SMT. VANDANA JAIN, JAIPUR V. INCOME TAX OFFICER, WARD-2-1, JAIPUR

ITA 915/JPR/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6157 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 01-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P P MEENA JCIT DR DHK
• Keywords: Revised return; Reason to believe
• Section: 139(5); 147; 148; 139

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,O JH HKKXPUN] YS[KK LNL; LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, AM VK;DJ VIHY LA-@ ITA NO. 915/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR: 2008-09 SMT. VANDANA JAIN PROP. M/S. VANDANA JEWELLERS 1847, CHOBIYON KA CHOWK GHEE WALO KA RASTA, JAIPUR CUKE VS. THE ITO WARD- 2(1) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ACLPJ 2647 P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI P.C. PARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY:SHRI P.P. MEENA, JCIT - DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 02/05/2018 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 8 /05/2018 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A)-I, JAIPUR DATED 05-09-2017 FOR THE ASSESSMEN T YEAR 2008-09 RAISING THEREIN FOLLOWING GROUNDS OF APPEAL. 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW I N UPHOLDING THE VALIDITY OF THE ORDER PASSED BY AO U/ S 147 OF THE I.T. ACT, 1961. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE FINDINGS OF THE AO THAT SECOND BELAT ED RETURN FILED ON 17-11-2009 IS AN INVALID RETURN. ITA NO.915/JP/2017 SMT. VANDAN A JAIN VS ITO, WARD- 2(1) ,JAIPUR 2 2.1 APROPOS GROUND NO. 1 AND 2 OF THE ASSESSEE, THE FACTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) ARE AS UNDER:- 3.1.2. DETERMINATION (I) THE BRIEF FACTS OF THE CASE ARE THAT IN THE INS TANT CASE UNDER CONSIDERATION, THE DUE DATE OF FILING OF RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION I .E. A.Y. 2008-09 WAS 31-07-2008, WHEREAS THE RETURN OF INCOME WAS FILED BY THE APPELLANT ON 26-02-2009 DECLARING TOTAL INCOME AT RS. 1,10,460/- I.E. THE S AID RETURN WAS A BELATED RETURN AND FILED U/S 139(4) OF THE ACT. SUBSEQUENTLY, ON 17-11-2009, THE APPELLANT HAS FILED ANOTHER RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION DECLARING TOTAL INCOME AT RS. 5,50,29 0/-. THE SECOND RETURN FILED BY THE APPELLANT WAS TREATE D AS AN INVALID RETURN BY THE AO BY OBSERVING THAT A BELATED RETURN CANNOT BE REVISED U/S 139(5) OF THE ACT. DURING THE APPELLATE PROCEEDINGS, IT WAS CONTENTION OF THE APPELLANT THAT THERE WAS NO PROVISION IN THE L AW WHICH DEBARRED AN ASSESSEE FROM FILING A SECOND BELATED RETURN AND THUS, THE SECOND RETURN OF INCOM E FILED ON 17-11-2009 IS A VALID BELATED RETURN OF INCOME. IN SUPPORT OF ITS CONTENTION, THE APPELLANT HAS RELIED UPON THE CASES OF N.C.E. (P) LTD VS ACIT (SUPRA) AND ITO VS SMT. SHAKUNTALA GERA (SUPRA). (II) I HAVE DULY CONSIDERED THE SUBMISSIONS OF THE APPELLANT, ASSESSMENT ORDER AND THE MATERIAL PLACED ON RECORD AND I DO NOT FIND ANY MERIT IN THE CONTENTIO N OF THE