Usha Auto Gears Private Limited, CHENNAI V. ACIT, CHENNAI

ITA 510/CHNY/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7134 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 25-08-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 28-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A SASI KUMAR
• Assessee Lawyers: S PARTHASARTHY
• Section: 143(3); 10B; 54; 154; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D B ENCH, CHENNAI . . . , ! ' , % & BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./I.T.A.NO. 510/MDS/2014 ( / ASSESSMENT YEAR : 2008-09) M/S. USHA AUTO GEARS (P)LTD. PLOT NO.2F (NP), SIDCO INDUSTRIAL ESTATE, AMBATTUR,CHENNAI-600 098. VS THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-III(3), CHENNAI-600 034. PAN:AAACU6592Q ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. S.PARTHASARTHY, C.A. /RESPONDENT BY : MR. A. SASI KUMAR, JCIT / DATE OF HEARING : 25 TH AUGUST, 2014 /DATE OF PRONOUNCEMENT : 25 TH AUGUST, 2014 / O R D E R PER CHALLA NAGENDRA PRASAD , JM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-III, CHENN AI DATED 28.10.2013 FOR THE ASSESSMENT YEAR 2008-09 AR ISING OUT OF THE ORDER PASSED UNDER SECTION 154 OF THE AC T. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL:- 2 ITA NO.510/MDS/2014 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) I S OPPOSED TO LAW FACTS AND PROBABILITIES OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME (APPEALS) OUGHT TO HAVE APPREC I ATED THAT A NOTICE U/S 143(2) IS PREDICATED UPON A RETURN FILLED UNDER SECTION 139. HAVING ISSUED A NOTICE U/S 143(2) AND HAVING COMPLETED THE ASSESSMENT UNDER SECTION 143(3) IT IS EVIDENT THAT THE RETURN FILED WAS ACCEPTED AS VALID UNDER SECTION 139 OF THE INCOME TAX ACT 1961 . SO THE OPTION OF INVOKING PROVISION OF SECTION 139(LB) HAS BEEN FORECLOSED AND WAS NOT AVAILABLE. 3. THEREFORE THE PROCEEDING UNDER SECTION 154 WAS VOID AB-INITIO. 4. IF FOR THE SAKE OF ARGUMENT IT SHOULD BE ACCEPTED THAT PROVISIONS OF SECTION 139 WERE NOT SATISFIED THEN IT AUTOMATICALLY FOLLOWS THAT THE NOTICE U/S 143(2) AND THE ORDER U/S 143(3) ARE NULL AND VOID. THEREFORE THERE IS NO VALID ORDER TO BE RECTIFIED UNDER SECTION 154 AND HENCE ALSO THE PROCEEDINGS UNDER SECTION 154 REQUIRE TO BE QUASHED. 5. FURTHER THE DEFECT POINTED OUT IS PURELY OF A TECHNICAL AND PROCEDURAL NATURE AND OUGHT TO HAVE BEEN IGNORED ESPECIALLY BECAUSE THE PROCEDURES WERE IN A TRANSITIONAL STAGE . 3. BRIEF FACTS ARE THAT ASSESSEE E-FILED ITS RETUR N OF INCOME ON 28.9.2008 ADMITTING NIL INCOME. NOTICE UNDER SEC TION 143(2) WAS ISSUED ON 12.8.2009 AND ASSESSMENT UNDE R 3 ITA NO.510/MDS/2014 SECTION 143(3) WAS COMPLETED ON 22.12.2010 DETERMI NING INCOME AT ` 27,41,625/- BEFORE ALLOWING DEDUCTION UNDER SECTION 10B OF THE ACT AND ` 16,02,713/- AFTER ALLOWING DEDUCTION UNDER SECTION 10B AT ` 11,38,912/- UNDER NORMAL PROVISIONS OF THE ACT. SUBSEQUENTLY, ASSESSING OFFI CER BY ORDER DATED 12.10.2011 WITHDREW THE DEDUCTION ALLOW ED UNDER SECTION 10B BY PASSING ORDER SECTION 154 OF THE ACT RECTIFYING THE ASSESSMENT ORDER PASSED ON 22.12.201 0 IN RESTRICTING THE DEDUCTION UNDER SECTION 10B OF THE ACT. THE ASSESSING OFFICER WITHDREW THE DEDUCTION ALLOWED UN DER SECTION 10B OF THE ACT STATING THAT ASSESSEE COULD NOT PRODUCE ACKNOWLEDGEMENT FOR HAVING FILED THE PAPER RETURN, A COPY OF ITR V WITHIN 15 DAYS FROM THE DATE OF ONLIN E FILING. ASSESSING OFFICER WAS OF THE VIEW THAT DEDUCTION UN DER SECTION 10B CAN BE CLAIMED ONLY IF THE RETURN IS FI LED WITHIN DUE TIME AS PER THE PROVISIONS OF SECTION 139(1B) O F THE ACT, BUT SINCE THE ASSESSEE DID NOT COMPLY WITH THE SAID PROVISION, DEDUCTION UNDER SECTION 10B IS NOT ALLOWABLE. ON A PPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) SUSTAINED THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 154 O F THE ACT STATING THAT NO EVIDENCE WAS FILED TO SHOW THAT PA PER RETURN 4 ITA NO.510/MDS/2014 I.E. ITR V WAS FILED WITHIN THE DUE DATE BY THE ASS ESSEE EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE COMMISSI ONER OF INCOME TAX (APPEALS). 