M/s. Subham, Pune V. Income-tax Officer, Ward - 3(4), Pune

ITA 402/PUN/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7580 (ITAT-PUNE)
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 19-09-2019
• Assessment Year: 2015-2016
• Appeal Filed On: 11-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revised return; Set aside
• Section: 143(3); 139(5); 143(1); 139(1); 9(1); 9(1); 9(1); 13

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER . / ITA NO.402/PUN/2019 / ASSESSMENT YEAR : 2015-16 M/S. SHUBHAM, S.NO.121/122, SHOP NO.5, BHOSALE COMPLEX, RAMBAUG COLONY, PAUD ROAD, KOTHRUD, PUNE 411 038. PAN : ABDFS4661H. . / APPELLANT V/S THE INCOME TAX OFFICER, WARD 3(4), PUNE. . / RESPONDENT ASSESSEE BY : SHRI SANKET JOSHI. REVENUE BY : SHRI SANJEEV GHEI. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY ASSESSEE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) 3, PUNE DATED 14 .01.2019 FOR A.Y. 2015-16. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RE CORD ARE AS UNDER :- ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE ENGAGED IN D EALING IN READYMADE GARMENTS AND HOSIERY. ASSESSEE ELECTRONICA LLY FILED ITS / DATE OF HEARING : 19.09.2019 / DATE OF PRONOUNCEMENT: 25.10.2019 2 RETURN OF INCOME ON 30.10.2015 DECLARING TOTAL INCOME OF RS.19,03,485/-. SUBSEQUENTLY ASSESSEE ON 13.02.2016 RE VISED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.5,50,420/-. THE REVISED RETURN WAS PROCESSED U/S 143(1) OF THE ACT. THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY AND CONSEQUENTLY ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER DATED 28.12.2017 AND THE TO TAL INCOME WAS DETERMINED AT RS.19,03,490/-. AGGRIEVED BY THE ORDER OF A O, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DATED 14.01.2019 (IN APPEAL NO.PN/CIT(A)-3/WD 3(4), PN/308/2017-18) DISMISSED T HE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT (A), ASSESSEE IS NOW IN APPEAL AND HAS RAISED THE FOLLOWING GROUNDS : 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTI ON OF THE A.O. IN REJECTING THE TOTAL INCOME OF RS.5,50,4201- DECLARE D BY THE ASSESSEE AS PER THE REVISED RETURN FILED U/S 139(5) AND ASSESSI NG HE TOTAL INCOME AT RS.19,03,485/- AS PER THE ORIGINAL RETURN FILED U/S 139(1) WITHOUT APPRECIATING THAT THE SAID ACTION WAS NOT JUSTIFIED ON FACTS AND IN LAW 2. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE ASS ESSEE HAD FAILED TO SUBSTANTIATE THE MISTAKE COMMITTED BY IT WHILE FILI NG THE ORIGINAL RETURN WHICH RESULTED INTO EXCESS-DECLARATION OF TOTAL INCOME AND THEREBY HOLDING THAT THE REVISED RETURN DULY FILED U/S 139(5) SUBSEQUENTLY DECLARING LOWER INCOME WAS ONLY AN AFTERTHOUGHT AND HENCE, THE A.O. WAS JUSTIFIED IN A SSESSING THE TOTAL INCOME AS PER THE ORIGINAL RETURN BY COMPLETELY IGN ORING THE REVISED RETURN FILED U/S 139(5) OF THE ACT. 3. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE TOTAL INCOME WAS WRONGLY DECLARED AT A HIGHER FIGURE IN THE ORIGINAL RETURN AND SUBSEQUENTLY, HE REVISED RETURN WAS FILED DECLARING CORRECT INCOME WITHIN THE TIME LIMIT PRESCRIBED U/S 139(5) A ND ON VERIFICATION OF RECORDS IN THE COURSE OF ASST. PROCEEDINGS, EVEN TH E A.O. COULD NOT FIND A SINGLE DEFECT IN THE BOOKS OF ACCOUNTS P RODUCED BY THE ASSESSEE IN SUPPORT OF THE REVISED INCOME AND THERE FORE, THE ADDITION MADE SOLELY ON THE BASIS OF THE TOTAL INCOME DECLAR ED IN THE ORIGINAL RETURN FILED U/S 139(1) WAS NOT WARRANTED ON FACTS AND IN LAW. 4. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THA T IN THE ABSENCE OF ANY INDEPENDENT EVIDENCE BROUGHT ON RECORD BY THE A .O. TO DEMONSTRATE AS O HOW THE TOTAL INCOME DECLARED BY T HE ASSESSEE AS PER THE REVISED RETURN WAS NOT CORRECT, THE A.O. COULD NOT HAVE REJECTED THE REVISED INCOME SOLELY ON THE BASIS OF THE EARLIER ORIGINAL RETURN FILED BY THE ASSESSEE U/S 139(1) WHICH WAS S UBSEQUENTLY REVISED BY THE ASSESSEE U/S 139(5) AND THUS, THE AC TION OF THE A.O. WAS NOT JUSTIFIED IN LAW. 3 3. ALL THE GROUNDS BEING INTER-CONNECTED ARE CONSIDERED TOGETHE R. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AO NOTIC ED THAT ASSESSEE HAD REVISED THE ORIGINAL RETURN OF INCOME BY REV ISING THE TOTAL INCOME DECLARING THEREIN. THE REASON FOR REVISING THE RETUR N OF INCOME WAS STATED TO BE CONSIDERING THE WRONG FIGURE OF SALES FOR COMPUTING OF BUSINESS PROFIT. THE ASSESSEE WAS ASKED TO SUBSTANTIATE THE REVISED SALES FIGURE, TO WHICH THE ASSESSEE SUBMITTED THE DETAILS A ND ALSO PRODUCED SALES BILLS OF ONE MONTH FOR RANDOM CHECKING. AS SESSEE ALSO FILED THE REVISED SERVICE TAX RETURN FILED BY IT WITH THE APP ROPRIATE AUTHORITIES. THE SUBMISSIONS OF THE ASSESSEE WERE NOT FO UND ACCEPTABLE TO THE AO. AO WAS OF THE VIEW THAT ASSESSEE COULD NOT JUSTIFY THE REVISED RETURN BY ADOPTING REVISED SALES. HE THEREFORE REJECTED THE SALES FIGURE DISCLOSED BY THE ASSESSEE IN THE REVISED RETURN OF INCOME AND CONSIDERING THE RETURN OF INCOME ORIG INALLY FILED, DETERMINED THE TOTAL TAXABLE INCOME AT RS.19,03,490/-. AG GRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE L D.CIT(A), WHO UPHELD THE ORDER OF AO. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL. 5. BEFORE ME, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFORE AO AND LD.CIT(A) AND FURTHER SUBMITTED THAT IN THE ORIGINAL RET URN OF INCOME THE QUANTUM OF SALES WAS INADVERTENTLY CONSIDERED AT OVERSTATED FIGURE. SUBSEQUENTLY, IT CAME TO NOTICE OF THE ASSESSEE THE MISTAKE OF OVERSTATED SALES AND ASSESSEE THEREAFTER ON THE BASIS OF CORRECT QUANTUM OF SALES, FILED REVISED RETURN OF INCOME U/S 139(5) OF THE ACT ON 13.02.2016 WHEREIN THE TOTAL INCOME WAS REVIS ED AT 4 RS.5,50,420/-. HE SUBMITTED THAT THE REVISED RETURN WAS ALSO PROCESSED U/S 143(1) OF THE ACT AND THE SAME IS MENTION ED IN THE ASSESSMENT ORDER. HE SUBMITTED THAT BEFORE THE LOWER A UTHORITIES ASSESSEE HAD EXPLAINED ABOUT THE NECESSITY FOR REVISING T HE RETURN OF INCOME. HE FURTHER SUBMITTED THAT TO SUBSTANTIATE THE A CTUAL QUANTUM OF SALES, ASSESSEE HAD PRODUCED THE ENTIRE RECO RD ALONG WITH SALES BILLS BEFORE THE AO. THE AO AFTER HAVING SATISFIED HERS ELF ON THE BASIS OF VERIFICATION MADE ON TEST CHECK BASIS, DID NOT ASK THE ASSESSEE TO SUBSTANTIATE SALES DECLARED BY THE ASSESSEE IN THE R EVISED RETURN OF INCOME U/S 139(5) OF THE ACT. HE SUBMITTED THAT THERE IS NO MATERIAL BEFORE THE DEPARTMENT TO DEMONSTRATE THAT THE SALES D ECLARED BY THE ASSESSEE IN THE REVISED RETURN U/S 139(5) OF THE ACT IS N OT CORRECT. HE SUBMITTED THAT ONCE A VALID RETURN U/S 139(5) OF THE ACT IS FILED BY THE ASSESSEE THEN THE ORIGINAL RETURN U/S 139(1) OF THE ACT IS SUBSTITUTED BY THE REVISED RETURN AND THE ORIGINAL RETURN FILED U/S 13 9(1) OF THE ACT GETS OBLITERATED FOR ALL THE PURPOSES UNDER THE ACT. I N SUCH A SITUATION, THE AO CANNOT CONSIDER THE ORIGINAL RETURN OF IN COME DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR DETERMINING THE TOTAL INCOME OF THE ASSESSEE. IN SUPPORT OF HIS CONTENTION THAT WHEN VALID RETURN IS FILED U/S 139(5) OF THE ACT, THE ORIGINAL RETURN U/S 139(1) OF THE ACT CANNOT BE TAKEN INTO ACCOUNT FOR MAKING THE ASSESSMENT , HE RELIED ON THE FOLLOWING DECISIONS : A) CIT VS. MANGALORE CHEMICALS & FERTILIZERS LTD. [191 ITR 156 (KAR)] B) CCIT VS. MACHINE TOOL CORPORATION OF INDIA LTD. [201 ITR 10 1 (KAR)]. C) BECO ENGINEERING CO. LTD VS. CIT [148 ITR 478 (P&H)] D) CIT VS. ARUN TEXTILE [192 ITR 700 (GUJ)]. 