DCIT, New Delhi V. M/s Ngenox Technologies Pvt. Ltd., New Delhi

ITA 5099/DEL/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8014 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2006-2007
• Appeal Filed On: 27-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order; Search and seizure; Revised return
• Section: 143(3); 153A; 139(5); 139(1); 72; 153; 147; 148; 132; 154; 15; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: E NEW DELHI BEFORE SHRI O.P. KANT, ACCOUNTANT MEMBER AND SHRI K.N. CHARY, JUDICIAL MEMBER [THROUGH VIDEO CONFERENCING] ITA NO.5099/DEL/2016 ASSESSMENT YEAR: 2006-07 DCIT, CIRCLE -18(1), NEW DELHI VS. M/S. NGENOX TECHNOLOGIES PVT. LTD. (FORMERLY VIPUL LAING O ROUKE P. LTD.), 14/185-186, GROUND FLOOR, MAIN SHIVALIK ROAD, MALVIYA NAGAR, NEW DELHI PAN : AABCV6710E (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST ORD ER DATED 03/06/2016 PASSED BY THE LEARNED COMMISSIONER OF IN COME-TAX (APPEALS)-I, NEW DELHI [IN SHORT THE LD. CIT(A)] FOR ASSESSMENT YEAR 2006-07 IN RELATION TO RECTIFICATION OF ORDER UNDER SECTION APPELLANT BY MS. PARAMITA M. BISWAS, CIT(DR) RESPONDENT BY SH. RAJESH ARORA, CA DATE OF HEARING 10.08.2021 DATE OF PRONOUNCEMENT 25.08.2021 2 ITA NO.5099/DEL/2016 153A PASSED BY THE ASSESSING OFFICER. THE GROUNDS R AISED BY THE REVENUE ARE REPRODUCED AS UNDER: 1. WHETHER IN FACT AND CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT(A) IS LEGALLY JUSTIFIED IN HOLDING THAT THE RET URN FILED IN RESPONSE T NOTICE U/S I53A OF THE INCOME TAX ACT 19 61 (THE ACT) IS ACTUALLY REVISED RETURN U/S 139 (5) OF THE ACT? 2. WHETHER IN FACTS AND CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) IS LEGALLY JUSTIFIED IN HOLDING THAT RET URN OF INCOME FILED BY THE ASSESSEE IN RESPONSE TO NOTICE U/S 153 A OF THE ACT AFTER A DELAY OF MORE THAN SIX MONTHS FROM DUE DATE OF FILI NG OF RETURN AS SPECIFIED IN NOTICE U/S 153A COULD NOT HELD AS BEL ATED RETURN IF THE SAME WAS FILED WITHIN TIME PERIOD AS ALLOWED U/ S 139 (5) OF THE ACT? 3. WHETHER IN FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. C1T(A) IS LEGALLY JUSTIFIED IN HOLDING THAT EVE N IF THE ASSESSEE HAD NOT FILED RETURN OF INCOME WITHIN TIME SPECIFIE D IN THE NOTICE U/S 153A OF THE ACT IT WAS ENTITLED FOR CARRY FORWA RD OF LOSSES? 4. WHETHER ON THE FACT AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) IS LEGALLY JUSTIFIED IN IGNORING CLEAR A ND EXPLICIT LANGUAGE OF CLAUSE (A) OF SECTION 153A OF THE ACT. WHICH EMPOWER THE ASSESSING OFFICER TO SPECIFY TIME LIMIT TO FILE RETURN OF INCOME AND THAT PROVISION OF SECTION 139(5) OF THE ACT WAS NOT APPLICABLE TO THE FACT OF THIS CASE? 5. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND A LTER OR FORGO ANY GROUND/(S) OF APPEAL EITHER BEFORE OR AT THE TIME O F HEARING OF THE APPEAL. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT: (I) THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME (ORIGINAL RETURN) IN TERMS OF SECTION 139(1) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) ON 30/11/2006, DECLARING LOSS OF 1,82,31,067/-. (II) SUBSEQUENTLY, A SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE ACT WAS CARRIED OUT ON THE PREMI SES OF THE ASSESSEE ON 01/06/2006 AND NOTICE UNDER SECTION 153A OF THE ACT WAS ISSUED ON 30/07/2007, 3 ITA NO.5099/DEL/2016 ASKING THE ASSESSEE TO FILE RETURN OF INCOME FOR ASSESSMENT YEARS FALLING UNDER THE SEARCH PERIOD, INCLUDING ASSESSMENT YEAR 2006-07, I.E., THE ASSESSMENT YEAR UNDER CONSIDERATION, WITHIN 16 DAYS OF SERVICE OF THE NOTICE (III) HOWEVER, THE ASSESSEE FILED RETURN OF INCOME IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE ACT ON 13/02/2008, DECLARING LOSS OF 1,57,26,756/-. (IV) THE ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDE R SECTION 153A READ WITH SECTION 143(3) OF THE ACT ON 28/11/2008 AT RETURNED LOSS OF 1,57,26,706/-. (V) SUBSEQUENTLY, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 154 OF THE ACT ON 28/03/2013, PROPOSING FOR DENYING CARRY-FORWARD OF LOSS CLAIMED IN THE RETURN FILED UNDER SECTION 153A ON THE GROUND T HAT RETURN WAS NOT FILED WITHIN THE STIPULATED PERIOD O F 16 DAYS. (VI) THE ASSESSING OFFICER REJECTED THE CONTENTION OF TH E ASSESSEE AND DENIED TO CARRY FORWARD OF THE LOSS OF 1,57,26,756/-REPORTED IN RETURN FILED UNDER SECTION 153A OF THE ACT. (VII) ON FURTHER APPEAL, THE LD. CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE OF CARRY-FORWARD OF THE LOSSES CLAIMED IN THE YEAR UNDER CONSIDERATION . (VIII) AGGRIEVED, THE REVENUE IS BEFORE THE TRIBUNAL RAISI NG THE GROUNDS AS REPRODUCED ABOVE. 4 ITA NO.5099/DEL/2016 3. WE HAVE HEARD RIVAL SUBMISSION OF THE PARTIES, WHO APPEARED THROUGH VIDEO CONFERENCING FACILITY AND PE RUSED THE RELEVANT MATERIAL ON RECORD. 4. THE LEARNED DR RELIED ON THE ORDER OF THE LEARNED ASSESSING OFFICER AND SUBMITTED THAT IN VIEW OF THE RETURN OF INCOME UNDER SECTION 153A NOT FILED BY THE ASSESSEE WITHIN THE S TIPULATED PERIOD, THE ASSESSING OFFICER IS JUSTIFIED IN DENYI NG THE CARRY- FORWARD OF THE LOSS IN VIEW SECTION 153A(1)(A) OF T HE ACT WHICH PRESCRIBE THAT THE PROVISIONS OF THIS ACT, INCLUDIN G SECTION 71 SHALL BE APPLIED ON THE RETURN FILED UNDER SECTION 153A ALSO. 5. ON THE OTHER HAND, THE LEARNED COUNSEL OF THE ASSE SSEE SUBMITTED THAT ASSESSMENT IN THE YEAR UNDER CONSIDE RATION WERE ALREADY COMPLETED PRIOR TO THE DATE OF SEARCH AND, THEREFORE, IN THE RETURN OF INCOME FILED UNDER SECTION 153A, ONLY ADDITION BASED ON INCRIMINATING MATERIAL COULD HAVE BEEN DON E AND NO OTHER ADJUSTMENT IS PERMITTED UNDER THE LAW. IN SUP PORT OF HIS CONTENTION, HE RELIED ON THE DECISION OF THE TRIBUN AL, PUNE BENCH IN THE CASE OF SANJAY NANDLAL VYAS VS ITO, CENTRAL-2 IN ITA NO. 771 TO 774/PN/2010. 6. WE HAVE HEARD RIVAL SUBMISSION OF THE PARTIES ON T HE ISSUE IN DISPUTE AND PERUSED THE RELEVANT MATERIAL ON REC ORD. THE UNDISPUTED FACT IN THE CASE IS THAT THE RETURN OF I NCOME FILED UNDER SECTION 139(1) OF THE ACT ON 30/11/2006, DECL ARING LOSS OF 1,82,31,067/- FOR THE YEAR UNDER CONSIDERATION, IS WITHIN THE DUE DATE PROVIDED UNDER THE ACT. IN TERMS OF SECTIO N 139(3) OF THE ACT, LOSS CLAIMED IN THE RETURN OF INCOME CAN BE AL LOWED TO CARRY FORWARD, IF THE RETURN IS FILED WITHIN THE TIME ALL OWED UNDER SECTION 139(1) OF THE ACT. FURTHER, SECTION 80 OF T HE ACT HAS ALSO 5 ITA NO.5099/DEL/2016 LAID DOWN THAT LOSS SHALL NOT BE CARRIED FORWARD UN DER SECTION 72 OF THE ACT, IF SAME IS NOT DETERMINED IN PURSUANCE OF THE RETURN FILED UNDER SECTION 139(3) OF THE ACT. SO AS FAR AS CARRY FORWARD OF THE LOSS OF 1,82,31,067/- UNDER REGULAR PROVISIONS OF THE ACT IS CONCERNED, IT HAS NOT BEEN DISPUTED. THE DISPUTE AR OSE WHEN THE ASSESSEE FILED RETURN OF INCOME UNDER SECTION 153A OF THE ACT. THE ASSESSING OFFICER DIRECTED THE ASSESSEE TO FILE RET URN OF INCOME UNDER SECTION 153A WITHIN 16 DAYS OF THE ISSUE OF T HE NOTICE DATED 30/07/2007. HOWEVER, THE ASSESSEE FILED RETUR N OF INCOME DECLARING LOSS OF 1,57,26,756/- ON 13/02/2008. IN THIS RETURN UNDER SECTION 153A, THE ASSESSEE HAS REDUCED ITS CL AIM OF CARRY- FORWARD OF THE LOSSES. NOW THE CONTENTION OF THE LE ARNED ASSESSING OFFICER IS THAT IN VIEW OF SECTION 153A(1 )(A) OF THE ACT, PROVISION OF SECTION 139 APPLIES ON THE RETURN TO B E FILED UNDER SECTION 153A OF THE ACT. THE RELEVANT PART OF THE P ROVISION IS REPRODUCED AS UNDER: ASSESSMENT IN CASE OF SEARCH OR REQUISITIO N. 153A. (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139 , SECTION 147 , SECTION 148 , SECTION 149 , SECTION 151 AND SECTION 153 , IN THE CASE OF A PERSON WHERE A SEARCH IS INITIAT ED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER THE 31ST DAY OF MAY, 2003 9 [ BUT ON OR BEFORE THE 31ST DAY OF MARCH, 2021 ] , THE ASSESSING OFFICER SHALL (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO F URNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING W ITHIN SIX ASSESSMENT YEARS AND FOR THE RELEVANT ASSESSMENT YE AR OR YEARS REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139 ; (B) 6 ITA NO.5099/DEL/2016 6.1 THE SECTION PRESCRIBE THAT SO FAR AS MAY BE THE R ETURN FILED UNDER SECTION 153A SHALL BE TREATED AS IF IT WAS RE QUIRED TO BE FURNISHED UNDER SECTION 139. THEREFORE, ACCORDING T O THE ASSESSING OFFICER, ONCE THE RETURN UNDER SECTION 15 3A HAS BEEN FILED BEYOND THE DUE DATE PRESCRIBED IN THE NOTICE, THE ASSESSEE IS NOT ENTITLED FOR CARRY-FORWARD OF THE LOSSES. 