Kunj Forging Private Ltd., Ghaziabad V. DCIT, Circle-1, Ghaziabad

ITA 4103/DEL/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9352 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 21-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS NAINA SOIN KAPIL
• Keywords: Depreciation; Opportunity of being heard; Principle of natural justice; Revised return
• Section: 271(1)(c); 143(3); 234B; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER I.T.A. NO. 4103/DEL/2017 ASSESSMENT YEAR: 2012-13 KUNJ FORGING PRIVATE LTD. VS. DCIT, CIRCLE-1 C-177, BSR ROAD, INDL. AREA, GHAZIABAD GHAZIABAD UTTAR PRADESH-201001 (PAN: AACCK3307R) (ASSESSEE) (RESPONDENT) ASSESSEE BY : MS. RAGINI HANDA, CA REVENUE BY : MRS. NAINA SOIN KAPIL, SR. DR. ORDER PER H.S. SIDHU, JM THIS APPEAL IS FILED BY ASSESSEE AGAINST THE ORDER PASSED BY THE LD. CIT(A), GHAZIABAD RELATING TO ASSESSMENT YEAR 2012-13 ON THE FOLLOWING GROUNDS:- 1. THE ORDER DATED 31.3.2017 PASSED BY THE LD. CIT(A) U/S. 250 OF THE I.T. ACT, 1961 IS BAD IN LAW AND ON FACT S. 1.1 THE ORDER OF THE LD. CIT(A) DETERMINING THE INCOME OF THE APPELLANT AT RS. 1,96,83,720/- AS AGAINST THE R EVISED INCOME OF RS. 33,99,080/- FILED BY THE APPELLANT DU RING THE COURSE OF ASSESSMENT PROCEEDINGS IS BAD IN LAW AND ON FACTS. 2 2. THAT THE LD. CIT(A) WHILE SUSTAINING THE CONTENTION OF THE AO HAS ERRED IN IGNORING THE DETAILED SUBMISSIO NS FILED BY THE APPELLANT DURING THE COURSE OF ASSESSM ENT PROCEEDINGS IN SUPPORT OF THEIR CONTENTION. (II) THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN SUST AINING THE CONTENTION OF THE AO WITHOUT GIVING ANY MEANIN GFUL OPPORTUNITY OF BEING HEARD TO THE APPELLANT. 3. THE LD. CIT(A) WHILE SUSTAINING THE CONTENTION OF T HE AO HAS ERRED IN IGNORING THE FACT THAT A REVISED COMPU TATION OF INCOME WAS FILED BY THE APPELLANT BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. (II) THE LD. CIT(A) HAS ERRED IN ACCEPTING THE CONT ENTION OF THE AO THAT THE CLAIM OF THE APPELLANT COULD HAV E ONLY BE MADE BY WAY OF FILING A REVISED RETURN AND THE TAXABLE INCOME COULD NOT BE REDUCED BY WAY OF FILI NG A REVISED COMPUTATION DURING THE COURSE OF ASSESSMEN T PROCEEDINGS. 4. THE LD. CIT(A) HAS FURTHER ERRED IN IGNORING THE FA CT THAT THE AO HAS VIOLATED THE SETTLED PRINCIPLES OF NATU RAL JUSTICE BY NOT ISSUING ANY SPECIFIC NOTICE TO THE A PPELLANT BEFORE REJECTING THE REVISED COMPUTATION OF INCOME FILED BY THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 3 5. THAT ON THE FACTS AND IN LAW, THE AO HAS ERRED IN CHARGING INTEREST U/S. 234B & 234C OF THE ACT. 6. THE PENALTY PROCEEDING INITIATED U/S. 271(1)(C) OF THE ACT IS LEGALLY INCORRECT AND NEEDS TO BE DROPPED. 7. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR MODIFY ANY GROUND BEFORE OR AT THE TIMED OF HEARING OF THE APP EAL. 2. FACTS NARRATED BY THE REVENUE AUTHORITIES ARE N OT DISPUTED BY BOTH THE PARTIES, HENCE, THE SAME ARE NOT REPEATED HERE FOR THE SAKE OF BREVITY. 3. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSES SEE HAS STATED THAT LD. CIT(A) WHILE SUSTAINING THE CONTENTION OF THE AO HAS ERRED IN IGNORING THE FACT THAT A REVISED COMPUTATION OF IN COME WAS FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER DURING TH E COURSE OF ASSESSMENT PROCEEDINGS. HE FURTHER SUBMITTED THAT L D. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE AO HAS VIOLATED THE SETTLED PRINCIPLES OF NATURAL JUSTICE BY NOT ISSUING ANY S PECIFIC NOTICE TO THE ASSESSEE BEFORE REJECTING THE REVISED COMPUTATIO N OF INCOME FILED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCE EDINGS, WHICH IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND NOT SU STAINABLE IN THE EYES OF LAW. HENCE, HE REQUESTED THAT THE ISSUE IN DISPU TE MAY BE SET ASIDE TO THE FILE OF THE AO WITH THE DIRECTIONS TO CONSID ER THE REVISED COMPUTATION IN ACCORDANCE WITH LAW AND THEN DECIDE THE ISSUE IN 4 DISPUTE AFRESH, AFTER GIVING ADEQUATE OPPORTUNITY O F BEING HEARD TO THE ASSESSEE, AS PER LAW. 4. ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS O F THE AUTHORITIES BELOW AND STATED THAT INCOME TAX ACT, 1961 PROVIDES SUFFICIENT TIME TO REVISE THE INCOME TAX RETURN FILED. IT WAS FURTHER SUBMITTED THAT IF THE ASSESSEE HAD MADE ANY GENUINE MISTAKE IN THE IT R FILED, HE SHOULD HAVE AND WOULD HAVE REVISED IT WITHIN TIME GIVEN U/S 139 OF THE I.T. ACT, 1961. THE SCRUTINY PROCEEDINGS U/S 14 3(3) OF THE I.T. ACT, 1961 ARE NOT A METHOD TO REDUCE THE TAXABLE INCOME FROM THE IT ACT. AFTER CONSIDERING THE ABOVE REASONING AND LEGAL POS ITION, THE CLAIM OF THE ASSESSEE TO REDUCE THE TAXABLE INCOME, WITHOUT REVISING THE ITR, CANNOT BE ACCEPTED. THEREFORE, HE SUBMITTED THAT TH E LOWER AUTHORITIES BELOW HAS RIGHTLY REJECTED THE CLAIM OF THE ASSESSE E AND MADE THE ASSESSMENT ACCORDINGLY, WHICH DOES NOT NEED ANY INT ERFERENCE ON OUR PART AND THEREFORE REQUESTED TO UPHOLD THE IMPUGN ED ORDER AND DISMISSED THE APPEAL OF THE ASSESSEE. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS ESPECIALLY THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE ASSESSMENT IN THIS CASE WAS COMPLETED U/S. 143(3) O F THE ACT ON 19.3.2015 WHEREBY THE INCOME OF THE ASSESSEE WAS A SSESSED AT RS. 1,96,83,720/-. FOR THE YEAR UNDER CONSIDERATION, T HE ASSESSEE COMPANY E-FILED THE RETURN ON 31.3.2013 DECLARING I NCOME OF RS. 1,89,83,720/-. DURING ASSESSMENT PROCEEDINGS, A REV ISED 5 COMPUTATION WAS SUBMITTED ON 22.12.2014 REDUCING T HE TAXABLE INCOME TO RS. 33,99,080/- WHEREIN VALUE OF CLOSING STOCK WAS DECREASED AND DEPRECIATION CLAIMED WAS ALSO REDUCED . THE MAJOR REASONS WERE BASICALLY CHANGE OF AUDITORS AT THE LA ST MOMENT AND IT WAS ONLY AT THE TIME OF FINALIZING THE ACCOUNTS FO R THE FY 2013-14 AND HAVING REALIZED THE HIGH FIGURE OF LOSS, THE WHOLE STOCK POSITION AS EXAMINED CRITICALLY BY THE AUDITORS AND THE POSITIO N WAS UPDATED AND REVISED COMPUTATION WAS FILED. THE ASSESSEE ALSO S UBMITTED A CERTIFICATE FROM AUDITOR REGARDING JUSTIFICATION OF REDUCTION IN VALUE OF INVENTORY. THE AO ISSUED NOTICES AND COMPLETE DETA ILS WERE FURNISHED. THE AO EXAMINED BOTH THE CLAIMS EXTENSI VELY AND CRITICALLY WITH REFERENCE TO THE BOOKS OF ACCOUNTS AND NO DEFE CT HAD BEEN POINTED OUT AS FAR AS THE WORKING OF THE VALUATION OF CLOSING STOCK AND ADMISSIBILITY OF DEPRECIATION IS CONCERNED. WE NOT E THAT ONLY OBJECTION OF THE AO WAS THAT THE ASSESSEE SHOULD HAVE REVIS ED THE COMPUTATION IT WITHIN TIME GIVEN U/S. 139 OF THE I.T. ACT, 1961 AND CONSIDERING THE ABOVE REASONING AND LEGAL POSITION, THE CLAIM OF TH E ASSESSEE TO REDUCE THE TAXABLE INCOME, WITHOUT REVISING THE ITR, CANNO T BE ACCEPTED. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF T HE CASE, THE REASONS FOR FILING THE REVISED COMPUTATION DURING T HE ASSESSMENT PROCEEDINGS WERE QUITE GENUINE, HENCE, THE ACTION O F THE LOWER AUTHORITIES IN IGNORING THE REVISED COMPUTATION OF INCOME FILED DURING THE ASSESSMENT PROCEEDINGS IS NOT SUSTAINABLE IN TH E EYES OF LAW. 6 THEREFORE, WE SET ASIDE THE ISSUES IN DISPUTE TO TH E FILE OF THE AO TO DECIDE THE SAME AFRESH, AFTER CONSIDERING THE REVIS ED COMPUTATION OF INCOME OF THE ASSESSEE AND GIVE ADEQUATE OPPORTUNIT Y OF BEING HEARD TO THE ASSESSEE. ASSESSEE IS ALSO DIRECTED TO FULL Y COOPERATE WITH THE AO IN THE PROCEEDINGS AND DID NOT TAKE ANY UNNECESS ARY ADJOURNMENT. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 19/12/2018. SD/- SD/- [L.P. SAHU] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 19/12/2018 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES