Smt. Chitraleeben B. Chandrani, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-1(1), RAJKOT-GUJARAT

ITA 539/RJT/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0510 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 22-09-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R D LALCHANDANI VIMAL MEHTA
• Keywords: Rectification of order; Speculation loss; Revised return
• Section: 143(3); 154

Judgement Text

ITA N O .539 /RJT/201 4 ASSESSMENT YEAR: 200 7 - 08 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [CORAM: PRAMOD KUMAR AM AND RAJPAL YADAV JM] ITA NO. 539 /RJT/2014 ASSESSMENT YEAR: 200 7 - 08 CHITRALEEBEN B HARATBHAI CHANDRANI ....... .. . ..... APPELLANT MATRU KRUPA, YOGINIKETAN PALOT, NIR MALA SCHOOL ROAD, RAJKOT. [PAN A DSPC 8990 J ] VS. INCOME TAX OFFICER , ....... ..................RESPONDENT WARD 1(1 ) , RAJKOT . APPEARANCES BY: R.D. LALCHANDANI F OR THE A PPELLANT VIMAL MEHTA FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : OCTOBER 6 TH , 201 5 DATE OF PRONOUNCING THE ORDER : OCTOBER 8 TH , 2015 O R D E R PER PRAMOD KUMAR AM: 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HAS CHALLENGED C ORRECTNESS OF THE ORDER DATED 6 TH AUGUST, 2014 PASSED BY THE LD . CIT ( A ) IN THE MATTER O F RECTIFICATION OF MISTAKE UNDER SECTION 154 OF THE INCOME TAX ACT, 1961 ( THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR 2007 - 08 . 2. BRIEFLY STATED, THE RELEVANT FACTS OF TH E CASE ARE AS FOLLOWS. THE ASSESSEE FILED RETURN OF INCOME UNDER SECT I ON 139(4) OF TH E AC T DISCLOSING AN INCOME OF RS.4,13,229/ - . THE ASSESSEE FILED YET ANOTHER RETURN UNDER SECTION 139(4) ON 13.01.2009, WHICH WAS , ITA N O .539 /RJT/201 4 ASSESSMENT YEAR: 200 7 - 08 PAGE 2 OF 5 FOR ALL PRACTICAL PURPOSE , REVISED RETURN, DISCLOSING INCOME OF RS.1,00,58 3 / - . THE REVISED RETURN FILED BY THE ASSESSEE I .E. RETURN FILED ON 13.01.2009 WAS SUBJECT ED TO SCRUTINY ASSESSMENT AND THE ASSESSMENT UNDER SECTION 143(3) WAS FRAMED ON THE SAME , ASSESSING THE INCOME AT THE SAME FIGURE AS RETURNED INCOME I.E. 1,00,5 83 / - . THE MATTER, HOWEVER, DID NOT REST AT THAT. THE A SSESSING OFFICER SUBSEQUENTLY NOTICED THAT SINCE THE RETURN WHICH WAS SUBJECT ED TO SCRUTINY ASSESSMENT WAS A REVISED RETURN AND SINCE THE RETURN FILED UNDER SECTION 139(4) CANNOT BE REVISED, THE ASSESSMENT FRAMED O N THE ASSESSEE ON THE BASIS OF BELATED R EVISED RETURN , I.E. UNDER SECTION 139(4) , WAS LEGALLY IMPERMISSIBLE . THE A SSESSING OFFICER WAS OF THE VIEW THAT , AS HELD BY THE H ON BLE SUPREME COURT IN THE CASE OF KUMAR JAGDISH CHANDRA SINHA VS . CIT , 220 ITR 67 (SC) , A BELATED RETURN I.E. RETURN FILED U N D E R SECTION 139(4) CANNOT BE REVISED AND , THEREFORE , ASSESSMENT FRAMED ON THE BASIS OF A REVISED RETURN IN SUCH CIRCUMSTANCES WAS A MISTAKE APPARENT