4. COUNSEL FOR THE ASSESSEE SUBMITS THAT ASSESSING OFFICER DID NOT FIND FAULT WITH THE RETURN FILED BY THE ASSESSEE AT THE TIME OF COMPLETION OF ASSESSMENT UNDER SECTI ON 143(3) OF THE ACT WHEREIN HE RECOMPUTED THE DEDUCTION ALLO WABLE UNDER SECTION 10B OF THE ACT RESTRICTING THE DEDUCT ION TO ` 11,38,912/- BY EXCLUDING DOMESTIC TURNOVER, FOREIGN EXCHANGE GAIN DIFFERENCE AND FREIGHT ATTRIBUTABLE T O DELIVERY OF ARTICLE OR THING OR COMPUTER SOFTWARE OUTSIDE IN DIA. COUNSEL SUBMITS THAT HAVING ACCEPTED THE RETURN AND HAVING NOT ISSUED ANY DEFECT NOTICE UNDER SECTION 139 AND AFTE R COMPLETING THE ASSESSMENT UNDER SECTION 143(3) OF T HE ACT, THE ASSESSING OFFICER CANNOT GO BACK AND SAY THAT R ETURN FILED BY THE ASSESSEE IS INVALID FOR WANT OF ACKNOWLEDGEM ENT. COUNSEL THEREFORE SUBMITS THAT RECTIFICATION MADE B Y THE ASSESSING OFFICER IS BEYOND THE SCOPE OF PROVISIONS OF SECTION 154 OF THE ACT. 5 ITA NO.510/MDS/2014 5. DEPARTMENTAL REPRESENTATIVE SUPPORTS THE ORDERS OF LOWER AUTHORITIES IN REJECTING THE CLAIM OF THE ASS ESSEE UNDER SECTION 10B OF THE ACT BY RECTIFYING THE ASSESSMENT ORDER. 6. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES AND THE SUBMISSIONS MADE BY BOTH THE PARTIES. IN T HIS CASE, ASSESSEE E-FILED ITS RETURN OF INCOME. THE RETURN WAS SELECTED FOR SCRUTINY BY ISSUE OF NOTICE UNDER SECT ION 143(2) OF THE ACT. THE ASSESSMENT WAS COMPLETED UNDER SEC TION 143(3) ON 22.12.2010 RECOMPUTING DEDUCTION UNDER SE CTION 10B OF THE ACT. SUBSEQUENTLY, ORDER UNDER SECTION 1 54 WAS PASSED WITHDRAWING DEDUCTION ON THE GROUND THAT ASS ESSEE HAS NOT PRODUCED PROOF FOR FILING RETURN OF INCOME I.E. COPY OF ITR V WITHIN 15 DAYS FROM THE DATE OF ONLINE FILING . THE ASSESSING OFFICER NEITHER POINTED OUT ANY DEFECT NO R QUESTIONED THE VALIDITY OF RETURN AT THE TIME OF CO MPLETION OF ASSESSMENT. THE ASSESSING OFFICER HAVING ACCEPTED T HE RETURN AS VALID RETURN AND AFTER COMPLETING THE ASS ESSMENT UNDER SECTION 143(3) OF THE ACT DETERMINING THE INC OME OF THE ASSESSEE ALLOWING DEDUCTION UNDER SECTION 10B OF TH E ACT, IT IS NOT OPEN TO THE ASSESSING OFFICER TO WITHDRAW T HE 6 ITA NO.510/MDS/2014 DEDUCTION ALLOWED UNDER SECTION 10B BY PASSING RECT IFICATION ORDER UNDER SECTION 154 OF THE ACT ON THE GROUND T HAT RETURN IS INVALID. THE QUESTION WHETHER A RETURN ACCEPTE D AS A VALID RETURN AND ASSESSED TO TAX ALLOWING DEDUCTION CAN B E TREATED AS A MISTAKE APPARENT ON RECORD SO AS TO INVOKE PR OVISIONS OF SECTION 154 OF THE ACT IS HIGHLY DEBATABLE ISS UE AND OUTSIDE THE SCOPE OF PROVISIONS OF SECTION 154 OF T HE ACT. THUS, THE ORDER PASSED BY THE ASSESSING OFFICER UN DER SECTION 154 OF THE ACT IS ERRONEOUS AND OUTSIDE THE SCOPE OF PROVISIONS OF SECTION 154 OF THE ACT, HENCE THE SAM E IS QUASHED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY, THE 25 TH DAY OF AUGUST, 2014 AT CHENNAI. SD/- SD/- ( . . . ) ( & () ) ( DR. O.K. NARAYANAN ) ( CHALLA NAGE NDRA PRASAD ) ,- /VICE-PRESIDENT ( . / JUDICIAL MEMBER ( /CHENNAI, / /DATED, 25 TH AUGUST, 2014 SOMU 12 32 /COPY TO: 1. APPELLANT 2. /RESPONDENT 3. 4 () /CIT(A) 4. 4 /CIT 5. 2 7 /DR 6. /GF .