6.2 IN OUR OPINION, THE ASSESSING OFFICER HAS NOT CORR ECTLY INTERPRETED THE PROVISION. IN OUR VIEW, TWO SITUATI ONS ARISE IN 153A PROCEEDINGS, FIRSTLY WHERE ASSESSMENT PROCEEDI NG GET ABETTED AND; SECONDLY, WHERE ASSESSMENT PROCEEDING ARE NOT ABETTED. THE CONSEQUENCE OF NOTICE UNDER SECTION 15 3A(1)(A) OF THE ACT IS THAT THE ASSESSEE IS REQUIRED TO FURNISH FRESH RETURN OF INCOME FOR EACH OF THE SIX ASSESSMENT YEARS. IF ASS ESSMENT PROCEEDINGS IN PARTICULAR ASSESSMENT YEAR ARE PENDI NG AS ON THE DATE OF THE SEARCH, SAME GET ABATED AND IN CONSEQUE NCE TO NOTICE UNDER SECTION 153A, ASSESSMENT OF SUCH YEAR WOULD B E SUBJECT TO ASSESSMENT BY THE REVENUE FOR THE FIRST TIME AND TH E EARLIER RETURN FILED FOR THE PURPOSE OF ASSESSMENT WOULD BE TREATE D AS NON EST IN LAW. CONSEQUENTLY, THE RETURN FILED UNDER SECTION 1 53A(1)(A) IS RETURN FURNISHED UNDER SECTION 139 OF THE ACT. THER EFORE, THE PROVISION OF THE ACT WHICH WOULD BE OTHERWISE APPLI CABLE IN THE CASE OF RETURN FILED UNDER SECTION 139(1) OF THE AC T WOULD ALSO APPLY IN CASE OF RETURN FILED UNDER SECTION 153A OF THE ACT. 6.3 BUT WHERE THE ASSESSMENTS ARE NOT ABATED OR NO ASSESSMENTS ARE PENDING AS ON THE DATE OF THE SEARC H, THE RETURN OF INCOME FILED UNDER SECTION 139 CANNOT BE TREATED AS NON EST. IN SUCH COMPLETED ASSESSMENTS, ADDITION IF ANY CAN BE MADE ON THE 7 ITA NO.5099/DEL/2016 BASIS OF THE INCOME RELATING INCRIMINATING MATERIAL OTHERWISE THE POSITION ACCEPTED IN COMPLETED ASSESSMENT HAS TO RE ITERATE. THE WORD SO FAR AS MAY BE IN SECTION 153A(1)(A) APPLI ES FOR ASSESSMENT YEAR WHICH GET ABATED AND NOT OTHERWISE. IN THE YEAR UNDER CONSIDERATION, IT IS UNDISPUTED THAT NO ASSES SMENT WAS PENDING AS ON THE DATE OF THE SEARCH AND, THEREFORE , THE ASSESSING OFFICER IS NOT PERMITTED TO MAKE CHANGES IN THE WHA TEVER DETERMINED IN REGULAR ASSESSMENT PROCEEDING ON THE BASIS OF THE RETURN OF INCOME FILED, IN ABSENCE OF ANY INCRIMINA TING MATERIAL. SINCE IN THE REGULAR PROCEEDING, THE ASSESSEE IS EN TITLED TO CARRY FORWARD THE LOSSES IN TERMS OF THE PROVISION OF THE ACT, THE ACTION OF THE ASSESSING OFFICER IN DENYING THE CARRY FORWA RD OF THE LOSS ON ACCOUNT OF THE LATE FILING OF THE RETURN UNDER S ECTION 153A OF THE ACT, IS NOT JUSTIFIED. ACCORDINGLY, WE DISMISS THE GROUNDS RAISED BY THE REVENUE ON THIS ISSUE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25TH AUGUST, 20 21. SD/- SD/- (K.N. CHARY) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 25 TH AUGUST, 2021. RK/- (DTDC) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI