M/s. Nark Alloys Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 4082/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65393 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 22-08-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 08-09-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R S NEGI SENIOR
• Assessee Lawyers: P N CHAWLA
• Keywords: Business income; Revised return
• Section: 28; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) SHRI U.B.S. BEDI, JUDICIAL MEMBER AND BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.4082/DEL./2011 (ASSESSMENT YEAR : 2008-09) M/S. NARK ALLOYS PVT. LTD., VS. ITO, COMPANY WARD 13(1), Y 161, LOHA MANDI, NARAINA, NEW DELHI NEW DELHI 110 028. (PAN : AACCN1383Q) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P.N. CHAWLA, ADVOCATE REVENUE BY : SHRI R.S. NEGI, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE CIT (APPEALS)-XVI, NEW DELHI DATED 18.05.2011 FOR T HE ASSESSMENT YEAR 2008-09. 2. THE ASSESSEE IS A PRIVATE LIMITED COMPANY. AS P ER ASSESSEES CLAIM, THE RETURN OF INCOME WAS FILED ON 27.09.2008 . AS PER THE ASSESSEE, THE RETURN INCOME WAS RS.9,26,082/-, WHIC H WAS A TOTAL OF RS.9,20,731/- NET PROFIT AS PER PROFIT AND LOSS ACC OUNT AND AN ADDITION OF RS.5,451/- FOR DONATIONS. THE RETURN WAS PROCESSED . THE ASSESSEE MADE ITA NO.4082/DEL./2011 2 AN APPLICATION U/S 154 OF THE INCOME-TAX ACT, 1961 AND AS PER THIS APPLICATION U/S 154, THE ASSESSEE HAS REQUESTED TO RECTIFY THE MISTAKE OCCURRED IN THE INTIMATION. THE ASSESSING OFFICER DID NOT ALLOW THIS RECTIFICATION. THE ASSESSEE CLAIMS THAT DUE TO MI STAKE, THE AMOUNT OF RS.9,26,082/- WAS ENTERED INTO THE COLUMN OF SPECUL ATION BUSINESS. THE TOTAL INCOME WORKED OUT BY THE COMPUTER DOUBLED DUE TO THIS REASON. IT IS CLAIMED THAT ASSESSEE NEVER INDULGED IN SPECULAT ION BUSINESS IN PAST AND FUTURE. THE CIT (A) CONFIRMED THE REJECTION OF APPLICATION U/S 154 BY ASSESSING OFFICER BY HOLDING THAT THE CORRECT CO URSE OF ACTION FOR THE ASSESSEE WAS TO FILE A REVISED RETURN GIVING REASON S FOR THE SAME. 3. NOW, THE ASSESSEE IS IN APPEAL BEFORE US BY TAKI NG THE FOLLOWING GROUNDS :- 1. THAT THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX APPEAL XVI, NEW DELHI IS CONTRARY TO THE LAW & FACTS ON RECORD. 2. THAT THE LEARNED INCOME TAX OFFICER HAS WRONGLY REJECTED APPEAL OF THE ASSESSEE FILED U/S 154. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX APPEAL WAS OF THE VIEW THAT THE TOTAL INCOME SHOWN BY THE ASSESSEE AS PER BALANCE SHEET AND P&L A/C WAS RS.9,20,731/- IN WHICH A SUM OF RS.5,351/- WAS ADDE D ON ACCOUNT OF DONATION. THE TOTAL OF THESE FIGURES COM ES TO RS.9,26,082/-. DUE TO CLERICAL ERROR THE CLERK INST EAD OF TOTALING THE AMOUNT, SHOWED THIS INCOME AS SPECULAT ION INCOME WHICH MOUNTED TO DOUBLE INCOME OF THE ASSESS EE AND WAS NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE. ITA NO.4082/DEL./2011 3 4. THAT IN THE AUDITED BALANCE SHEET AND P&L A/C TH ERE IS NO MENTION OF ANY SPECULATION BUSINESS, NEITHER THIS NOTE APPEARS IN P&L A/C NOR IN THE BALANCE SHEET AND THU S THE LEARNED CIT APPEAL WAS NOT JUSTIFIED IN REJECTING T HE APPEAL OF THE ASSESSEE FILED AGAINST ORDER U/S 154. 5. THAT THE LEARNED CIT APPEAL HAS REJECTED THE APP EAL ONLY ON TECHNICAL GROUNDS THAT THE ASSESSEE SHOULD HAVE FILED A REVISED RETURN WITHIN THE STATUTORY PERIOD BUT AS A MISTAKE WAS DETECTED ON THE RECEIPT OF ORDER U/S 14 3(1) THE SAME COULD NOT BE RECTIFIED AND THUS THE REJECTION OF APPEAL BY THE CIT APPEAL IS AGAINST THE FACTS OF THE CASE AND IS ILLEGAL. 6. THAT THE MISTAKE WAS COMMITTED BY THE CLERK OF T HE ADVOCATE WHO FILED THE RETURN AND NOT BY THE ASSESS EE AND AS SUCH THE REJECTION OF THE APPEAL IS HIGHLY ARBIT RARY ON THIS AND IS AGAINST THE FACTS OF THE CASE. 4. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. LD. AR ALSO FILED AN AFFIDAVIT. THE CONTENTS OF THE AFFIDAVIT READ AS U NDER :- I, P.N. CHAWLA S/O LATE SH. D.C. CHAWLA R/O S-197, GREATER KAILASH-II, NEW DELHI-110048, DO HEREBY SOLEMNLY AF FIRM AND DECLARE AS UNDER :- 1. THAT I WAS APPOINTED AS ADVOCATE BY NARK ALLOYS PVT. LTD. TO FILE THEIR RETURN OF INCOME FOR THE A.Y. 2008-2009. 2. THAT THE DEPONENT FILED THE RETURN OF NARK ALLOY S PVT. LTD. ELECTRONICALLY FOR WHICH THE PERSON HAVING KNOWLEDG E OF COMPUTER WAS ENGAGE FROM OUTSIDE. 3. THAT HE PREPARED THE ITR AND FILLED ALL THE RELE VANT DETAILS IN THE RETURN. WHILE FILLING ALL THE COLUMNS IN THE RETURN HE INADVERTENTLY MADE A MISTAKE. THE INCOME OF THE ASSESSEE WAS AS UNDER: PROFIT AS PER P&L A/C 920731.00 ADD: DONATION 5351.00 ------------- TOTAL 926082.00 ITA NO.4082/DEL./2011 4 ------------- 4. THAT WHILE FILING THE RETURN AT PAGE 13 OF ITR, COPY ENCLOSED, HE FILLED THE RETURN AS UNDER: PAGE 13 RS. S.NO. 36 NET PROFIT OR LOSS FROM BUSINESS OR PROFES SION 36 920731.00 S.NO. 37 NET PROFIT AFTER APPLYING RULE 7A, 78, 7C A-37 920731.00 B COMPUTATION OF INCOME S.NO. 38 NET PROFIT OR LOSS FROM SPECULATION BUSINE SS 920731.00 S.NO. 39 ADD ITEM IN ACCORDANCE WITH SECTION 28 TO 49A 5251.00 S.NO. 40 DEDUCTIONS IN ACCORDANCE WITH SECTION 28 T O 44DA NIL S.NO. 41 PROFIT OR LOSS FROM SPECULATION BUSINESS 926082.00 ------------- C TOTAL INCOME CHARGEABLE UNDER THE HEAD PROFIT OR GAIN 1846813.00 5. THAT IN THE RETURN SPECULATION BUSINESS HAVE BEE N SHOW AT RS.920731/- WHICH ACTUALLY IS FROM INCOME FROM BUSI NESS AS PER P&L A/C WAS ALSO RS.920731/- ACTUALLY THE BUSINESS INCOME H AS BEEN TAKEN TWICE DUE TO A CLERICAL ERROR AS THE ASSESSEE HAS NEVER I NDULGED IN SPECULATION BUSINESS. THE INCOME FROM SPECULATION IS IN FACT IS INCOME FROM BUSINESS. 6. THAT THE ASSESSEE HAS NEVER INDULGED IN SPECULAT ION BUSINESS FROM THE INCEPTION OF THE COMPANY. THE DETAILS OF INCOME -OF THE PROVISIONS TWO YEARS AND LATER TWO YEARS ARE AS UNDER: A.Y.2006-2007 INCOME FROM P&L A/C RS. 408133.00 A.Y.2007-2008 -DO- RS. 589847.00 A.Y.2009-2010 -DO- RS. 988865.00 A.Y.2010-2011 -DO- RS.1191399.00 A PHOTO STATE COPY OF ITRS FOR THE ABOVE YEARS ALON G WITH COPY OF STATEMENT OF INCOME IS ENCLOSED IN ORDER SHOW THAT NONE OF THE YEARS, THE ASSESSEE HAS ANY SPECULATED BUSINESS. 7. THAT THE MISTAKE OF FILING THE RETURN OCCURRED I N MY OFFICE AS I HAD OUTSOURCED A PERSON TO FILE THE RETURN ELECTRONICAL LY AND THERE IS NO FAULT OF THE ASSESSEE. I MAY FURTHER STATE HERE THAT I HAVE NO COMPUTER KNOWLEDGE AND MY STENO DID NOT KNOW THE TECHNIC OF FILING THE ITR. DUE TO THIS REASON I HAD OUTSOURCED THE FILING THE RETURN. 8. THAT THE LD. ITO BE DIRECTED TO RECTIFY THE ORDE R U/S 154. ITA NO.4082/DEL./2011 5 WE HAVE HEARD BOTH THE SIDE OF ASSESSEE. THE CIT (A PPEALS) HAS MENTIONED IN HER ORDER THAT A CORRECT COURSE OF ACT ION FOR THE APPELLANT WAS TO HAVE FILED A REVISED RETURN, GIVING REASONS FOR THE SAME. SINCE THE MISTAKE WAS NOT APPARENT FROM THE RECORD AVAILABLE WITH THE ASSESSING OFFICER THEREFORE, THE ASSESSING OFFICER HAS NO JUR ISDICTION TO MAKE RECTIFICATION. IN OUR CONSIDERED VIEW ALSO THE ASSE SSING OFFICER WAS NOT HAVING JURISDICTION TO MAKE ANY RECTIFICATION AS PR AYED BY APPELLANT. BEFORE US THE LD. AR HAS FILED AN AFFIDAVIT AS MENT IONED IN PARA 4 OF THIS ORDER. COPY OF INCOME TAX RETURNS ARE ALSO FILED FO R TWO PRECEDING AND TWO SUCCEEDING ASSESSMENT YEARS. IN THESE ASSESSMEN T YEARS NO INCOME HAVE BEEN DECLARED FROM SPECULATIVE BUSINESS. THE P ATTERN OF TAX PAID DURING THE YEAR ALSO SUGGEST THAT ASSESSEE HAD NO I NCOME FROM SPECULATIVE BUSINESS. KEEPING IN VIEW THE PLEADINGS OF THE APPELLANT AND RECORDS FILED BEFORE US, THE MISTAKE APPEARS TO BE BONA FIDE. IN VIEW OF THESE PECULIAR FACTS AND CIRCUMSTANCES WE FIND IT A PPROPRIATE TO STATE THAT THE ASSESSEE SHOULD SEEK APPROPRIATE ALTERNATE REME DIAL ACTION AS AVAILABLE UNDER SECTION 264 OF THE ACT FOR REVISION OF THE ORDER MADE U/S 143(1) OF THE INCOME TAX ACT. IN OUR CONSIDERED VIE W THE ASSESSEE COULD SEEK IF SO ADVISED, REVISION OF THE ORDERS U/S 143( 1) BY MAKING AN APPLICATION FOR REVISION WITH APPROPRIATE APPLICATI ON FOR CONDONATION OF ITA NO.4082/DEL./2011 6 DELAY WHICH COULD SATISFY THE CIT THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM MAKING THE APPLICATION WITHIN THE PERMITTED PERIOD. SUBJECT TO THE ABOVE OBSERVATION WE ARE NOT ABLE TO AGREE WITH THE GROUNDS OF APPEAL OF THE ASSESSEE. THE DISMISSAL OF THE ASSESSEES APPEAL SHALL NOT CAUSE ANY PREJUDICE TO THE APPLICATION IF MADE FOR REVISION U/S 264 OF THE ACT. IN THE RESULT APPEAL OF THE ASSESSEE STAND DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON THIS 31 ST DAY OF AUGUST, 2012. SD/- SD/- (U.B.S. BEDI) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 31 ST DAY OF AUGUST, 2012 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XVI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.