RANJITSINH ABHAYSINH PARMAR, RAJKOT V. ACIT, CIRCLE-2(2), RAJKOT, RAJKOT

ITA 266/RJT/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 5237 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-07-2024
• Assessment Year: 2016-2017
• Appeal Filed On: 20-07-2023
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ KUMAR GUPTA
• Keywords: Revised return
• Section: 143(3); 139(5); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND DINESH MOHAN SINHA, JUDICIAL MEMBER आयकर अपील सं./ITA No.266/RJT/2023 नधा रण वष / Assessment Year: (2016-17) (Physical Hearing) Ranjitsinh Abhaysinh Parmar, Divya Kunj, 4/5, Shramjivi Society, Rajkot - 360001 Vs. The ACIT, Circle – 2(2), Rajkot थायीलेखासं./जीआइआरसं./PAN/GIR No.: ACNPP0121A (Assessee) (Respondent) Assessee by : Shri Mehul Ranpura, AR Respondent by : Shri Dheeraj Kumar Gupta, Sr. DR Date of Hearing : 09/07/2024 Date of Pronouncement : 07/08/2024 आदेश / O R D E R PER DR. A. L. SAINI, AM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AYs) 2016-17, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘NFAC/Ld. CIT(A)’], dated 19.06.2023, which in turn arises out of an assessment order passed by the Assessing Officer (in short ‘AO’) u/s 143(3) of the Act, dated 24.12.2018. 2. The grounds of appeal raised by the assessee are as follows: “1. The grounds of appeal mentioned hereunder are without prejudice to one another. 2. The ld. Commissioner of Income-tax (Appeals), National Faceless Centre, Delhi hereinafter referred to "CIT(A)"] erred on facts as also in law in dismissing the appeal ex-parte affording adequate opportunity of heard. 3. The ld. CIT(A) erred on facts as also in confirming disallowance standard deduction of Rs.3,27,175/- and of interest on housing loan of Rs.2,14,211/- from Page | 2 ITA No.266/RJT/2023 Ranjitsinh Abhaysinh Parmar the rental income of Rs.10,90,584/- Singapore flat on the alleged ground non filing of revised return of income. The disallowance confirmed is unjustified uncalled for, which deserves deleted, may kindly be deleted. 4. Your Honour's assessee craves leave to add, to amend, alter, or withdraw more grounds of appeal on or being hearing of appeal.” 3. At the outset, Learned Counsel for the assessee informed the Bench that assessee does not wish to press ground no.2, therefore we dismiss ground no.2 raised by the assessee, as not pressed. 4. The effective ground before the Tribunal to adjudicate, is the ground no.3 wherein the assessee’s main grievance is that Ld. CIT(A) disallowed the standard deduction of Rs.3,27,175/- and interest on housing loan of Rs.2,14,211/- from rental income of the assessee. 5. Brief facts, as discernible from the orders of lower authorities are that assessee before us, is an individual, and deriving salary income from Suzlon Energy Ltd. Besides, assessee is also deriving rental income from letting out property, capital gain on sale of shares and securities and income from other sources i.e. interest on loan/advance given, interest on bonds, interest from saving bank account, dividend income etc. The Return of income for the assessment year under consideration, was filed on 05.08.2018, declaring total income at Rs.1,77,85,570/-. At the time of filing return of income, an inadvertent mistake was crept i.e. rent received of Rs.10,90,584/- on Flat at Singapore was remains to be considered in computation of income and standard deduction u/s 24(a) of the Act, of Rs.3,27,175/- and interest on housing loan of Rs.2,14,211/- from rental income of Rs.10,90,584/- was to be claimed by the assessee. During the course of assessment proceedings the assessee, had vide letter dated 16.12.22018, filed revised computation of income by Rs.5,49,198/- (Rs.10,90,584 - Rs.3,27,175 - Rs.2,14,211), on account of rental income on Singapore flat after deducting standard deduction u/s. 24(a) and Page | 3 ITA No.266/RJT/2023 Ranjitsinh Abhaysinh Parmar interest on housing loan and to treat the return of income revised to that extent. However, the assessing officer finalized the assessment proceeding u/s 143(3) of the Act, vide order dated 24.12.2018, assessing the total income of assessee at Rs.1,88,76,150/-, wherein assessing officer disallowed the claim of standard deduction u/s 24(a) of Rs.3,27,175/- and interest on housing loan of Rs.2,14,211/- from rental income of Rs.10,90,584/- on Singapore flat, relying on the judgment of Hon`ble Supreme Court in the case of M/s Goetz (India) Ltd. vs. CIT, 284 ITR 323 (SC), and added the same to the total income of the assessee. 