Income Tax Appellate Tribunal - Delhi
Asheesh Securities Ltd. vs Dy. Commissioner Of Income-Tax on 4 August, 2006
Equivalent citations: [2008]111ITD108(DELHI), [2008]297ITR317(DELHI), (2008)116TTJ(DELHI)70
ORDER
S.C. Tiwari, Accountant Member
1. This appeal has been filed by the assessee on 26th June, 2002 against the order of the learned Commissioner of Income-tax (Appeals)-II, New Delhi, dated 30th April, 2002 in the case of the assessee in relation to block assessment order under Section 158BC.
2. In this case the learned CIT(A) has dismissed the assessee's appeal before him as un-admitted in view of the provisions of Section 249(4)(a) Aggrieved the assessee is in appeal before us. Facts of the case in this respect briefly are that there was a search under Section 132 conducted at the office premises of the assessee on 15th December, 1999. Thereafter, the learned Assessing Officer served a notice under Section 158BC upon the assessee on 3rd March. 2001. In response the assessee filed its return of undisclosed income on 19th March, 2001 declaring undisclosed income at Rs. 1,46,000/-. However, the assessee did not paid any tax on this self-admitted undisclosed income. The Assessing Officer completed block assessment order under Section 158BC on 28 February, 2002 at total undisclosed income of Rs. 2,42,23,059/-. Aggrieved the assessee instituted an appeal before the learned CIT(A) on 28th February, 2002. The learned CIT(A) found that the assessee had not paid tax due on the returned undisclosed income in the block return on Form No. 2B. He therefore, issued a show cause notice dated 9thApril, 2002 to the assessee and asked him the reasons as to why the assessee's appeal should not be treated as infructuous in view of the provisions of Section 249(4). The assessee submitted that it had filed return of undisclosed income at Rs. 1,46,000/- under some confusion. Later on it was found that there was no undisclosed income because the same had already been declared in the regular books of account for assessment year 2000-01. The assessee submitted that on account of liquidity crunch it was not in a position to pay the taxes on the undisclosed income. The assessee prayed that in the name of natural justice and fair play the assessee's bona fide error should be ignored and exemption should be granted to the assessee from payment of any taxes. The learned CIT(A) held that the assessee had filed return of undisclosed income in Form No. 2B at Rs. 1,46,000/-. For maintenance of assessee's appeal before the CIT(A) the assessee was required to pay admitted tax before filing the appeal. The assessee had filed regular return of income for assessment year 2000-01 on 30th November, 2000 whereas the return under Section 158BC had been filed later on, on 19th March, 2001. On these facts there was no question of any confusion. The assessee had himself surrendered the sum of Rs. 1,46,000/- in his statement recorded at the time of search and thereafter in the return of undisclosed income filed under Section 158BC. There was no power given to the appellate authority for condoning such default on the part of the assessee when the return had been filed and the income had been declared therein. Based on this reasoning the learned CIT(A) dismissed the assessee's appeal as un-admitted.
3. During the course of hearing before us the learned AR of the assessee stated that the assessee had already informed the learned Assessing Officer during the course of assessment proceedings that the sum of Rs. 1,46,000/- had already been offered to tax during the course of regular assessment proceedings and the same had been mistakenly shown once again in the block return of undisclosed income. Thus the same amount had been offered to tax twice in the return filed by the assessee. The assessee had requested the Assessing Officer to ignore the inclusion of the amount in the block return. The learned Counsel argued that the assessee had already revised block return of undisclosed income under Section 158BC to nil amount and therefore, the learned CIT(A) was incorrect in holding that the assessee had not paid taxes on admitted income. In this respect we pointed out the recent judgment of Hon'ble Supreme Court in the case of Goetze (India) Ltd. v. CIT 284 ITR 323 (SC). It was pointed out that once a return of income had been filed, there was no provision under the Income-tax Act to make amendment in the return of income without revising the return. The learned Counsel for the assessee argued that unlike the provisions of Section 139(5) there was no analogous provision in Chapter XIV-B for revision of block return of undisclosed income filed under Section 158BC. That being so any mistake detected in the return for block assessment had to be clarified during the course of block assessment proceedings. This aspect had been brought to the notice of the Assessing Officer but the learned Assessing Officer in the impugned order under Section 158BC at page 18 had held that the contention of the assessee was without merit and the same was not verifiable from the seized books of account. The learned Counsel for the assessee argued that during the course of block assessment proceedings the assessee had already revised and retracted from the sum of Rs. 1,46,000/- included in the block return of undisclosed income. In support of this contention, the learned Counsel relied upon the decision of IT AT Nagpur Bench in the case of Deputy CIT v. Sanmukhdas Wadhwani reported in 85 ITD 734 (Nag). He also placed reliance on the judgment of Kerala High Court reported in 231 ITR 842. The learned Counsel also argued that the assessee had submitted before the CIT(A) that there was no admitted tax payable under Section 249(4). The learned CIT(A) had wide powers of condonation and even if he held that there was requirement to pay tax on the sum of Rs. 1,46,000/-, he should have granted the assessee an opportunity to make good this deficiency. The learned DR argued that in a case falling under Section 249(4)(a) there was no discretion vested in the learned CIT(A) and the provisions were mandatory. In support of this contention, he placed reliance on the decision of ITAT Mumbai reported in 82 ITD 512 (Mumb). He argued that the defect of nonpayment of tax on admitted income was incurable and therefore, the learned CIT(A) rightly dismissed the assessee's appeal.
