A K & I ADVERTISING P. LTD, MUMBAI V. ITO 12(1)(1), MUMBAI

ITA 3080/MUM/2017

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 4708 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 28-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K BEPARI
• Keywords: Set aside
• Section: 143(3); 142(1); 40(a)(ia); 201; 143(2); 139(1); 139(4); 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE S/ SHRI B.R. BASKARAN (AM) & SANDEEP GOSAIN (JM) I.T.A. NO. 3080 /MUM/20 1 7 (ASSESSMENT YEAR 20 0 9 - 1 0 ) A.K. & I ADVERTISING P. LTD. C/O. BHARAT KANABAR & CO. PLOT NO. 41, OFFICE 4 PARAVATI SA DAN, TILAK ROAD GHATKOPAR (EAST) MUMBAI - 400 077. PAN : AABCA3852G VS. ITO 12(1)(1) MUMBAI ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI BHARAT KANABAR DEPARTMENT BY SHRI S.K. BEPARI DATE OF HEARING 1 9 . 1 1 . 201 8 DATE OF PRONOUNCEMENT 30 . 1 1 . 20 1 8 O R D E R PER B.R. BASKARAN (AM) : - THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 02 - 01 - 2017 PASSED BY LD CIT(A) - 20, MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2009 - 10. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) I N CONFIRMING THE ORDER OF THE AO IN IGNORING THE LOSS DECLARED BY THE ASSESSEE AND ALSO IN REFUSING TO GRANT REFUND TO THE ASSESSEE. 2. THE ASSESSEE COMPANY IS CARRYING ON ADVERTISEMENT AGENCY BUSINESS. IT E - FILED ITS RETURN OF INCOME FOR THE YEAR UN DER CONSIDERATION ON 01 - 04 - 2011, I.E., BEYOND THE DUE DATE PRESCRIBED U/S 139(1) AS WELL AS 139(4) OF THE ACT. IT DECLARED LOSS OF RS.7.15 LAKHS IN THE RETURN OF INCOME AND ALSO CLAIMED REFUND OF RS.22.73 LAKHS. SINCE THE RETURN OF INCOME WAS FILED BELAT EDLY BEYOND THE TIME LIMIT PRESCRIBED U/S 139(4) FOR FILING BELATED RETURN, THE AO COULD NOT PROCESS THE SAME. A.K. & I ADVERTISING P. LTD. 2 3. HENCE THE AO ISSUED NOTICE U/S 148 OF THE ACT ON 07 - 05 - 2013 AND IN RESPONSE THERETO, THE ASSESSEE FILED A LETTER ON 23.07.2013 TO TREAT TH E RETURN OF INCOME FILED ON 01 - 04 - 2011 AS THE RETURN OF INCOME FILED IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT. THE AO ACCEPTED THE SAME AND ACCCORDINGLY ISSUED NOTICES U/S 143(2) AS WELL AS U/S 142(1) OF THE ACT. IN THE SCRUTINY PROCEEDINGS, THE AO D ISALLOWED 10% OF EXPENSES CLAIMED BY THE ASSESSEE AND ALSO MADE DISALLOWANCE U/S 40(A)(IA) OF THE ACT. BOTH THE DISALLOWANCES AGGREGATED TO RS.4,15,119/ - . 4. THE AO ALSO TOOK THE STAND THAT THE LOSS OF RS.7.15 LAKHS DECLARED BY THE ASSESSEE SHOULD BE IGNORED SINCE THE RETURN OF INCOME WAS NOT FILED WITHIN THE PRESCRIBED TIME LIMITS. HE ALSO TOOK THE VIEW THAT THE REFUND CLAIM OF RS.22.73 LAKHS IS INVALID AS THE RETURN OF INCOME WAS NOT FILED WITHIN DUE DATES. 5. THE LD CIT(A) ALSO TOOK THE VIEW T HAT, AS PER CBDT CIRCULAR NO.670 DATED 26.10.1993, ONLY BOARD HAS POWER TO GRANT REFUND BY CONDONING THE DELAY IN MAKING THE CLAIM, IN CASES WHERE THE REFUND CLAIM EXCEED RS.1.00 LAKH. ACCORDINGLY HE CONFIRMED THE ORDER PASSED BY THE AO. 6. WE HEARD THE PARTIES AND PERUSED THE RECORD. IT IS A FACT THAT THE RETURN OF INCOME HAS BEEN FILED BY THE ASSESSEE BEYOND THE TIME LIMIT PRESCRIBED U/S 139(4) OF THE ACT FOR FILING BELATED RETURN OF INCOME. THE PLEA OF THE ASSESSEE WAS THAT IT COULD NOT FILE RETU RN ON 31.3.2011, I.E., THE LAST DATE OF TIME LIMIT DUE TO TECHNICAL GLITCHES IN THE INCOME TAX SITE AND HENCE IT WAS CONSTRAINED TO UPLOAD ITS RETURN OF INCOME ONLY ON NEXT DAY, I.E., 1.4.2011. IN OUR VIEW, THIS MAY A GOOD GROUND FOR REPRESENTING THE MATT ER BEFORE THE TAX AUTHORITIES FOR CONDONING THE DELAY. 7. WE NOTICE THAT THE FACTS AVAILABLE IN THIS CASE ARE DIFFERENT. WE NOTICE THAT THE RETURN OF INCOME FILED BY THE ASSESSEE BELATEDLY HAS BEEN REGULARISED BY THE AO BY ISSUING NOTICE U/S 148 OF T HE ACT. ONCE THE RETURN OF INCOME HAS BEEN FILED BY THE ASSESSEE IN RESPONSE TO THE NOTICE ISSUED U/S 148 OF THE ACT, THEN, AS PER THE PROVISIONS OF SEC.148, ALL THE PROVISIONS OF THE ACT SHALL, SO FAR A.K. & I ADVERTISING P. LTD. 3 AS MAY BE APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139 OF THE ACT. HENCE, IN THE INSTANT CASE, THE PROVISIONS OF SEC. 139 SHALL APPLY TO THE RETURN OF INCOME FILED BY THE ASSESSEE IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT. 8. THE IMPUGNED ASSESSMENT ORD ER HAS BEEN PASSED BY THE AO U/S 143(3) OF THE ACT BY ACTING UPON THE RETURN OF INCOME FILED BY THE ASSESSEE IN RESPONSE TO THE NOTICE ISSUED U/S 148 OF THE ACT. HENCE, THE AO HAS TO FOLLOW THE MANDATE PRESCRIBED IN SEC. 143(3) OF THE ACT. 9. WE NOT ICE THAT THE AO HAS REJECTED THE LOSS RETURNED BY THE ASSESSEE. HOWEVER, AS RIGHTLY POINTED OUT BY LD A.R, THE PROVISIONS OF SEC.80 PROHIBITS ONLY CARRY FORWARD OF LOSS, MEANING THEREBY, THERE IS NO PROVISION UNDER THE ACT TO IGNORE THE LOSS RETURNED BY T HE ASSESSEE, EVEN IF THE RETURN OF INCOME IS FILED BELATEDLY. THE AO HAS ALSO NOT CITED ANY PROVISIONS OF THE ACT, UNDER WHICH THE REFUND CLAIM OF THE ASSESSEE CAN BE REJECTED. 10. IN VIEW OF THE ABOVE, WE ARE OF THE OPINION THAT THE LD CIT(A) WAS NOT RIGHT IN LAW IN REJECTING THE APPEAL OF THE ASSESSEE BY CONSIDERING ONLY THE PROVISIONS OF SEC. 139(4) OF THE ACT AND BY DISREGARDING THE FACT THAT THE APPEAL BEFORE HIM WAS THE APPEAL AGAINST THE ASSESSMENT ORDER PASSED ON THE RETURN OF INCOME FILED IN R ESPONSE TO THE NOTICE ISSUED U/S 148 OF THE ACT. 11. IN VIEW OF THE FOREGOING, WE SET ASIDE THE ORDER PASSED BY LD CIT(A) AND RESTORE ALL THE ISSUES TO THE FILE OF THE AO WITH THE DIRECTION TO TAKE INTO CONSIDERATION THE LOSS DECLARED BY THE ASSESSEE AND ALSO GRANT REFUND TO THE ASSESSEE IN ACCORDANCE WITH THE LAW, SINCE THE ASSESSMENT ORDER HAS BEEN PASSED AGAINST THE VALID RETURN OF INCOME FILED IN RESPONSE TO THE NOTICE ISSUED U/S 148 OF THE ACT. A.K. & I ADVERTISING P. LTD. 4 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER HAS BE E N PRONOUNCED IN THE COURT ON 30 . 1 1 .201 8 . SD/ - SD/ - (SANDEEP GOSAIN ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 30 / 1 1 / 20 1 8 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( SENIOR PRIVATE SECRETARY ) PS ITAT, MUMBAI