APPELLANT. IT MAY BE MENTIONED THAT IN THE CASE OF VIMALCHAND VS CIT [1985] 155 ITR 593 (RAJASTHAN), IT WAS HELD BY THE HON'BLE HIGH COURT OF RAJASTHAN THAT:- ACCORDING TO IT, THE ASSESSMENT ON THE RETURN FIL ED UNDER S. 139(4) SHOULD HAVE BEEN COMPLETED BY MARCH 31, ITA NO.915/JP/2017 SMT. VANDAN A JAIN VS ITO, WARD- 2(1) ,JAIPUR 3 1974, WHICH ADMITTEDLY WAS NOT DONE AS THE ASSESSME NT ORDER IN THE CASE OF THE FIRM WAS PASSED ON OCTOBER 10, 1 974 AND IN THE CASE OF THE PARTNERS ON NOVEMBER 6, 1974. THUS THE ASSESSMENT ORDER PASSED ON OCTOBER 10, 1974 AND NOV EMBER 6, 1974, ARE A NULLITY IN THE EYE OF LAW AND THEY ARE NON EST, FOR, NO COGNIZANCE COULD BE TAKEN UNDER S. 139(5) OF THE RETURN THAT WAS FILED UNDER S. 139(4) OF THE ACT. (EMPHASIS S UPPLIED) (III) IT MAY FURTHER BE MENTIONED THAT THE ABOVE FINDINGS WERE APPROVED BY THE HON'BLE APEX COURT I N THE CASE OF KUMAR JAGDISH CHANDRA SINHA [1996] 86 TAXMAN 122 (SC), WHEREIN IT WAS HELD THAT:- ACCORDING TO SUB-SECTION (5) OF SECTION 139 ANY PERSON HAVING FURNISHED A RETURN UNDER SUB-SECT ION (1) OR SUB-SECTION (2) MAY FURNISH A REVISED RETURN AT ANY TIME BEFORE THE ASSESSMENT IS MADE IF HE DISCOVERS ANY OMISSION OR ANY WRONG STATEMENT OF THE ORIGINAL RETURN. THE VERY FA CT THAT THIS RIGHT IS GIVEN TO A PERSON WHO HAS FILED A RETURN U NDER SUB- SECTION (1) OR SUB-SECTION (2) OF SECTION139 MEANS BY NECESSARY IMPLICATION THAT SUCH A RIGHT IS DENIED TO A PERSON WHO FILES THE RETURN UNDER SECTION 139(4). (EMPHASIS SUPPLIED) THEREFORE, IN VIEW OF THE ABOVE DISCUSSION, IT IS HELD THAT THE AO WAS JUSTIFIED IN TREATING THE SECO ND BELATED RETURN OF INCOME AS AN INVALID RETURN OF INCOME. (IV) IT MAY BE MENTIONED THAT IN THE BELATED RETURN OF INCOME FILED ON 26-02-2009, THE APPELLANT HAS NOT DECLARED SHORT TERM CAPITAL GAIN ON SALE OF PROPERT Y WHEREAS IN THE RETURN OF INCOME FILED ON 17-11-2009 , THE APPELLANT HAS DECLARED SHORT TERM CAPITAL GAIN ON SALE OF PROPERTY BY CONSIDERING THE SALE CONSIDERAT ION AT RS. 5,90,129/-.IT WAS THE CONTENTION OF THE APPE LLANT THAT THE AO HAS ISSUED NOTICE U/S 148 OF THE ACT BY ASSUMING THAT NO RETURN OF INCOME DECLARING SHORT TERM CAPITAL GAINS WAS FILED AS IT FILED THE SAME O N 17- 11-2009. THIS CONTENTION OF THE APPELLANT IS DEVOID OF ANY MERIT AS IT HAS ALREADY BEEN HELD THAT THE SECO ND ITA NO.915/JP/2017 SMT. VANDAN A JAIN VS ITO, WARD- 2(1) ,JAIPUR 4 BELATED RETURN OF INCOME FILED ON 17-11-2009 IS INVALID RETURN OF INCOME IN THE EYES OF LAW AND THU S NO COGNIZANCE COULD BE GIVEN TO IT. IT IS, THEREFORE, HELD THAT THE AO HAS INITIATED PROCEEDINGS U/S 147 OF TH E ACT IN A LAWFUL MANNER. THEREFORE, THE ASSESSMENT MADE BY THE AO DO NOT SUFFER FROM ANY LEGAL INFIRMITY. THEREFORE, BOTH THE GROUNDS OF APPEAL ARE HEREBY REJECTED. 4. IN THE RESULT, THE APPEAL IS DISMISSED. 2.2 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE PRAYED THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING THE VALIDITY OF THE ORDER PASSED BY THE AO U/S 147 OF THE ACT AND ALSO ERRED IN CONFIRM ING THE FINDINGS OF THE AO THAT SECOND BELATED RELATED FILED ON 17-11-2009 IS AN INVALID RETURN. 