Shri Ratanlal Dayama, Nagpur V. Asstt.Commissioner of Income Tax Amravati Circle, Amaravati

ITA 59/NAG/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93377 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 11-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R KIRTANE
• Assessee Lawyers: R V LOYA
• Keywords: Business income; Rectification of order; Opportunity of being heard; Revised return; Bonafide mistake
• Section: 154

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO.59/ NAG/2013 ASSESSMENT Y EAR : 2005-06. SHRI RATANLAL DAYAMA, A SSTT. COMMISSIONER OF INCOME-TAX, AMRAVATI. V/S . AMRAVATI CIRCLE, AMRAVATI. PAN ACMPS 1651H. APPELLANT. RESPONDENT. APPELLANT BY SHRI R.V. LOYA. RESPONDENT BY : SH RI S.R. KIRTANE. DATE OF HEARING - 21-04-2015 DATE OF ORDER 8 TH MAY,2015 O R D E R PER SHRI SHAMIM YAHYA, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LEARNED CIT(APPEALS)-19, MUMBAI AND PERTAINS TO ASSESSMENT YEAR 2005-06. 2. THE GROUNDS RAISED BY THE ASSESSEE IN THIS APPE AL READ AS UNDER : 1. THAT THE ORDER OF THE LEARNED ASSTT. COMMISSION ER OF INCOME-TAX IS BAD IN LAW AND WRONG ON FACTS AND THE LEARNED CIT(APPEALS ) ERRED IN CONFIRMING THE SAME. ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE ACTIONS OF THE CIT(A) IS UNJUSTIFIED. 2 2. THAT THE ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN REJECTING THE APPLICATION OF ASSESSEE U/S 154 TO CORRECT THE RE TURN OF INCOME FROM TIME TO TIME AND LEARNED CIT(A) WAS UNJUSTIFIED IN CONFI RMING THE ACTION OF AO . ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ACTION OF THE LEARNED AUTHORITIES IS HIGHLY UNJUSTIFIED. 3.THAT THE ASSESSING OFFICER ERRED IN LAW AND ON F ACTS IN HOLDING THAT SINCE ORIGINAL RETURN WAS BELATED, REVISED RETURN IS NON EST AND LEARNED CIT(A) WAS UNJUSTIFIED IN UPHOLDING THE ORDER OF ASSESSING OFFICER . 3. IN THIS CASE THE ASSESSEE FILED RETURN OF INCOME FOR ASSESSMENT YEAR 2005- 06 BELATEDLY ON 8-11-2006. SUBSEQUENTLY THE ASSESSE E FILED TWO REVISED RETURN IN THIS RESPECTT, FIRST DATED 27-02-2006 AND ANOTHER D ATED 31-01-2006. THE FACTS LEADING TO THE MATTER CONTAINED IN THE ORIGINAL RET URN AND THE SUBSEQUENT REVISIONS ARE EMANATING FROM THE FOLLOWING SUBMISSI ONS OF THE ASSESSEE : THE ASSESSEE HAS FILED RETURN OF INCOME FOR ASS ESSMENT YEAR 2005-06 ON 30-11-2005 DECLARING TOTAL INCOME AT ` .5,55,485. SUBSEQUENTLY, IT WAS NOTICED THAT THE SCRAP VALUE REALIZED FOR ` .76,500/- FROM SCRAPING OF TRUCK WAS INCLUDED IN TRUCK PLYING BUSINESS INCOME BY OV ERSIGHT TO RECTIFY THIS MISTAKE, ASSESSEE FILED REVISED RETURN OF INCOME O N 27.01.2006 DECLARING TOTAL INCOME AT ` .4,78985/-. AFTER FILING THE REVISED RETURN, IT WAS NOTICED BY THE ASSESSEE THAT HE HAS NOT CLAIMED DEDUCTION U/S . 88 OF THE INCOME TAX ACT. THE RETURN WAS AGAINST REVISED ON 30.01.2006 CLAIMING DEDUCTION U/S 88 AND THE RETURNED INCOME WAS ` .4,78,985/- HOWEVER, THE INCOME-TAX DEPARTMENT PASSED AN ORDER UNDER SECTION 143(1) OF THE I.T. ACT ON THE BASIS OF THE FIRST RETURN AND T OTAL NET PAYABLE WAS DETERMINED AT ` .12,507/- VIDE ORDER DATED 03-03-2006. NOW THE ASSE SSEES REQUEST WAS THAT THE OTHER TWO REVISED RETURNS WERE SUBMITTED BEFORE ISSUE OF THIS ORDER UNDER 3 SECTION 143(1) AND IN THOSE REVISED RETURNS THE ASS ESSEE HAS DULY EXPLAINED THAT THERE WAS A BONAFIDE MISTAKE BY THE ASSESSEE WITH R EGARD TO THE DISCLOSURE OF A SCRAP VALUE REALIZED FROM TRUCK PLYING BUSINESS AND ALSO THE NON CLAIMING OF DEDUCTION UNDER SECTION 88. HOWEVER, THE ASSESSING OFFICER VIDE HIS ORDER PASSED UNDER SECTION 154 HAD HELD THAT ASSESSEES APPLICAT ION FOR RECTIFICATION REGARDING CHARGE OF INCOME AS PER REVISED RETURN CANNOT BE CO NSIDERED AS THE ORIGINAL RETURN WAS BELATEDLY FILED AND WAS NON EST. UPON AS SESSEES APPEAL IN THIS REGARD, LEARNED CIT(APPEALS) ALSO HELD THAT THERE IS NO PR OVISION IN THE ACT FOR REVISING A BELATED RETURN FILED UNDER SECTION 139(4) NOW AGAIN ST THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 4. LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT T HOUGH IT IS TRUE THAT THE ASSESSEE HAS SUBMITTED BELATED RETURN ON 8-11-2005, BUT THERE WERE SOME BONAFIDE MISTAKES IN THE SAID RETURN. THESE WERE DU LY INTIMATED TO THE DEPARTMENT BY WAY OF REVISED RETURNS. THESE REVISE D RETURNS/INTIMATION WERE ALL SUBMITTED BEFORE PASSING OF THE ORDER UNDER SECTION 143(1). LEARNED COUNSEL PLEADED THAT SINCE THERE WAS A BONAFIDE ERROR IN TH E ORIGINAL RETURN FILED, THE SUBSEQUENT INTIMATIONS BY WAY OF REVISED RETURNS SH OULD BE TREATED AS APPLICATION FOR RECTIFICATION. IN THIS REGARD, LEARNED COUNSEL OF THE ASSESSEE HAS PLACED RELIANCE UPON THE DECISION OF HONBLE APEX COURT IN THE CASE OF CIT V/S. SHELLY PRODUCTS 261 ITR 367.. 5. LEARNED D.R., ON THE OTHER HAND, RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND REITERATED THAT THERE IS NO PROVISION IN THE ACT FOR REVISING THE RETURN FILED BELATEDLY UNDER SECTION 139(4) OF THE I.T. AC T. 4 6. UPON CAREFUL CONSIDERATION, WE NOTE THAT IT IS U NDOUBTED THAT THE ASSESSEE HAS FILED BELATED RETURN FOR THE CONCERNED ASSESSM ENT YEAR. HOWEVER, ASSESSEE HAD FOUND CERTAIN BONAFIDE MISTAKES IN THIS RETURN AND IT HAS FOUND THAT WHEN THESE MISTAKES WERE CORRECTED, THE ASSESSEE WAS ACT UALLY ENTITLED TO REFUND OF ` .23,432/-. THESE MISTAKES WERE COMMUNICATED TO THE REVENUE BY WAY OF REVISED RETURNS. NOW THESE REVISED RETURNS WERE NOT CONSIDE RED BY THE REVENUE ON THE GROUND THAT THERE IS NO PROVISION FOR REVISION OF B ELATED RETURN. THE ASSESSEES PLEA FOR RECTIFICATION OF MISTAKE U/S 154 WAS ALSO REJECTED BY THE ASSESSING OFFICER ON THE GROUND THAT THERE IS NO PROVISION FOR REVISI ON OF BELATED RETURN. THE LEARNED CIT(APPEALS) HAS ALSO AFFIRMED THIS ACTION OF THE ASSESSING OFFICER. HOWEVER, WE FIND THAT THOUGH TECHNICALLY IT IS COR RECT THAT THERE CANNOT BE ANY REVISION OF A BELATED RETURN, HOWEVER, THE FACT TH AT CANNOT BE LOST SIGHT OF IS THAT THE ASSESSEE HAS ALSO MOVED A PETITION UNDER SECTIO N 154. IN THIS PETITION THE ASSESSEE HAS REQUESTED THAT SINCE THE ASSESSEE HAD COMMITTED MISTAKE IN THE ORIGINAL RETURN FILED, THESE MISTAKES SHOULD BE TAK EN CARE OF AND RECTIFIED AND ULTIMATELY THE ASSESSEE SHOULD BE GRANTED REFUND AM OUNTING TO ` .23,432/-. THE REVENUE AUTHORITIES HAVE NOT LOOKED INTO THE BONAFI DES OF THE ASSESSEES SUBMISSION. THEY HAVE SIMPLY BRUSHED THESE SUBMISSI ONS ASIDE ON THE GROUND THAT BELATED RETURN CANNOT BE REVISED. HOWEVER, AS MANDATED BY THE HONBLE APEX COURT IN CIT V/S. SHELLY PRODUCTS, REVENUE IS BOUND TO TAKE NOTICE OF THE BONAFIDE REFUND CLAIM OF THE ASSESSEE IF THE ASSESS EE HAS BY MISTAKE OR INADVERTENCE OR ON ACCOUNT OF IGNORANCE OFFERED CER TAIN INCOME WHICH IS NOT TAXABLE. IN THIS REGARD WE CAN GAINFULLY REFER TO T HE FOLLOWING OBSERVATIONS OF THE HONBLE APEX COURT : 5 WE CANNOT LOSE SIGHT OF THE FACT THAT THE FAIL URE OR INABILITY OF THE REVENUE TO FRAME A FRESH ASSESSMENT SHOULD NOT PLA CE THE ASSESSEE IN A MORE DISADVANTAGEOUS POSITION THAT IN WHAT HE WOU LD HAVE BEEN IF A FRESH ASSESSMENT WAS MADE. IN A CASE WHERE AN ASSESSEE C HOOSES TO DEPOSIT BY WAY OF ABUNDANT CAUTION ADVANCE TAX OR SELF-ASSESS MENT TAX WHICH IS IN EXCESS OF HIS LIABILITY ON THE BASIS OF THE RETUR N FURNISHED OR THERE IS ANY ARITHMETICAL ERROR OR INACCURACY , IT IS OPEN TO H IM TO CLAIM REFUND OF THE EXCESS TAX PAID IN THE COURSE OF THE ASSESSMENT PR OCEEDINGS. HE CAN CERTAINLY MAKE SUCH A CLAIM ALSO BEFORE THE CONCER NED AUTHORITY CALCULATING THE REFUND. SIMILARLY, IF HE HAS BY MISTAKE OR INA DVERTENCE OR ON ACCOUNT OF IGNORANCE, INCLUDED IN HIS INCOME ANY AMOUNT WHICH IS EXEMPTED FROM PAYMENT OF INCOME-TAX, OR IS NOT INCOME WITHIN THE CONTEMPLATION OF LAW, HE MAY LIKEWISE BRING THIS TO THE NOTICE OF THE AS SESSING AUTHORITY, WHICH IF SATISFIED, MAY GRANT HIM RELIEF AND REFUND THE TAX PAID IN EXCESS, IF ANY. SUCH MATTERS CAN BE BROUGHT TO THE NOTICE OF THE CONCER NED AUTHORITY IN A CASE WHEN REFUND IS DUE AND PAYABLE, AND THE AUTHORITY CONCERNED, ON BEING SATISFIED, SHALL GRANT APPROPRIATE RELIEF. IN CASE S GOVERNED BY SECTION 240 OF THE ACT, AN OBLIGATION IS CAST UPON THE REVENUE T O REFUND THE AMOUNT TO THE ASSESSEE WITHOUT HIS HAVING TO MAKE ANY CLAIM IN THAT BEHALF. IN APPROPRIATE CASES THEREFORE, IT IS OPEN TO THE ASS ESSEE TO BRING FACTS TO THE NOTICE OF THE CONCERNED AUTHORITY ON THE BASIS OF THE RETURN FURNISHED, WHICH MAY HAVE A BEARING ON THE QUANTUM OF THE REF UND, SUCH AS THOSE THE ASSESSEE COULD HAVE URGED UNDER SECTION 237 OF THE ACT. THE CONCERNED AUTHORITY FOR THE LIMITED PURPOSE OF CALCULATING T HE AMOUNT TO BE REFUNDED UNDER SECTION 240 OF THE ACT, MAY TAKE ALL SUCH FA CTS INTO CONSIDERATION AND CALCULATE THE AMOUNT TO BE REFUNDED. SO VIEWED, A N ASSESSEE WILL NOT BE PLACED IN A MORE DISADVANTAGEOUS POSITION THAN WHA T HE WOULD HAVE BEEN, HAD AN ASSESSMENT BEEN MADE IN ACCORDANCE WITH LAW . A PERUSAL OF THE ABOVE OBSERVATION OF HONBLE APEX COURT CLEARLY POSTULATES THAT IF THE ASSESSEE HAS BY MISTAKE OR INADVERTENCE OR IGNO RANCE OFFERED CERTAIN INCOME WHICH IS NOT TAXABLE, HE MAY BRING THIS TO THE NOTI CE OF THE ASSESSING AUTHORITY WHICH, IF SATISFIED, MAY GRANT HIM RELIEF AND REFUN D TAX PAID IN EXCESS, IF ANY. NOW IN OUR CONSIDERED OPINION IN THE PRESENT CASE ALSO THE RATIO EMANATING FROM THE 6 AFORESAID CASE LAW IS APPLICABLE. THE ASSESSEE HAS FILED A BELATED RETURN. IT HAS FOUND CERTAIN MISTAKES THEREIN. INCOMES WERE OFFERE D WHICH WERE NOT TAXABLE AND CERTAIN EXEMPTIONS AVAILABLE WERE NOT CLAIMED. THE INTIMATION OF THESE MISTAKES WAS DONE BY MEANS OF THE REVISED RETURN. HOWEVER, S UBSEQUENTLY PETITION FOR RECTIFICATION UNDER SECTION 154 WAS ALSO FILED. IN VIEW OF THE AFORESAID FACTS AND CASE LAW, IT IS INCUMBENT UPON THE REVENUE AUTHORIT IES TO CONSIDER THE VERACITY OF MISTAKES CLAIMED BY THE ASSESSEE AND GRANT REFUND I F ANY. BEFORE PARTING WE MAY ALSO POINT OUT THAT THE REVENUES PLANK IS THAT REC TIFICATION OF MISTAKE UNDER SECTION 154 CANNOT BE CONSIDERED SINCE THE ORIGINAL RETURN WAS A BELATED RETURN AND THE SAME IS NON EST. IF VIEWED FROM THIS POINT OF VIEW, PASSING AN ORDER UNDER SECTION 143(1) ON A NON EST RETURN ALSO CANNOT BE S AID TO BE PERMITTED AS PER LAW. 7. IN THE RESULT, WE REMIT THIS ISSUE TO THE FILE O F THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL CONSIDER THE ISSUE IN THE LIGHT OF ABOVE DIRECTIONS. NEEDLESS TO ADD THE ASSESSEE SHOULD BE GRANTED PROP ER OPPORTUNITY OF BEING HEARD. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH MAY, 2015. SD/- SD/ - (MUKUL K. SHRAWAT) (SHAMIM YAHYA) JUDICIAL MEMBER. ACCOUNTANT MEMBER NAGPUR, DATED: 8 TH MAY, 2015. 7 COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. T RUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, NAGPUR WAKODE