CHALET HOTELS LTD., MUMBAI V. DY CIT-CC-4(2), MUMBAI

MA 358/MUM/2022

AI Insights

The case involves Chalet Hotels Ltd., which filed a Miscellaneous Application seeking rectification/recall of an earlier Tribunal order concerning the assessment year 2016-17. The original return declared a loss, which was later revised following a search and seizure operation under section 132 of the Income-tax Act, 1961. The Tribunal's earlier decision did not allow the revised claims of capital loss, leading to the present application. The Tribunal, referencing the decision in JSW Steel Ltd., acknowledged that in cases of abated assessments, the returns filed under section 153A should be treated as regular returns, allowing new claims to be made.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123255 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 6 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 03-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 16-02-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 27-11-2022
• Other Referred Cases: PCIT v. JSW Steel Ltd., Commissioner of Income-tax v. Reliance Telecom Ltd., ACIT v. Saurashtra Kutch Stock Exchange Ltd.
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure
• Section: 132; 153A; 143(2); 139(1); 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “C” MUMBAI BEFORE SHRI KULDIP SINGH (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) MA No. 358/MUM/2022 (Arising out of ITA No. 1402/MUM/2021) Assessment Year: 2016-17 Chalet Hotels Limited, Raheja Tower, Plot No. C-30, Opp. SIDBI, Bandra Kurla Complex, Bandra (East), Mumbai-400051. Vs. Dy. Commissioner of Income Tax, Central Circle- 4(2), Room No. 1918, Air India Building, Nariman Point, Mumbai-400021. PAN No. AAACK 0411 E Appellant Respondent Assessee by : Mr. Madhur Agrawal & Mr. Manan Mathuria Revenue by : Mr. Chetan Kacha, DR Date of Hearing : 17/02/2023 Date of pronouncement : 04/05/2023 ORDER PER OM PRAKASH KANT, AM By way of this Miscellaneous Application, the assessee is seeking rectification/recall of the order of the Tribunal dated 14.06.2022 passed in ITA No. 1402/Mum/2021 for assessment year 2016-17. 2. Before us, the Ld. Counsel of the assessee submitted that in the case original/regular r of the Income-tax Act, 1961 (in short ‘the Act’) was filed on 17.10.2016 wherein loss of Rs.189,90,32,020/ Subsequently, a search and seizure action u/s 132 of the Act was carried out on 30.11.2017 a Act was issued on 04.07.2018 return of income on 14.07.2018 declaring loss of Rs.154,21,64,359/-. This claim included long term capital loss sale of shares of Rs.8,88,04,541/ further revised the return of income filed u/s 153A on 13.03.2019 wherein the assessee Rs.8,88,04,541/- and offered the same as Rs.57,74,866/-. The Ld. Counsel of the submitted that this loss from the sale of the shares was revised as shares of ‘Intime Properties Pvt. Ltd 35 ( thirty five) months and therefore eligible for short term capital loss only. The Ld. Counsel allowed either the claim of the original return of income u/s 153A or claim of loss’ filed in the revised return of income u/s 153A of the Act. According to him, the finding of the Tribunal are inconsistent with the finding of the Hon’ble Bombay High Court in the case of PCIT v. JSW Steel Ltd. (2020) 115 taxmann.com 165 (Bombay) wherein it is held that in case of abated assessment Before us, the Ld. Counsel of the assessee submitted that in the case original/regular return of income in terms of section 139(1) tax Act, 1961 (in short ‘the Act’) was filed on 17.10.2016 wherein loss of Rs.189,90,32,020/- Subsequently, a search and seizure action u/s 132 of the Act was carried out on 30.11.2017 and consequently notice u/s 153A of the Act was issued on 04.07.2018. In response, the assessee filed return of income on 14.07.2018 declaring loss of . This claim included long term capital loss of Rs.8,88,04,541/-. Subsequently, the assessee further revised the return of income filed u/s 153A on 13.03.2019 wherein the assessee revised the long term capital loss of and offered the same as short term capital loss of . The Ld. Counsel of the assessee before us submitted that this loss from the sale of the shares was revised as Intime Properties Pvt. Ltd’. were held only for months and therefore eligible for short term capital loss only. The Ld. Counsel submitted that the Tribunal has not