED AT CE NTRALIZED PROCESSING CENTRE ON 30.7.2010. ON VERIFICATION, IT IS SEEN THAT THERE IS NO PRIMA FACIE ERROR IN THE ORDER WHICH YOU HAVE SOUGHT TO BE RECTIFIED. THEREFORE, YOUR APPLICATI ON FOR RECTIFICATION UNDER SEC. 154 IS REJECTED FOR THE FOLLOWING REASONS (IF ANY). INCOME CORRECTLY COMPUTED AS PER SCHEDULE PART-A P& L AND BP OF THE INCOME TAX RETURN. COLUMN-43 OF SCHEDULE P&L ACCOUNT HAS TO BE TAKEN I N COLUMN-1 OF SCH BP. SCHEDULE P&L AND SCH BP NOT PROPERLY FILED FOR CLAIM OF LOS S. 4. AGGRIEVED ASSESSEE FILED AN APPEAL BEFORE LD. CI T(A) WHO HAS REFERRED TO THE PROVISIONS OF SECTION 143(1) WHICH WAS AMENDED W.E.F. 1/4/2008 AND ACCORDING TO THE SAID PROVISION, IN THE INTIMATION ISSUED UNDER SECTION 143(1) ONLY FOLLOWING MISTAKES COULD BE RECTIFIED. A. ANY ARITHMETICAL ERROR IN THE RETURN; OR . / ITA NO. 237/MUM/2014 / ASSESSMENT YEAR 2009-2010 5 B. AN INCORRECT CLAIM, IF SUCH IN CORRECT CLAIM IS APPARENT FROM ANY INFORMATION IN THE RETURN. FOR THIS PURPOSE, THE TERM AN INCORRECT CLAIM APP ARENT FROM ANY INFORMATION IN THE RETURNSHALL MEAN SUCH CLAIM ON THE BASIS OF ANY EN TRY, IN THE RETURN; A. OF AN ITEM, WHICH IS INCONSISTENT WITH ANOTHER EN TRY OF THE SAME OR SOME OTHER ITEM IN SUCH RETURN. B. IN RESPECT OF WHICH, INFORMATION REQUIRED TO BE FUR NISHED TO SUBSTANTIATE SUCH ENTRY, HAS NOT BEEN FURNISHED UNDER THIS ACT; OR C. IN RESPECT OF A DEDUCTION, WHERE SUCH DEDUCTION EXC EEDS SPECIFIED STATUTORY LIMIT WHICH MAY HAVE BEEN EXPRESSED AS MONETARY AMOUNT O R PERCENTAGE OR RATIO OR FRACTION. 4.1 LD. CIT(A) HELD THAT THE COMPUTERIZED PROCESSIN G CENTRE IS FOLLOWING AFOREMENTIONED PROVISIONS, THEREFORE, THERE IS NO MISTAKE. LD. CIT(A) HAS ALSO REFERRED TO OTHER DECISIONS TO ARRIVE AT THE CONCL USION THAT THE MISTAKE CLAIMED BY THE ASSESSEE DOES NOT FALL WITHIN THE AMBIT OF W ORK MISTAKE AS FOUND IN SECTION 154. THE ASSESSEE IS AGGRIEVED, HENCE HAS FILED AFOREMENTIONED GROUNDS OF APPEAL. 5. AFTER NARRATING THE FACTS, IT WAS SUBMITTED BY L D. AR THAT THERE IS A PROVISION CONTAINED IN SECTION 154 THAT, IF THERE I S A MISTAKE, THE SAME SHOULD BE RECTIFIED. THE ASSESSEE HAD FILED APPLICATION B EFORE THE AO AS WELL AS COMPUTERIZED PROCESSING CENTRE. THE MISTAKE WAS AP PARENT FROM RECORD AS THERE WAS ONLY A MISTAKE IN FILLING COLUMN NO.43, W HEREAS IN THE SAME RETURN AT SEVERAL OTHER PLACES THE FIGURE WAS CORRECTLY WR ITTEN, ON THE BASIS OF WHICH, IT CAN BE ASCERTAINED THAT IT WAS ONLY AN INADVERTENT MISTAKE ON THE PART OF THE ASSESSEE WHILE FILING THE RETURN BY ELECTRONIC MODE . IT WAS SUBMITTED THAT ASSESSEE HAD ALSO FILED A REVISED RETURN WITHIN PRE SCRIBED TIME FOR WHICH ALSO NO COGNIZANCE HAS BEEN TAKEN. THUS, IT WAS SUBMIT TED BY LD. AR THAT APPROPRIATE RELIEF SHOULD BE GIVEN TO THE ASSESSEE. 