6. Aggrieved by the order of the assessing officer, the assessee carried the matter in appeal before Ld. CIT(A), who has confirmed the addition made by the assessing officer. The ld CIT(A) observed that there is no provision in the Income Tax Act, to consider the additional deduction except otherwise than by way of a revised return of income in terms of section 139(5) of the Act. In the assessee`s case on hand, the notice of scrutiny u/s 143(2) was issued on 31.07.2017 and the assessee had time to file the revised return any time before the expiry of one year from the end of the relevant assessment year i.e., 31.3.2018. The revised computation was filed on 16.12.2018, much after the expiry of the statutory time provided u/s 139(5) of the Act. In view of this, the action of assessing officer denying the claim in absence of a revised return of income was tenable, and hence the ld. CIT(A) had confirmed the action of the assessing officer. 7. Aggrieved by the order of Ld. CIT(A), the assessee is in further appeal before us. 8. Shri Mehul Ranpura, Learned Counsel for the assessee, pleaded that during the assessment proceedings, the assessee submitted revised Page | 4 ITA No.266/RJT/2023 Ranjitsinh Abhaysinh Parmar computation of income, so that assessee may be provided standard deduction, however, Ld. Counsel fairly agreed that since the assessee could not filed the revised return of income, within the time allowed under the Act, therefore assessing officer could not entertain the fresh claim of the assessee. However, the appellate authority can entertain the fresh claim of the assessee provided the relevant documents and evidences during the assessment proceedings were on record of the assessing officer, for that ld Counsel relied on the judgment of Hon`ble Supreme Court in the case of M/s Goetz (India) Ltd (Supra) and stated that the said judgment of the Hon`ble Supreme Court does not restrict the appellate authorities to entertain a fresh claim. Therefore, Ld. Counsel contended that at the time of filing return of income, an inadvertent mistake was crept, i.e., rent received of Rs.10,90,584/- on flat on Singapore was remained to be considered in computation of income. During the course of assessment proceedings, the assessee had,(vide its letter dated 16.12.2018) filed revised computation of income and requested the assessing officer to enhance the income by Rs.5,49,198/- (Rs.10,90,584- Rs.3,27,175- Rs.2,14,211),on account of rental income on Singapore flat after standard deduction u/s 24(a) and interest on housing loan. However, the assessing officer disallowed the claim of the standard deduction u/s 24(a) to the tune of Rs.3,27,175/- and interest on housing loan to the tune of Rs.2,14,211/- from rental income of Rs.10,90,584/- on Singapore flat and added to the income of the assessee, therefore assessee is in appeal before this Tribunal and prayed before the Bench that Tribunal may entertain the fresh claim, therefore instruction may be given by the Tribunal, to the assessing officer to entertain the claim of the assessee after due verification. 9. On the other hand, Learned Senior Departmental Representative (Ld. Sr. DR) submitted that assessee was given enough opportunity and there was ample time to the assessee, to revise the return of income. However, Page | 5 ITA No.266/RJT/2023 Ranjitsinh Abhaysinh Parmar the revised return of income was not filed by the assessee, before the assessing officer, despite of the fact that sufficient time was available to file the revised return of income. The assessee filed only revised computation of income, before the assessing officer, which is not acceptable in view of the judgment of the Hon`ble Supreme Court in the case of M/s Goetz (India) Ltd (Supra), therefore assessee’s appeal may be dismissed. 10. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. We find that during the year under consideration, the assessee received rental income of Rs.10,90,584/- from his Singapore flat and duly included in the profit and loss account. However, inadvertently it remained to be included in the return of income. In the course of assessment, the assessing officer brought these facts to the notice of the assessee. The assessee, in turn, vide his letter dated 16.12.2018, has stated before the assessing officer, as follows: "Rent derived from Singapore flat is remained to be offered to tax in the return of income. You are kindly requested to add the same under the head income from house property and due tax will be paid on receipt of demand notice. Since this was not intentional you are requested not to initiate penalty proceedings on the same." Thus, assessee filed revised computation of income, before the assessing officer, showing the rental income under the head "income from house property". The assessee, also stated before the assessing officer to accept revised computation of income by adding the Singapore flat rental income and assessee will make payment of due tax along with interest. Thus, the assessee requested assessing officer that rental income of Rs.10,90,584/- received from Singapore flat may be taxed under the head ‘Income from Page | 6 ITA No.266/RJT/2023 Ranjitsinh Abhaysinh Parmar House property’, as there is no dispute about the nature of income, remained to be included in the return of income. 11. However, we find that the assessing officer has partly accepted the assessee's offer to tax the rental income. That is, assessing officer, made addition of rental income of Rs.10,90,584/-, in the hands of the assessee, however, the following deductions were not allowed to the assessee, namely, (i) standard deduction u/s 24(a) to the tune of Rs.3,27,175/- and (ii) interest on housing loan to the tune of Rs.2,14,211/-, from such rental income of Rs.10,90,584/-. Thus, it is violation of the principles laid down by the Hon’ble Supreme Court in the case of M/s Goetz (India) Ltd (Supra). The assessing officer should not have taxed the amount of Rs.10,90,584/- in his assessment order, and if he had included, then assessee should have been provided the benefit of deductions u/s 24(a) to the tune of Rs.3,27,175/- and interest on housing loan to the tune of Rs.2,14,211/-, from such rental income of Rs.10,90,584/-, however, the assessing officer has failed to do so. Hence, the case law of M/s Goetz (India) Ltd. vs. CIT 284 ITR 323 (SC) cited by the assessing officer has no application to the assessee under consideration, as the assessing officer has accepted the part amount claimed by the assessee, by way of filing fresh computation of total income, before the assessing officer, so what was beneficial to the revenue, has been has accepted by the assessing officer, without being filed, revised income tax return, by the assessee, before the assessing officer, which is not acceptable. 12. Therefore, we note that entire facts relating to rental income of Rs.10,90,584/-, was there before the assessing officer, and assessing officer has partly accepted, the claim of the assessee, without being filed revised return of income, by the assessee, therefore, the following deductions should be allowed to the assessee, namely, (i) standard Page | 7 ITA No.266/RJT/2023 Ranjitsinh Abhaysinh Parmar deduction u/s 24(a) to the tune of Rs.3,27,175/- and (ii) interest on housing loan to the tune of Rs.2,14,211/-, from such rental income of Rs.10,90,584/-. Therefore, we direct the assessing officer to allow the deduction, to the assessee, u/s 24(a) to the tune of Rs.3,27,175/- and interest on housing loan to the tune of Rs.2,14,211/-, from such rental income of Rs.10,90,584/-, after due verification. 13. In the result, the assessee`s appeal is allowed for statistical purposes, in above terms. Order is pronounced in the open court on 07/08/2024 Sd/- Sd/- (DINESH MOHAN SINHA) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Rajkot दनांक/ Date: 07/08/2024 Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr. CIT 5. DR/AR, ITAT, Rajkot 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Rajkot