4. The learned DR referred to the provisions of Section 158BC(b) and pointed out that by virtue of that provision the provisions of Section 143(2) applied. As per the provisions of Section 143(2) once a return of income had been filed, the Assessing Officer would issue notice if he considered it necessary to ensure that the assessee had not understated the income. Provisions of Section 143(2) or 158BC(b) applied in relation to understatement in the return of income and the same could not be utilized to reduce the income already returned. The learned DR argued that if there was no provision analogous to Section 139(5), in the provisions of Chapter XIV-B it meant that a return of income once filed, could not be revised by an assessee on subsequent occasion.
5. In his rejoinder the learned Counsel for the assessee argued that it was a well-settled legal position that during the course of assessment proceedings the assessee was entitled to show if there was any over statement of income in the books of account or return of income filed. He referred to the judgment of the Hon'ble Delhi High Court reported in 81 ITR 303 (Del) that the Assessing Officer has to consider taxability even if the assessee had himself included it in the return of income. He further referred to the judgment of the Hon'ble Supreme Court reported in 91 ITR 18 (SC) that if the assessee could show from the records that the admission of an income was erroneous, the admission made earlier was not binding upon the assessee. He referred to the judgment reported in 249 ITR 501 (Bom.) and argued that there was no bar on assessed income being at an amount lower than the returned income. Reference was made to Tribunal decision also reported in 77 ITD 522 (Pune) that if an income is not taxable, it could not be taxed merely because the assessee offered the same for assessment.
6. We have carefully considered the rival submissions. The judgment of Hon'ble Supreme Court in the case of Goetze (India) Ltd. has been delivered in the context of the provisions of Section 139. As far as the provisions of Chapter XIV-B are concerned, an assessee who has already made a return of undisclosed income under the provisions of Section 158BC is not entitled to file a revised return in view of the Second Proviso to Section 158BC. From that however, it does not follow that the Assessing Officer is bound to assess undisclosed income of the block period as per the return filed by the assessee under Section 158BC and additional amounts found by the Assessing Officer during the course of the proceedings. That is more so where the assessee contends that such income has already been assessed by way of regular assessment under Section 143(3). Provisions of Section 158BB(1)(a) call for exclusion of such an income from the computation of undisclosed income. The provisions of Section 158BA(3) also mandate non-inclusion of income already recorded in the books of account maintained in the normal course.
7. Further more Explanation (a) appended to Section 158BA(2) clarifies that the assessment made under Chapter XIV-B is in addition to the regular assessment in respect of any previous year included in the block period.
8. The combined affect of the provisions of Sections 158BA(3), 158BB(1)(a) and Explanation (a) to Section 158BA(2) is that what has already been included in a regular assessment under Section 143(3) cannot be included in the block assessment under Section 158BC. As to the case of the assessee before us this issue was raised by the assessee during the course of block assessment proceedings and the learned Assessing Officer did entertain this plea but on consideration he found that the contentions of the assessee in that behalf were not acceptable.
9. As the matter stands the assessee had submitted before the Assessing Officer that the income mistakenly shown in the return by the assessee under Section 158BC had already been assessed in the regular assessment under Section 143(3). Even if by virtue of the provisions of second Proviso to Section 158BC(a) the assessee was disentitled to file a revised return, the effect of assessee's submission was that the income admitted in the block return had already been assessed in regular assessment and for that reason could not be assessed under Section 158BC. We find that in the case of Goetze (India) Ltd. 284 ITR 323 (SC), the Hon'ble Supreme Court have made it clear that the judgment is limited to the power of the assessing authority and does not impinge on the power of the Income-tax Appellate Tribunal under Section 254 of the Act. In our view the same would apply to the power of the learned CIT(A) also under the provisions of Chapter XX-A of the Act. At any rate constructively it cannot be said that in the case of the assessee the tax on admitted income had not been paid inasmuch as and if the same had already been paid in pursuance to the regular assessment under Section 143(3). We have to be however, alive to the position of the learned Assessing Officer who considered these pleadings of the assessee on merit and has rejected the same. In this view of the matter, we restore this issue to the file of the learned CIT(A) with the directions that he would verify the contention of the assessee that undisclosed income as returned in the return of undisclosed income under Section 158BC had already been offered to assessment during the course of regular assessment proceedings under Section 143(3) and the tax thereon had already been paid before the assessee filed appeal against block assessment order before the learned CIT(A). If the learned CIT(A) finds answer to these questions in favour of the assessee, the taxes paid by the assessee in the regular assessment proceedings tantamount to tax already paid in relation to admitted income as per return filed under Section 158BC and therefore, the learned CIT(A) would be required to decide the assessee's various grounds of appeal on merit. If however, the learned CIT(A) finds the factual position otherwise, he would be entitled to dismiss the assessee's appeal un-admitted in view of the provisions of Section 249(4)(a) after discussing the facts of the case at length in a speaking order to be passed by him.
10. For statistical purposes this appeal shall be treated as allowed.
11. Pronounced in the Open Court on 4th August, 2006.