6. LD. DR ON THE OTHER HAND, RELIED UPON THE ORDER PASSED BY COMPUTERIZED PROCESSING CENTRE AND LD. CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. THE ASSESEE WITH THE HELP OF COPY OF ORIGINAL RETURN FILED . / ITA NO. 237/MUM/2014 / ASSESSMENT YEAR 2009-2010 6 ELECTRONICALLY HAS BEEN ABLE TO DEMONSTRATE THAT IT WAS A MISTAKE APPARENT FROM RECORD. PROVISIONS OF SECTION 143(1)(A) OF TH E 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 SECTION 143(1) DEFINE AN INCORR ECT CLAIM APPARENT FROM ANY INFORMATION IN THE RETURN AS UNDER: EXPLANATION FOR THE PURPOSES 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 IN SUCH RETURN; (II) IN RESPECT OF WHICH THE INFORMATION REQUIRED T O BE FURNISHED UNDER THIS ACT TO SUBSTANTIATE SUCH ENTRY HAS NOT BEEN SO FURNISHED ; OR (III) IN RESPECT OF A DEDUCTION, WHERE SUCH DEDUCTI ON EXCEEDS SPECIFIED STATUTORY LIMIT WHICH MAY HAVE BEEN EXPRESSED AS MONETARY AMOUNT OR PERCENTAGE OR RATIO OR FRACTION ; (B) THE ACKNOWLEDGMENT OF THE RETURN SHALL BE DEEME D TO BE THE INTIMATION IN A CASE WHERE NO SUM IS PAYABLE BY, OR REFUNDABLE TO, THE ASSESSE E UNDER CLAUSE (C), AND WHERE NO ADJUSTMENT HAS BEEN MADE UNDER CLAUSE (A). THE MISTAKE, AS IS CLAIMED BY THE ASSESSEE TO BE A PPARENT FROM THE RECORD WOULD FALL WITHIN SUB-CLAUSE (I) OF CLAUSE (A) OF T HE EXPLANATION AS THE FIGURE OF NIL STATED AGAINST COLUMN NO.43 WOULD BE INCONSIS TENT WITH THE OTHER ENTRIES OF THE SAME OR SOME OTHER ITEMS IN THE SAME VERY RE TURN. THEREFORE, LD. CIT(A) WAS WRONG IN HOLDING THAT ASSESSEE IS NOT ENTITLED TO GET THE IMPUGNED MISTAKE RECTIFIED. THE ADJUSTMENT SOUGHT FOR BY THE ASSESS EE IN THE RECTIFICATION APPLICATION WOULD BE IN ACCORDANCE WITH THE PROVIS IONS OF SECTION 143(1) AND IS AN INADVERTENT MISTAKE WHICH IS RECTIFIABLE UNDER T HE PROVISIONS OF SECTION 154 OF THE ACT. ACCORDINGLY, WE HOLD THAT THERE IS A M ISTAKE 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 SECTION 154 OF THE ACT. . / ITA NO. 237/MUM/2014 / ASSESSMENT YEAR 2009-2010 7 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 16/06/201 5 # + , - 16/06/2015 # SD/- SD/- ( . . / B.R.BASKARAN ) . . /I.P.BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; , DATED 16/06/2015 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. /$ ( ) / THE CIT(A)- 4. /$ / CIT 5. 01 $23 , % 23 , / DR, ITAT, MUMBAI 6. 4 / GUARD FILE. / BY ORDER, 0$ $ //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . . ./ VM , SR. PS