ON RECORD . IT WAS IN THIS BACKDROP THAT THE ASSESSMENT FRAMED UNDER SECTION 143(3) OF THE ACT ON THE BASI S OF REVISED RETURN WAS SET ASIDE AND THE ORIGINAL RETURN FILED BY THE ASSESSEE DISCLOSING HIGHER INCOME WAS ACCEPTED. THE ASSESSEE CARRIED THE MA T TER IN APPEAL BEFORE THE LD . CIT ( A ) BUT WITHOUT ANY SUCCESS. LD . CIT ( A ), IN A VERY WELL REASONED ORDER , DI SMISSED THE GRIEVANCE OF THE ASSESSEE AND HELD AS FOLLOWS : - 3.0 GROUND NO.1 IS REGARDING THE ASSESSMENT MADE U/S.154. THE RETURN OF INCOME WAS FILED ON 17.12.2007. A FURTHER REVISED RETURN WAS FILED ON 31.03.2009. I N THE REVISED RETURN, THE TRADING IN DERIVATIVES WAS CLAIMED AS A BUSINESS LOSS AND NOT AS A SPECULATION LOSS. THE ASSESSMENT WAS COMPLETED U/S. 143(3) ON 20.11.2009 BY ACCEPTING THE INCOME RETURNED AS PER THE REVISED RETURN OF INCOME . SUBSEQUENTLY, T HE AO ISSUED A NOTICE U/S. 154 OF THE A CT FOR RECTIFICATION OF THE ABOVE MISTAKE AND ORDER U/S. 154 WAS PASSED ON 26.04.2010. THE MAIN BASIS ON WHICH THE ORDER U/S. 154 WAS PASSED WAS THAT A BELATED RETURN U/S.139(4) CANNOT BE REVISED. FOR THIS, THE AO HAS TAKEN SUPPORT OF THE DECISION OF THE HON BLE SUPREME COURT IN CASE OF KUMAR JAGDISHCHAND R A SINHA VS. CIT , 226 ITR 67 (1996) . 3.1 DURING THE COURSE OF APPELLATE PROCEEDINGS, I T WAS CONTENDED BY THE APPELLANT AS UNDER : - ITA N O .539 /RJT/201 4 ASSESSMENT YEAR: 200 7 - 08 PAGE 3 OF 5 1. EVEN IF RETURN IS FILED U/S. 139(4), THE REVISED RETURN CAN BE FILED. 2. EVEN IF THE APPELLANT HAS NOT CLAIMED ANY DEDUCTION OR RELIEF, THE AO CAN ALLOW THE SAME DURING ASSESSMENT PROCEEDINGS. 3. IT IS NOT THE CASE OF THE AO THAT THE LOSS IN DERIVATIVE TRADING IS NOT AN ALLOWABLE LOSS. HIS ONLY CASE IS THAT SINCE IT WAS NO T CLAIMED IN THE ORIGINAL RETURN, IT CANNOT BE CLAIMED AT ANY STAGE. 4. THE ALLOWABILITY OF THE CLAIM DOES NOT DEPEND MERELY ON THE FILING OF REVISED RETURN OF INCOME. THE CLAIM CAN BE ALLOWED IF RAISED DURING THE COURSE OF ASSESSMENT PROCEEDINGS ALSO. 5. THUS THERE IS NO LEGAL OR FACTUAL JUSTIFICATION FOR RECTIFYING THE ASSESSMENT U/S. 154 . 3.2 I HAVE CAREFULLY CONSIDERED THE APPELLANT S CONTENTION . THE AO HAS VERY CLEARLY AND CORRECTLY POINTED OUT AND RELIED UPON THE DECISION OF THE HON BLE SUPREME COUR T IN CASE OF KUMAR JAGDISHCHANDRA SINHA (SUPRA) WHEREIN IT IS HELD THAT AN ASSESSEE IS NOT ENTITLED TO FILE REVISED RETURN WHEN RETURN IS FILED U/S.139(4) . WHILE PASSING THE ORDER U/S. 143(3), THE AO HAS NOT TAKEN COGNISANCE OF THIS DECISION OF THE HON BL E APEX COURT . THIS IS DEFINITELY A MISTAKE APPARENT FROM RECORDS AND THUS CLEARLY RECTIFIABLE U/S. 154. THE HON BLE SUPREME COURT IN THE CASE OF ACIT VS. SAURASHTRA KUTCH STOCK EXCHANGE LIMITED, 305 ITR 227 HAS CLEARLY HELD THAT NON - CONSIDERATION OF A DE CISION OF THE SUPREME COURT IS A MISTAKE APPARENT FROM RECORDS. THE ACTION OF THE AO IN PASSING ORDER U/S. 154 IS PERFECTLY VALID AND UPHELD . THE GROUND OF APPEAL IS DISMISSED. 