allowed either the claim of the ‘long term capital loss original return of income u/s 153A or claim of ‘short term capital filed in the revised return of income u/s 153A of the Act. the finding of the Tribunal are inconsistent with Hon’ble Bombay High Court in the case of PCIT v. JSW Steel Ltd. (2020) 115 taxmann.com 165 (Bombay) wherein it is held that in case of abated assessment Chalet Hotels Ltd. 2 MA No. 358/M/2022 Before us, the Ld. Counsel of the assessee submitted that in eturn of income in terms of section 139(1) tax Act, 1961 (in short ‘the Act’) was filed on - was claimed. Subsequently, a search and seizure action u/s 132 of the Act was nd consequently notice u/s 153A of the the assessee filed return of income on 14.07.2018 declaring loss of . This claim included long term capital loss on equently, the assessee further revised the return of income filed u/s 153A on 13.03.2019, revised the long term capital loss of short term capital loss of assessee before us submitted that this loss from the sale of the shares was revised as . were held only for a period of months and therefore eligible for short term capital submitted that the Tribunal has not long term capital loss’ filed in the short term capital filed in the revised return of income u/s 153A of the Act. the finding of the Tribunal are inconsistent with Hon’ble Bombay High Court in the case of PCIT v. JSW Steel Ltd. (2020) 115 taxmann.com 165 (Bombay) wherein it is held that in case of abated assessment, the return of income filed u/s 153A has to be considered as regular return of income filed and thus it is open for the assessee to lodge a new claim in proceedings u/s 153A(1) original return of income. 2.1 According to the Ld. Counsel of the assessee of the decision of the Hon’ble Jurisdictional High Court rendered mistake of the law apparent from record and therefore same need to be rectified and order should be recalled. 3. The Ld. Departmental Representative (DR) on the contrary relied on the decision of the Hon’ble Supreme Court in the case of Commissioner of Income 133 taxmann.com 41 (SC) authorized to recall its order under the provision of section 254(2) of the Act. 4. We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. The Ld. Counsel of the assessee has referred to the decision of the Hon’ble Jurisdictional High Court in the case of JSW Steel Ltd. (supra) wherein it is held that in case of the abated assessment new/fresh claim made in the return of income filed u/s 153A of the Act is eligible for deduction. The relevant finding of the Hon’ble High Court is reproduced as under: 53A has to be considered as regular return of income filed and thus it is open for the assessee to lodge a new claim in proceedings u/s 153A(1), which was not claimed in his original return of income. According to the Ld. Counsel of the assessee, non of the decision of the Hon’ble Jurisdictional High Court rendered mistake of the law apparent from record and therefore same need to be rectified and order should be recalled. The Ld. Departmental Representative (DR) on the contrary lied on the decision of the Hon’ble Supreme Court in the case of Commissioner of Income-tax v. Reliance Telecom Ltd. 133 taxmann.com 41 (SC) and submitted that the Tribunal is not authorized to recall its order under the provision of section 254(2) of We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. The Ld. f the assessee has referred to the decision of the Hon’ble Jurisdictional High Court in the case of JSW Steel Ltd. (supra) wherein it is held that in case of the abated assessment new/fresh claim made in the return of income filed u/s 153A of the Act is igible for deduction. The relevant finding of the Hon’ble High Court is reproduced as under: Chalet Hotels Ltd. 3 MA No. 358/M/2022 53A has to be considered as regular return of income filed and thus it is open for the assessee to lodge a new which was not claimed in his non-considering of the decision of the Hon’ble Jurisdictional High Court has rendered mistake of the law apparent from record and therefore same need to be rectified and order should be recalled. The Ld. Departmental Representative (DR) on the contrary lied on the decision of the Hon’ble Supreme Court in the case of tax v. Reliance Telecom Ltd. reported 2021 and submitted that the Tribunal is not authorized to recall its order under the provision of section 254(2) of We have heard rival submission of the parties on the issue-in- dispute and perused the relevant material on record. The Ld. f the assessee has referred to the decision of the Hon’ble Jurisdictional High Court in the case of JSW Steel Ltd. (supra) wherein it is held that in case of the abated assessment new/fresh claim made in the return of income filed u/s 153A of the Act is igible for deduction. The relevant finding of the Hon’ble High “13. In the present case, search was conducted on the assessee on 30.11.2010. At that point of time assessment in the case of assessee for the assessment year 2008-09 was pending scrutiny since notice under Section 143(2) of the Act was issued and assessment was not completed. Therefore, in view of the second proviso to Section 153A of the said Act, once assessment got abated, it meant that it was open for both i.e. the assessee as well as revenue to make claims for allowance or to make disallowance, as the case may be, etc. That apart, assessee could lodge a new claim for deduction etc. which remained to be claimed in his earlier/ regular return of assessment was never made in the case of the assessee in such a situation. It is fortified that once the assessment gets abated, the original return which had been filed looses its originality and the subsequent return filed under Section 153A of the said Act (which is in consequence to the search action under Section 132) takes the place of the original return. In such a case, the return of income filed under Section 153A(1) of the said Act, would be construed to be one filed und 139(1) of the Act and the provisions of the said Act shall apply to the same accordingly. If that be the position, all legitimate claims would be open to the assessee to raise in the return of income filed under Section 153A(1). 4.1 In the case of the assessee claim of loss’/’short term capital loss Intime Properties Pvt. Ltd. (supra), as same was not filed section 139(1) of the Act. However, we find that the Hon’ble Jurisdictional High Court in the case of JSW Steel Ltd. (supra) has held that on account of abatement of assessment, the original return losses its origina 153A of the Act takes place of the original return and all legitimate 13. In the present case, search was conducted on the assessee on 30.11.2010. At that point of time assessment in the case of assessee for the assessment 09 was pending scrutiny since notice under Section 143(2) of the Act was issued and assessment was not completed. Therefore, in view of the second proviso to Section 153A of the said Act, once assessment got abated, it meant that it was open for both the parties, i.e. the assessee as well as revenue to make claims for allowance or to make disallowance, as the case may be, etc. That apart, assessee could lodge a new claim for deduction etc. which remained to be claimed in his earlier/ regular return of income. This is so because assessment was never made in the case of the assessee in such a situation. It is fortified that once the assessment gets abated, the original return which had been filed looses its originality and the subsequent return r Section 153A of the said Act (which is in consequence to the search action under Section 132) takes the place of the original return. In such a case, the return of income filed under Section 153A(1) of the said Act, would be construed to be one filed under Section 139(1) of the Act and the provisions of the said Act shall apply to the same accordingly. If that be the position, all legitimate claims would be open to the assessee to raise in the return of income filed under Section 153A(1). of the assessee claim of ‘long term capital short term capital loss’ on the sale of the shares of M/s Intime Properties Pvt. Ltd., has been rejected by the Tribunal as same was not filed in return of income in terms of he Act. However, we find that the Hon’ble Jurisdictional High Court in the case of JSW Steel Ltd. (supra) has held that on account of abatement of assessment, the original return losses its originality and the subsequent return takes place of the original return and all legitimate Chalet Hotels Ltd. 4 MA No. 358/M/2022 13. In the present case, search was conducted on the assessee on 30.11.2010. At that point of time assessment in the case of assessee for the assessment 09 was pending scrutiny since notice under Section 143(2) of the Act was issued and assessment was not completed. Therefore, in view of the second proviso to Section 153A of the said Act, once assessment the parties, i.e. the assessee as well as revenue to make claims for allowance or to make disallowance, as the case may be, etc. That apart, assessee could lodge a new claim for deduction etc. which remained to be claimed in his income. This is so because assessment was never made in the case of the assessee in such a situation. It is fortified that once the assessment gets abated, the original return which had been filed looses its originality and the subsequent return r Section 153A of the said Act (which is in consequence to the search action under Section 132) takes the place of the original return. In such a case, the return of income filed under Section 153A(1) of the said er Section 139(1) of the Act and the provisions of the said Act shall apply to the same accordingly. If that be the position, all legitimate claims would be open to the assessee to raise in the return of income filed under Section 153A(1).” long term capital on the sale of the shares of M/s rejected by the Tribunal return of income in terms of he Act. However, we find that the Hon’ble Jurisdictional High Court in the case of JSW Steel Ltd. (supra) has held that on account of abatement of assessment, the original lity and the subsequent return filed u/s takes place of the original return and all legitimate claims are therefore open to the raise in the return of income filed u/s 153A(1) of the Act. Since, in the case of the assessee the decision of the Jurisdictional High Court has not been considered which is a mistake of the law apparent from Hon’ble Supreme Court in the case of Stock Exchange Ltd. [2008] 173 Taxman 322 (SC) consideration of decision of the Jurisdictional High Court or Supreme Court is a mistake apparent from record and which can be rectified u/s 254(1) of the Act. Reliance Telecom Ltd. (supra) by the Ld. DR facts of the instant dated 14.06.2022 is recalled for deciding in the light of the of the Hon’ble Jurisdictional High Court in the case of JSW Steel Ltd. (supra). As both parties agreed to argue the main appeal , same was heard today itself 5. In the result, the Miscel allowed. Order pronounced in the open Court on Sd/ (KULDIP SINGH JUDICIAL MEMBER Mumbai; Dated: 04/05/2023 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant claims are therefore open to the raise in the return of income filed u/s 153A(1) of the Act. Since, in the case of the assessee the decision of the Jurisdictional High Court has not been considered h is a mistake of the law apparent from record Hon’ble Supreme Court in the case of ACIT v. Saurashtra Kutch Stock Exchange Ltd. [2008] 173 Taxman 322 (SC) consideration of decision of the Jurisdictional High Court or is a mistake apparent from record and which can be rectified u/s 254(1) of the Act. Thus, the ratio of in the case of Reliance Telecom Ltd. (supra) by the Ld. DR is not applicable in the facts of the instant case. Accordingly, the order of the Tribunal ed 14.06.2022 is recalled for deciding in the light of the of the Hon’ble Jurisdictional High Court in the case of JSW Steel As both parties agreed to argue the main appeal , same was heard today itself. In the result, the Miscellaneous Application of the assessee is nounced in the open Court on 04/05/2023. Sd/- KULDIP SINGH) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : Chalet Hotels Ltd. 5 MA No. 358/M/2022 claims are therefore open to the raise in the return of income filed u/s 153A(1) of the Act. Since, in the case of the assessee the decision of the Jurisdictional High Court has not been considered record as held by the ACIT v. Saurashtra Kutch Stock Exchange Ltd. [2008] 173 Taxman 322 (SC) that non- consideration of decision of the Jurisdictional High Court or is a mistake apparent from record and which can be he ratio of in the case of not applicable in the Accordingly, the order of the Tribunal ed 14.06.2022 is recalled for deciding in the light of the decision of the Hon’ble Jurisdictional High Court in the case of JSW Steel As both parties agreed to argue the main appeal , same laneous Application of the assessee is /05/2023. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// BY ORDER, (Assistant Registrar) ITAT, Mumbai Chalet Hotels Ltd. 6 MA No. 358/M/2022 BY ORDER, (Assistant Registrar) ITAT, Mumbai