M/s Kewal Engineering Pvt. Ltd., Bangalore V. ITO, Bangalore

ITA 628/BANG/2015

• Counselvise Citation: 62821114 RSA 2015
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 21-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL KUMAR AGARWALA JT
• Assessee Lawyers: S RAMASUBRAMANIAN
• Keywords: Opportunity of being heard; Earning of tax free income; Revised return
• Section: 14A; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ITA NO. 628/BANG/2015 ASSESSMENT YEAR : 2010-11 M/S. KEWAL ENGINEERING PVT. LTD., (FORMERLY KABU ENGG. LTD.), NO.21-A, KUMBALGOD INDUSTRIAL AREA, PHASE I, BANGALORE 560 074. PAN: AACCK 0086D VS. THE INCOME TAX OFFICER, WARD 11(2), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI S. RAMASUBRAMANIAN, CA RESPONDENT BY : SHRI SUNIL KUMAR AGARWALA, JT. CIT(DR) DATE OF HEARING : 04.08.2015 DATE OF PRONOUNCEMENT : 14.08.2015 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER D ATED 10.3.2015 OF THE CIT(APPEALS)-IV, BANGALORE RELATING TO ASSESSME NT YEAR 2010-11. ITA NO.628/BANG/2015 PAGE 2 OF 4 2. THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINES S OF MANUFACTURE OF TOOLS & DYES AND MACHINED COMPONENTS . FOR AY 2010-11, ASSESSEE FILED RETURN OF INCOME DECLARING A LOSS OF RS.18,51,842. DURING THE PREVIOUS YEAR, ASSESSEE RECEIVED DIVIDEND INCOM E OF RS.7,99,422, BUT THE SAME WAS EXEMPT U/S. 10 OF THE ACT. THE ASSESS EE FILED REVISED COMPUTATION IN THE COURSE OF ASSESSMENT PROCEEDINGS CLAIMING DIVIDEND INCOME AS EXEMPT AND ALSO OFFERED A DISALLOWANCE OF EXPENSES INCURRED IN EARNING EXEMPT INCOME U/S. 14A OF THE ACT OF A SUM OF RS.83,639. 3. THE ASSESSING OFFICER DID NOT CONSIDER THE REVIS ED COMPUTATION OF TOTAL INCOME FILED BY THE ASSESSEE AND DOING SO, FO LLOWED THE JUDGMENT OF THE HONBLE SUPREME COURT IN GOETZE INDIA LTD. V. CIT, 284 ITR 323 (SC) , WHEREIN IT WAS HELD THAT THE ASSESSING OFFICER CANN OT CONSIDER ANY CLAIM IN THE ABSENCE OF A VALID REVISED RETURN FILED BY THE ASSESSEE. 4. BEFORE THE CIT(APPEALS), THE ASSESSEE POINTED OU T THE RESTRICTION IMPOSED IN THE DECISION OF THE HONBLE SUPREME COUR T IN GOETZE INDIA LTD. (SUPRA) WAS APPLICABLE ONLY TO THE ASSESSING OFFICER AND N OT TO THE APPELLATE AUTHORITY UNDER THE ACT. THE CIT(APPEALS ) WAS OF THE VIEW THAT REFERENCE TO THE APPELLATE AUTHORITY IS ONLY TO THE TRIBUNAL IN THE AFORESAID JUDGMENT AND THEREFORE EVEN HE COULD NOT ENTERTAIN A REVISED COMPUTATION OF INCOME AND THAT THE REVISED RETURN OUGHT TO HAVE BEEN FILED BY THE ASSESSEE. ITA NO.628/BANG/2015 PAGE 3 OF 4 5. AGGRIEVED BY THE AFORESAID ORDER OF THE CIT(APPE ALS), THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNA L. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE HONBL E SUPREME COURT IN GOETZE INDIA LTD. (SUPRA) IN PARA 4 OF ITS JUDGMENT OBSERVED AS FOLLOWS:- 4. THE DECISION IN QUESTION IS THAT THE POWER OF THE TRIBUNAL UNDER SECTION 254 OF THE INCOME-TAX ACT, 1961, IS T O ENTERTAIN FOR THE FIRST TIME A POINT OF LAW PROVIDED THE FACT ON THE BASIS OF WHICH THE ISSUE OF LAW CAN BE RAISED BEFORE THE TRI BUNAL. THE DECISION DOES NOT IN ANY WAY RELATE TO THE POWER OF THE ASSESSING OFFICER TO ENTERTAIN A CLAIM FOR DEDUCTION OTHERWIS E THAN BY FILING A REVISED RETURN. IN THE CIRCUMSTANCES OF THE CASE, WE DISMISS THE CIVIL APPEAL. HOWEVER, WE MAKE IT CLEAR THAT THE I SSUE IN THIS CASE IS LIMITED TO THE POWER OF THE ASSESSING AUTHORITY AND DOES NOT IMPINGE ON THE POWER OF THE INCOME-TAX APPELLATE TR IBUNAL UNDER SECTION 254 OF THE INCOME-LAX ACT, 1961. THER E SHALL BE NO ORDER AS TO COSTS. 7. A PERUSAL OF THE AFORESAID OBSERVATION OF THE HO NBLE SUPREME COURT MAKES IT ABUNDANTLY CLEAR THAT THE TRIBUNAL HAS THE POWER TO ENTERTAIN A CLAIM DE HORS REVISED RETURN OF INCOME. THE CLAIM OF ASSESSEE RE QUIRES EXAMINATION BY THE AO AND THEREFORE, WE SET ASIDE T HE ORDER OF CIT(APPEALS) ON THIS ISSUE AND REMAND THE ISSUE TO THE ASSESSING OFFICER FOR FRESH CONSIDERATION IN ACCORDANCE WITH LAW, AFT ER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ITA NO.628/BANG/2015 PAGE 4 OF 4 8. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 14 TH DAY OF AUGUST, 2015. SD/- SD/- ( ABRAHAM P. GEORGE ) ( N.V. VASU DEVAN ) ACCOUNTANT MEMBER JUDICIAL M EMBER BANGALORE, DATED, THE 14 TH AUGUST, 2015. /D S/ COPY TO: 1. APPELLANT 2. RESPONDENTS 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR / SENIOR PRIVATE SECRETARY ITAT, BANGALORE.