3. THE ASSESSEE IS AGGRIEVED AND IS IN APPEAL BEFORE US. 4. WE HAVE HEARD T HE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 5. WE HAVE NOTED THAT THE MAIN THRUST OF THE LD . COUNSEL S ARGUMENT WAS THAT THERE IS NO BAR ON THE NUMBER OF RETURN S WHICH CAN BE FILED UNDER SECTION 139(4) OF THE A CT . THIS ARGUMENT , HOWEVER , IGNORES THE SETTLED LEGAL POSITION THAT A BELATED RETURN I.E. THE RETURN FILED UNDER SECTION 139(4) , AS ON THE FACTS OF THIS CASE , CANNOT BE SUBJECTED TO REVISION , AS IS THE LAW LAID DOWN BY THE H ON BLE SUPREME COURT IN THE CASE OF JAGDISH CHANDRA SINHA VS. CIT (SUPRA). HOWEVER , IF WE HAVE TO UPHOLD THE CONTENTION OF THE ASSESSEE AND PROCEED ON THE BASIS THAT , THE ASSESSEE CAN FILE ANY NUMBER OF BELATED ITA N O .539 /RJT/201 4 ASSESSMENT YEAR: 200 7 - 08 PAGE 4 OF 5 RETURN UNDER SECTION 139( 4), AND SUBSEQUENT BELATED RETURN WILL SUBSTITUTE EARLIER RETURN(S) , WE WILL END UP HOLDING , FOR ALL PRACTICAL PURPOSE , THAT EVEN A RETURN REVISED UNDER SECTION 139(4) CAN BE SUBJECTED TO DEFACTO REVISION . T HAT CERTAINLY IS CONTRARY TO THE LAW LAID DOWN B Y THE HON BLE SUPREME COURT WHICH IS BINDING ON US UNDER ARTICLE 141 OF THE CONSTITUTION OF INDIA. T HE CONTENTION CANVASSED BY THE LD . COUNSEL IS , THEREFORE , CLEARLY CONTRARY TO LAW . W HILE IT IS INDEED TRUE THAT THERE IS NO SPECIFIC BAR ON FILING ANY NUM BER OF BELATED RETURNS, SUCH FILING OF BELATED RETURNS , AFTER FILING OF ONE B ELATED RETURN AND FOR THE SAME ASSESSMENT YEAR , WILL ACTUALLY BE INFRUCTUOUS BECAUSE THERE IS NO SPECIFIC PROVISION FOR REVISING A BELATED RETURN ALREADY FILED. QUITE TO THE CONT RARY , AS WE HAVE NOTED ABOVE, IN VIEW OF THE LAW LAID DOWN BY HON BLE SUPREME COURT IN THE CASE OF JAGDISH CHANDRA SINHA (SUPRA) , THERE IS A BAR ON REVISING RETURN FILED UNDER SECTION 139(4). IN THIS VIEW OF THE MATTER, THE A SSESSING OFFICER WAS INDEED IN ERROR IN RECOGNISING , AND PROCEEDING TO FRAME SCRUTINY ASSESSMENT ON , A REVISED BELATED RETURN WHICH WAS NOT A VALID RETURN. THE IMPUGNED RECTIFICATION ORDER PASSED UNDER SECTION 154 OF THE A CT WAS ACCORDINGLY QUITE JUSTIFIED . WE APPROVE THE SAME AND DE CLINE TO INTERFERE IN THE SAME. 6 . NO OTHER ISSUE WAS PRESSED BEFORE US. 7 . IN THE RESULT, APPEAL IS DISMISSED IN THE TERMS INDICATED ABOVE. P RONOUNCED IN THE OPEN COURT ON THIS 8 TH DAY OF OCTOBER, 2015. SD/ - SD/ - RAJPAL YADAV PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) RAJKOT , THE 8 TH DAY OF OCTOBER , 2015 PBN/* ITA N O .539 /RJT/201 4 ASSESSMENT YEAR: 200 7 - 08 PAGE 5 OF 5 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT (A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT