M/s VBC Exports Ltd., Visakhapatnam V. The CIT, -, Visakhapatnam

ITA 616/VIZ/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0843 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 17-11-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBRATA SARKAR
• Keywords: Revised return
• Section: 143(3); 263

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH: VISAKHAPATNAM BEFORE: SRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SRI B.R. BASKARAN, ACCOUNTANT MEMBER I.T.A. NO 616/VIZAG/2008 ASSESSMENT YEAR : 2005-06 VBC EXPORTS LTD., VISAKHAPATNAM VS. CIT-II, VISAKHAPATNAM (APPELLANT) (RESPONDENT) PAN NO.AAACU 7329 L APPELLANT BY : SHRI G.V.N. HARI, CA RESPONDENT BY : SHRI SUBRATA SARKAR, CIT (DR) O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER : THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 13-10-2008 PASSED BY LD CIT-II VISAKHAPATNAM U/S 263 OF THE IN COME-TAX ACT DIRECTING THE AO TO RE-DO THE ASSESSMENT PASSED U/S 143(3) FOR TH E ASSESSMENT YEAR 2005-06. 2. AGGRIEVED BY THE ORDER PASSED BY LD CIT, THE ASS ESSEE IS IN APPEAL BEFORE US. 3. THE FACTS OF THE ISSUE ARE STATED IN BRIEF. THE RETURN OF INCOME FOR THE A.Y 2005-06 WAS FILED BY THE ASSESSEE BELATEDLY ON 1.09 .2006. HENCE THE RETURN CANNOT BE TREATED AS RETURN FILED U/S 139(1) OF THE ACT. SUBSEQUENTLY THE ASSESSEE FILED A REVISED RETURN OF INCOME ON 29-3-2 007. THEREAFTER THE AO COMPLETED THE ASSESSMENT U/S 143(3) BY CONSIDERING THE REVISED RETURN OF INCOME ALSO. THE LD CIT FOUND THAT THE REVISED RETU RN FILED BY THE ASSESSEE WAS NOT A VALID RETURN SINCE THE ASSESSEE HAD NOT FILED ITS ORIGINAL RETURN OF INCOME U/S 139(1) OF THE ACT. SINCE THE AO HAD ACTED UPON THE REVISED RETURN, WHICH IS 2 CONSIDERED AS INVALID, THE LD CIT FELT THAT THE SAI D ASSESSMENT IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. ACCORDI NGLY THE LD CIT, AFTER HEARING THE ASSESSEE, SET ASIDE THE ASSESSMENT ORDER WITH A DIRECTION TO THE AO TO RE-DO THE ASSESSMENT AS PER THE PROVISIONS OF THE ACT. 4. THE CONTENTION OF THE ASSESSEE IS THAT THE AO HAS TO CONSIDER ALL THE DOCUMENT ON RECORD WHILE COMPLETING THE ASSESSMENT. ACCORDING TO LD AR, THE AO HAS TAKEN INTO ACCOUNT ONLY THE DISCLOSURES MADE IN THE REVISED RETURN AND HENCE IT SHOULD NOT BE PRESUMED THAT THE AO HAS ACT ED UPON THE SAID REVISED RETURN. ON THE CONTRARY THE LD DR SUPPORTED THE OR DER PASSED BY THE LD CIT BY SUBMITTING THAT THE ASSESSEE COULD NOT REVISE A RET URN OF INCOME WHICH WAS NOT FILED U/S 139(1) OF THE ACT. 5. WE HAVE HEARD THE PARTIES AND CAREFULLY PERU SED THE RECORD. IT IS WELL SETTLED PROPOSITION THAT IN ORDER TO INVOKE THE PRO VISIONS OF SEC.263, IT HAS TO BE SHOWN THAT AN ASSESSMENT ORDER SHOULD NOT ONLY BE E RRONEOUS BUT ALSO PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THUS I T SHOULD BE SHOWN THAT THE TWIN CONDITIONS STIPULATED IN SECTION 263 IS SATISFIED. IN THIS REGARD USEFUL REFERENCE CAN BE MADE TO THE DECISION OF THE HONBLE SUPREME COURT I THE CASE OF MALABAR INDUSTRIAL COMPANY VS. CIT (2000) 243 ITR 83 (SC). IN THE INSTANT CASE THE REVISED RETURN OF INCOME FILED BY THE ASSESSEE MAY NOT BE IN ACCORDANCE WITH THE LAW. HENCE THE AO MIGHT HAVE COMMITTED AN ERROR IN CONSIDERING THE SAID REVISED RETURN. BEFORE GOING INTO THE ISSUE WHETHE R THE AO HAS ACTUALLY ACTED UPON THE REVISED RETURN OR NOT, ON A CAREFUL PERUSA L OF THE ORDER OF LD CIT, WE NOTICE THAT THE LD CIT HAS NOT SHOWN HOW THE IMPUGN ED ASSESSMENT ORDER WAS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE L D CIT(A) HAS NOT FOUND FAULT WITH THE QUANTUM OF ASSESSMENT, BUT FOUND FAULT WIT H THE ACTION OF THE AO IN CONSIDERING THE REVISED RETURN OF INCOME. THUS TH E LD CIT HAS FAILED TO SHOW THAT TWIN CONDITIONS SPECIFIED U/S 263 CO-EXISTED I N THE INSTANT CASE. IN VIEW OF THE FOREGOING, WE ARE OF THE VIEW THAT THE LD CIT C OULD NOT HAVE INVOKED THE 3 PROVISIONS OF SEC.263. ACCORDINGLY, WE REVERSE THE IMPUGNED ORDER PASSED BY LD CIT U/S 263 OF THE ACT. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED. PRONOUNCED ACCORDINGLY ON 3 RD MAY, 2010. SD/- SD/- (SUNIL KUMAR YADAV) (B.R. BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM DATE : 03-05-2010. A COPY OF THIS ORDER IS FORWARDED TO : 01 M/S V.B.C. EXPORTS LIMITEDA-4 UNIT, INDUSTRIAL E STATE, VISAKHAPATNAM 530007 02 THE ACIT, CIRCLE-4(1), VISAKHAPATNAM 03 THE ADD. CIT, RANGE-4, VISAKHAPATNAM 04 THE CIT-II, VISAKHAPATNAM 05 THE DR, ITAT, VISAKHAPAATNAM 06 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY ITAT, VISAKHAPATNAM BENCH