5 HE THEREFORE SUBMITTED THAT THE ASSESSMENT OF TOTAL INCO ME BY THE AO BY REJECTING THE REVISED RETURN U/S 139(5) OF THE ACT WAS CONTRARY TO LAW. HE THEREFORE PRAYED THAT THE TOTAL INCOME OF RS.5,50 ,520/- DECLARED BY THE ASSESSEE IN THE REVISED RETURN OF INCOME BE CONSIDERED. LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF AO AND LD.CIT(A). 6. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RESPECT TO REJECTING THE REVISED RETURN FILED BY THE ASSESSEE AND THE ACT OF AO IN PROCEEDING TO FRAME THE ASSESSMENT ON THE BASIS OF THE ORIGINAL RETURN OF INCOME. IT IS AN UNDISPUTED FACT THAT ASSESSEE HAD FILED ORIGINAL RETUR N OF INCOME U/S 139(1) OF THE ACT FOR A.Y. 2015-16 ON 30.10.2015 BY D ECLARING TOTAL INCOME AT RS.19,03,485/-. SUBSEQUENTLY, ASSESSEE FILE D REVISED RETURN OF INCOME U/S 139(5) OF THE ACT ON 13.02.2016 WHE REIN THE TOTAL INCOME WAS REVISED AT RS.5,50,420/-. THE LAST DATE T O FILE THE REVISED RETURN U/S 139(5) OF THE ACT FOR A.Y. 2015-16 WAS 31.03.2016. IT IS ALSO A FACT THAT THE REVISED RETURN OF INCOME FILED BY THE ASSESSEE WAS WITHIN THE PRESCRIBED TIME LIMIT PRESCRIBED UNDER THE A CT. IT IS ALSO A FACT THAT THE REVISED RETURN WAS DULY PROCESSE D U/S 143(1) OF THE ACT. I FIND THAT HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANGALORE CHEMICALS AND FERTILIZERS REPORTED IN [191 ITR 156 (KAR)] HAS HELD THAT ONCE THE ORIGINAL RETURN IS WITHDRAW N OR IS SUBSTITUTED BY FILING A VALID RETURN, THE ONLY CONSEQUENCE IS THAT THE EARLIER RETURN IS EFFACED OR OBLITERATED FOR ALL PURPOSES UNDER THE ACT . I FURTHER FIND THAT HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. ARUN TEXTILE [192 ITR 700 (GUJ)] HAS HELD THAT ONCE THE REVISED RETURN IS FILED U/S 139(5) OF THE ACT, THE ORIGINAL RETURN IS SUBSTIT UTED BY THE 6 REVISED RETURN AND IT IS NOT OPEN TO THE AO TO ADVERT TO THE ORIGINAL RETURN OF INCOME OR THE STATEMENT FILED ALONG WITH IT. I FURT HER FIND THAT HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF B ECO ENGINEERING CO., LTD., VS. CIT REPORTED IN [148 ITR 478] HAS HELD THAT IN A CASE ASSESSEE FILES THE REVISED RETURN THEN IT IS TO BE TAKEN INTO CONSIDERATION FOR THE PURPOSE OF MAKING AN ASSESSMENT A ND THE ORIGINAL RETURN CANNOT BE ADVERTED. BEFORE ME, REVENUE HAS NOT POINTED TO ANY CONTRARY BINDING DECISION IN ITS SUPPORT NO R POINTED AS TO WHY THE RATIO OF DECISIONS RELIED UPON BY ASSESSEE AND REFERRED TO HEREINABOVE ARE NOT APPLICABLE TO THE CASE OF ASSESSEE. I THEREFORE FOLLOWING THE AFORESAID DECISIONS OF VARIOUS HIGH COURTS CITED HEREINABOVE HOLD THAT ONCE THE REVISED RETURN HAS BEEN FILED BY THE ASSESSEE U/S 139(5) OF THE ACT AND THE SAME HAS BEEN ACCEPTED, THE N IT IS NOT OPEN TO THE AUTHORITIES TO TAKE INTO CONSIDERATIO N THE ORIGINAL RETURN OF INCOME FOR DETERMINING THE TOTAL INCOME IN THE AS SESSMENT PROCEEDINGS. I THEREFORE SET ASIDE THE ORDER OF AO AND DIRECT THE AO TO CONSIDER THE TOTAL INCOME DECLARED BY THE ASSESSEE U/S 139(5) OF THE ACT FOR DETERMINING THE TOTAL INCOME. THUS, THE GROUNDS OF THE ASSESSEE ARE ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON 25 TH DAY OF OCTOBER, 2019. SD /- ( ANIL CHATURVEDI ) ' / ACCOUNTANT MEMBER PUNE; DATED : 25 TH OCTOBER, 2019. YAMINI 7 #$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-3, PUNE. PR. CIT-2, PUNE. '#$ %%&',) &', *+ / DR, ITAT, SMC PUNE; $-.// GUARD FILE. / BY ORDER // TRUE COPY // 012%3&4 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.