JAMMU AND KASHMIR PROJECTS CONSTRUCTION CORPORATION LIMITED, SRINAGAR V. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-3, SRINAGAR

ITA 4/ASR/2020

AI Insights

The case involves Jammu & Kashmir Projects Construction Corporation Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals) and the Assistant Commissioner of Income Tax, denying the rectification to allow a claim of Rs.63,72,588 for losses incurred in a brick and tile factory, which was included in a revised return but not acknowledged in the original assessment. The Tribunal dismissed the appeal, agreeing with the lower authorities that the claim for loss was not part of the original return and thus not subject to rectification under section 154 of the Income Tax Act.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 114849 (ITAT-AMRITSAR)
• Duration Of Justice: 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 07-12-2022
• Assessment Year: misc
• Appeal Filed On: 05-02-2022
• Other Referred Cases: Krishnaswamy S. Pd. v. UOI [2006] 281 ITR 305/151 Taxman 286 (SC)
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Reasonable cause; Revised return
• Section: 154; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No.04/Asr/2020 Assessment Year: 2006-07 Jammu & Kashmir Projects Construction Corporation Ltd. Haft Chinar, Srinagar. (J & K) [PAN: AABCJ2455N] (Appellant) Vs. Asstt. Commissioner of Income Tax Circle-3, Rajbagh, Srinagar, (J & K). (Respondent) Appellant by None. (Written Submission) Respondent by Smt. Ratinder Kaur, Sr. DR Date of Hearing 08.12.2022 Date of Pronouncement 20.12.2022 ORDER Per:Anikesh Banerjee, JM: The instant appeal of the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals)-1,Amritsar, [in brevity the CIT(A)] bearing appeal No.29/2011-12, date of order 14.03.2019, order passed u/s 250(6) of the Income Tax Act 1961, [in brevity the Act] for A.Y. 2011-12.The impugned I.T.A. No.04/Asr/2020 Assessment Year: 2006-07 2 order was emanated from the order of the ld. Asstt. Commissioner of Income Tax, Circle-3, Srinagar,(in brevity the AO) order passed u/s 154/250 (6)of the Act, date of order 08.06.2011. 2. The assessee took the following grounds which read as under: “1. On the facts and circumstances, the ld. Commissioner of Appeals was not right in upholding the AO’s action of denying the rectification under section 154 and to allow a claim of Rs.63,72,588/- made by the assessee in the revised return.” 2. Assessee has filed an application for condonation of delay of 199 days wherein, assessee has stated that the aftermath of abrogation of special constitutional status of the erstwhile J & K, resulted huge delay in filing of appeal. We find that the delay in filing the appeal has a reasonable cause. The ld. CIT-DR has not made any strong objection for condonation of delay. Therefore, the delay of 199 days is condoned. 3. Tersely, we advert the fact of the case. The assessee has filed the return of income u/s 139 on dated 01.12.2006 for A.Y.2006-07. Later on, revised return was filed on 17.03.2008 in which the appellant had claimed expenses/loss on account I.T.A. No.04/Asr/2020 Assessment Year: 2006-07 3 of brick and tile factory, the assessment was completed by the ld. AO without taking in cognizance of the revised return &had not allowed the loss of the said business amount of Rs.63,72,588/-. The appellant had filed application u/s 154 of the Act before the AO which was duly rejected by the Authority. The claim of the assessee was that to accept the loss incurred in the factory amount of Rs.63,72,588/- which was claimed in revised return. During process of rectification u/s 154/250(6) of the Act, the ld. AO rejected the claim of the assessee. Being dissatisfied, the assessee filed an appeal before the ld. CIT(A) by challenging the order of rectificationu/s 154/250(6) of ld. AO. The ld. CIT(A) upheld the order of the ld. AO and did not allow the loss adjustment with the total income of the assessee. Being aggrieved, assessee filed an appeal before us. 4. When the appeal was called for hearing, no one appeared on behalf of assessee to represent his case. The assessee filed a letter and requested to dispose of the matter on the basis of the written submission available in the record. we proceed to dispose the appeal ex-parte qua after hearing the learned DR and on the basis of material available on the record I.T.A. No.04/Asr/2020 Assessment Year: 2006-07 4 5. We heard the rival submission and considered the documents available in the record and also considered the order of both the revenue authorities. The ld. Sr. DR first relied on the order of ld. CIT(A) in page no. 3 which is extracted as below: “Decision- As stated in the impugned order, regarding the expense in respect of brick and tile factory the CIT(A) has given his finding and no relief has been granted to the assessee on this issue. Therefore in the light of the order of the CIT(A), no relief was granted to the assessee on this issue. In the statement of facts filed with form 35 that the appellant filed return of income for AY 2006-07 on 1.12.2006. Later on revised return was filed on 7.3.2008 in which the appellant claimed expenses/loss on account of brick and tile factory. The assessment was completed by the AO without taking into cognizance of the revised return and did not allow the loss of said factory. The appellant had then moved application u/s 154 of the act before the AO which was rejected. However, considering that the expense in respect of brick and tile factory had been considered but the CIT(A), Jammu and he has given a finding in his order of not allowing relief to the assessee on this issue, therefore there is no merit in the application u/s 154 of the act and the same is dismissed.” I.T.A. No.04/Asr/2020 Assessment Year: 2006-07 5 6. The assessee had filed a return in original on dated 01.12.2006. The next revised return was on 17.03.2008. The assessment was completed on basis of the original return. The ld. AO had not taken cognizance of the revised return. The assessee did not claim the loss in the original return filed before the revenue. So, the ld. AO is only bound to allow the claim which is claimed in the original return. Accordingly, after the appeal, the ld. AO process the rectification order u/s 154/250(6) of the Act. The claim of deduction under loss is not under the purview of the original return. The said loss is not binding with original return so there is no rectification apparent from the record u/s 154. Section 154 is binding on the mistake which apparent from the record. The assessee was unable to bring any order or direction that the revised was accepted with original return. The power of Section 154 is very limited in this case. Hon'ble Supreme Court in case of Krishnaswamy S. Pd. v. UOI [2006] 281 ITR 305/151 Taxman 286 (SC) held that the maximum 'actus curiae neminemgravabit', is founded upon justice and good sense which serves a safe and certain guide for the administration of law. An unintentional mistake of the authority which may prejudice the cause of any party I.T.A. No.04/Asr/2020 Assessment Year: 2006-07 6 must and alone could be rectified. We find no infirmity in the order of the ld. CIT(A). The ground of appeal of the assessee is accordingly dismissed. 7. In the result, the appeal of the assessee bearing ITA No. 04/Asr/2020 is dismissed. Order pronounced in the open court on 20.12.2022 Sd/- Sd/- (Dr. M. L. Meena) (ANIKESH BANERJEE ) Accountant Member Judicial Member AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By Order