2.3 ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORD ER OF THE LD. CIT(A). 2.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN THIS CASE IS WHET HER AN INCOME WHICH IS ALREADY DECLARED IN THE BELATED RETURN FILED BY THE ASSESSEE CAN BE SUBJECT TO REASSESSMENT U/S 148. TO APPRECIATE THE ISSUE, I T WOULD BE RELEVANT TO CONSIDER THE FOLLOWING DATES RELEVANT TO THE ISSUE: - ITA NO.915/JP/2017 SMT. VANDAN A JAIN VS ITO, WARD- 2(1) ,JAIPUR 5 S. NO. PARTICULARS DATE INCOME DECLARED/ASSESSED 1. DUE DATE OF FILING OF RETURN 31.07.2008 - 2. DATE OF FILING OF RETURN [U/S 139(4)] 26.02.2009 RS.1,10,460/- 3. DATE OF FILING OF SECOND BELATED RETURN 17.11.2009 RS.5,50,290/- 4. DATE OF ISSUE OF NOTICE U/S 148 26.03.2015 - 5. DATE OF ORDER U/S 143(3)/148 31.12.2015 RS.5,50,290/- FROM THE ABOVE FACTS AND DATES, IT IS NOTED THAT A SSESSEE IN HIS SECOND BELATED RETURN FILED ON 17.11.2009 (PB 3-8) HAS DECLARED INCOME OF RS.5,50,290/-. THE FACT OF FILING THIS RETURN WAS A LSO INTIMATED TO ITO, WARD-2(1), JAIPUR VIDE LETTER DATED . 17.11.2009 (PB 12) IN RESPONSE TO HIS LETTER DATED 06.11.2009 (PB 11) AND TO ITO, WARD-1(1), JAIPUR VIDE LETTER DATED 25.01.2010 (PB 16) IN RESPONSE TO HIS LETTER DATED 12.01.2010 (PB 15) . IT IS FURTHER NOTED THAT IN THE SECOND BELATED RE TURN FILED ON 17.11.2009, THE ASSESSEE HAS DECLARED SHORT TERM CA PITAL GAIN ON SALE OF PROPERTY BY CONSIDERING THE SALES CONSIDERATION AT RS.5,90,129/- (BEING, SHARE OF RS.11,80,258/-) WHEREAS THE REASONS FOR RE OPENING OF ASSESSMENT U/S 148 (PB 9-10) IS THAT CAPITAL GAIN INCOME ON SALE OF PROPERTY OF RS.11,80,258/- HAS ESCAPED ASSESSMENT IN AS MUCH AS ASSESSEE HAS NOT FILED THE RETURN FOR AY 2008-09. THESE FACTS SHOWS THAT NOTICE U/S 148 IS ISSUED WITHOUT VERIFICATION OF RECORDS AND THEREFOR E SUCH NOTICE IS NOT VALID IN THE EYES OF LAW PARTICULARLY WHEN THE INCO ME WHICH IS STATED TO ITA NO.915/JP/2017 SMT. VANDAN A JAIN VS ITO, WARD- 2(1) ,JAIPUR 6 HAVE ESCAPED ASSESSMENT HAS ALREADY BEEN DISCLOSED TO THE DEPARTMENT BY FILING THE RETURN OF INCOME. IT IS PERTINENT TO MEN TION THAT NOTICE U/S 148 CAN BE ISSUED ONLY WHEN AO HAS REASON TO BELIEVE TH AT INCOME HAS ESCAPED ASSESSMENT. AN INCOME CAN BE SAID TO HAVE E SCAPED ASSESSMENT IF IT IS NOT DECLARED IN THE RETURN FILED BEFORE THE A O. IN THE PRESENT CASE, THE INCOME WHICH IS STATED TO HAVE ESCAPED ASSESSMENT H AS BEEN DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME FILED ON 17.11 .2009. THE RETURN SO FILED IS A VALID BELATED RETURN AS SUCH RETURN U/S 139(4) CAN BE FURNISHED AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT AY OR BEFORE THE COMPLETION OF ASSESSMENT WHICHEVER IS EA RLIER. THUS, THE TIME AVAILABLE FOR FILING THE BELATED RETURN WAS UPTO 31 .03.2010 WHEREAS THE RETURN WAS FILED ON 17.11.2009. THIS IS ONLY A RECT IFIED RETURN AND NOT A REVISED RETURN. THE AO COULD HAVE ISSUED NOTICE U/S 143(2) FOR SCRUTINISING THIS RETURN BY 30.09.2010, I.E. WITHIN 6 MONTHS FROM THE END OF THE FY IN WHICH RETURN IS FILED. THERE IS NO PRO VISION IN THE LAW WHICH DEBARRED AN ASSESSEE FROM FILING A SECOND BELATED R ETURN. IN CASE OF N.C.E. (P) LTD. VS. ACIT 65 ITD 214 (KOL.) (TRIB.), IT IS HELD THAT THOUGH NO REVISED RETURN UNDER S. 139(5) CAN BE FIL ED WHERE ORIGINAL RETURN WAS FILED UNDER S. 139(4) BUT IN SUCH A CASE , REVISED RETURN SO FILED ITA NO.915/JP/2017 SMT. VANDAN A JAIN VS ITO, WARD- 2(1) ,JAIPUR 7 MAY BE TREATED AS SECOND RETURN OR LATEST RETURN UN DER S. 139(4). THUS, THE RETURN FILED ON 17.11.2009 IS A VALID BELATED RETUR N IN WHICH INCOME FROM CAPITAL GAIN HAS BEEN DECLARED BY THE ASSESSEE. THE REFORE, AN INCOME WHICH IS ALREADY DECLARED BY THE ASSESSEE IN A VALI D RETURN OF INCOME CANNOT BE SUBJECT MATTER OF REASSESSMENT U/S 147. I N THESE CIRCUMSTANCES, THE NOTICE ISSUED U/S 148 IS ILLEGAL AND BAD IN LAW . IN FIRST APPEAL, THE LD. CIT(A) HAS NOT ACCEPTED THE CONTENTION OF ASSESSEE FOR THE REASON THAT SECOND BELATED RETURN FILED BY THE ASSESSEE IS INVA LID RETURN OF INCOME BY RELYING ON THE DECISION OF HON'BLE SUPREME COURT IN CASE OF KUMAR JAGDISH CHANDRA SINHA 220 ITR 67. IN THIS CASE THE HONBLE SUPREME COURT WITH REFERENCE TO THE REVISED RETURN AND THE RECTIFIED RETURN HAS MADE THE FOLLOWING OBSERVATION AT PAGE 75 OF THE OR DER:- THE HIGH COURT HAS DRAWN A DISTINCTION BETWEEN A R EVISED RETURN AND A RECTIFIED RETURN. MAY BE, THERE IS A DISTINCTION. WE ARE NOT CONCERNED HERE WITH A RECTIFIED RETURN BUT WHAT WAS AVOWEDLY A REVISED RETURN AND W HICH WAS IN TRUTH A NEW RETURN. THUS, THE HONBLE SUPREME COURT HAS ONLY STATED THA T A BELATED RETURN U/S 139(4) CANNOT BE REVISED. HOWEVER, THERE IS NO EMBA RGO THAT A BELATED RETURN CANNOT BE RECTIFIED OR A SECOND BELATED RETU RN CANNOT BE FILED WITHIN THE TIME AVAILABLE FOR FILING THE BELATED RETURN. S IMILARLY, THE DECISION OF RAJASTHAN HIGH COURT IN CASE OF VIMAL CHAND VS. CIT 155 ITR 593 ITA NO.915/JP/2017 SMT. VANDAN A JAIN VS ITO, WARD- 2(1) ,JAIPUR 8 RELIED BY CIT(A) IS NOT RELEVANT TO DECIDE THE ISSU E UNDER CONSIDERATION. THEREFORE, THE SECOND BELATED RETURN, WHICH IS A RE CTIFIED RETURN CANNOT BE HELD TO BE INVALID AND CONSEQUENTLY, AN INCOME WHIC H IS ALREADY DECLARED IN SUCH RETURN CANNOT BE CONSIDERED AS AN INCOME ES CAPING ASSESSMENT SO AS TO INVOKE THE JURISDICTION U/S 147. IN VIEW OF T HE ABOVE DELIBERATIONS, IT IS HELD THAT THE ORDER PASSED BY THE AO U/S 148/143 (3) IS ILLEGAL AND THEREFORE, THE SAME IS QUASHED. THUS THE APPEAL OF THE ASSESSEE IS ALLOWED. 4.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08-05-2018 . SD/- SD/- FOT; IKY JKO HKKXPUN (VIJAY PAL RAO) ( BHAGCHAND) U;KF;D LNL; / JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 8/05/ 2018 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. VANDANA JAIN, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- 2(1), JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.915/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR