Income Tax Appellate Tribunal - Ahmedabad
Redex Protech Ltd.,, Ahmedabad. vs Department Of Income Tax
1
IN THE INCOME TAX APPELLATE TRIBUNAL,
B-BENCH, AHMEDABAD.
Before: Shri T K Sharma, Judicial Member, and
Shri D.C.Agrawal, Accountant Member.
ITA No.824/Ahd/2004
(Assessment Year 1996-1997)
Assistant Commissioner of Versus Redex Protech Ltd.
Income Tax, A/5, Jayamangal House,
Circle-5, Opportunity. Gandhigram Rly.
Ahmedabad. Station, Ashram Road,
Ahmedabad.
(Appellant) (Respondent)
PAN: 31-118-CQ-9688
For the appellant: Smt. Smt. Stuiti Samrat, Sr. DR
For the respondent S N Soparkar and P M Mehta
ORDER
Per D C Agrawal (Accountant Member): This appeal filed by the Revenue is against the order of the Ld. Commissioner of Income Tax(Appeals) dated 29-12-2003 raising following grounds:-
"1. The Ld. Commissioner of Income Tax(Appeals)-XI has erred in law and on facts in directing the Assessing Officer to consider the revised return.
2. The Ld. Commissioner of Income Tax(Appeals)-XI has erred in law and on facts in not considering the fact that the revised return filed on 30.3.1998 was not a valid return as the original return filed on 30.7.1997 was neither a return u/s 139(1) nor U/s 142(1) of the I.T. Act.
3. The Ld. Commissioner of Income Tax(Appeals)-XI has erred in law and on facts in law and on facts in not appreciating the fact that the return filed on 30.7.1997 was based on duly audited A/cs and hence there was no omission and mistake.
4. On the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax(Appeals)-XI, Ahmedabad ought not to have issued the direction to consider the revised return."2 ITA No.824/Ahd/2004
(Assessment Year 1996-1997)
2. The main issue involved in the appeal is whether return filed by the assessee on 30-03-1998 declaring loss of Rs. 34,48,576/- should be treated as valid return and accordingly the benefit of loss claimed by the assessee can be allowed. The facts of the case are that the assessee had filed original return on 30-07-1997 declaring nil income. Thereafter it filed the revised return on 30-03-1998 declaring a loss of Rs. 34,48,576/-. In the revised return assessee appended a note making following claims.
"(a) Unabsorbed depreciation of the current year amounts to Rs.
18,72,848/- be allowed to be carried forward.
(b) Gross total income is 'Nil' as available deduction U/s. 80IA is not claimed.
(c) Qualifying donations to approved donations is Rs. 68,350/-.
(d) Revised income was being filed due to certain unexpected development that had taken place during the course of asstt. Proceedings for A.Y. 1995-96 and upon realization of true and correct portion of the Company's affairs at that time."
3. The Assessing Officer gave certain opportunities to the assessee to explain the original as well as revised return. There was no compliance from the assessee even though his representative has sought adjournments on some hearings. The manager of the assessee, i.e. . Shri. Ashok Nayak had filed certain details vide his letter dated 10-02-1999, but the further details as sought by the Assessing Officer were not filed. In absence of complete details, the Assessing Officer proceeded to make ex-parte assessment under section 144. In the ex-parte assessment, the Assessing Officer restricted the claim of depreciation of Rs. 88,35,358/- to Rs. 45,78,894/-. While doing so, the Assessing Officer rejected the claim of depreciation on addition to machinery amounting to Rs. 41,47,183/-
3 ITA No.824/Ahd/2004(Assessment Year 1996-1997) and allowed depreciation on the assets on the basis of their W.D.B. as on 01-04-1995.
4. Regarding claim of loss made in the revised return the Assessing Officer observed that the original return was filed by the assessee to influence the shareholders by presenting respectable affairs of the company with intention to bring right issue. Since the plan did not materialize, the assessee got the accounts audited through the team of accountants and worked out actual figures of loss which was declared in the revised return. The Assessing Officer, however, rejected these claims by holding that the particulars given by the assessee to Company Law Board, SEBI, Registrar of Companies etc. and on the basis of which original return was filed on 30/07/1997 should be treated as correct.
5. The Ld. Commissioner of Income Tax(Appeals) rejected the arguments of the Assessing Officer in not considering the revised return and directed him to consider the same and recompute the total income for that year. The arguments advanced by Ld. Commissioner of Income Tax(Appeals) were that the real income should be assessed. He further observed that in the assessment year 94-95, the Ld. Commissioner of Income Tax-III Ahmedabad, in the revision proceedings under section 264 of the Act, appreciated the claim of the assessee and gave necessary directions to the Assessing Officer for accepting the claim of loss and depreciation. Thus, if CIT can direct the Assessing Officer to assess the correct income, then Assessing Officer in the assessment year 1996-97 could also compute income as per revised return which reflected real income..
6. The revenue has not now challenged these directions of the Ld. Commissioner of Income Tax(Appeals). Learned D.R. submitted that 4 ITA No.824/Ahd/2004 (Assessment Year 1996-1997) original return filed on 30/07/1997 was neither under section 139(1) nor under section 142(1). Therefore, assessee has no right to file revised return. The Learned DR relied on the decision of Hon'ble Supreme Court in Goetze India Limited Vs. CIT (2006) 284 ITR 323 (SC) for the proposition that assessee cannot make a claim other than by way of revised return. She submitted that in the present case, the assessee did not have any right to file revised return under section 139(5) because original return filed by the assessee was belated as it was filed on 30-07- 1997 which is undisputedly belated one and could not be revised u/s 139(5). Once return filed on 30-03-1998, is not revised return, the claim of the assessee could not be entertained by the Assessing Officer. The Learned D.R. further submitted that provisions of section 139(4) would not be further applicable to the assessee because assessee has already furnished a return under that section on 30- 07-1997.
7. Against this, Learned A.R. submitted that it is incorrect to say that the return filed by the assessee on 30-03-1998 is not a return under section 139(4). Since the return filed by the assessee on 30-07-1997 is not a return filed under section 139(1) or under section 142(1), it has a right to file the return at any time before the expiry of 1 year from the end of the relevant assessment year or before the completion of the assessment whichever is earlier. The Learned A.R. referred to the decision of Hon'ble Gujarat High Court in S.R. Kosthi Vs. CIT (2005) ITR 165 (Gujarat) for the proposition that a return filed even after intimation under section 143(1) would be a valid return. He also submitted that the decision of Hon'ble Supreme Court in Goetze India Limited (supra) would not be applicable on appellate authorities. Accordingly, assessee can make claim before appellate authorities provided all the facts on record.
5 ITA No.824/Ahd/2004(Assessment Year 1996-1997)
8. We have considered the rival submissions and perused the material on record. In our considered view, the return filed by the assessee on 30-03-1998 cannot be ignored as it is filed within 1 year of the end of the assessment year within the meaning of Section 139(4). It is undisputed fact that return filed by the assessee on 30-07-1997 is not the return filed under Section 139(1) or under section 142(1). The view of the Learned. A.R. is that the return filed after expiry of time given u/s. 139(1) would be a belated return but this cannot take away a right of the assessee to file another return under section 139(4). If a person who has not filed a return at all under section 139(1) or 142(1) or otherwise, can be given a right to file a return under section 139(4), then there is no reason that another person who has filed a belated return is deprived of such right. However, Hon'ble Supreme Court has held in Kumar Jagdishchandra Sinha Vs. CIT 1996 220 ITR 67 (SC) that assessee cannot file a revised return under section 139(5) in a case where a return is filed under section 139(4). Certainly, the return filed by the assessee on 30-07-1997 is a return filed under section 139(4) as it is not the return under section 139(1) or 142(1). Therefore, assessee looses the right to file another return under section 139(4). Such an assessee also looses the right to file a return under section 139(5) as the belated return on 30-07-1997 is not the return under section 139(1) or 142(1). Accordingly the return filed by the assessee on 30-03-1998 cannot be treated as a valid return and therefore Assessing Officer cannot act upon as such return.
9. However, if assessee has put forward all the facts before the Assessing Officer, then a claim can be made by him even before appellate authorities by way of additional ground. Since the claim for depreciation/loss was made by the assessee before the Assessing Officer, who has not allowed the same and assessee has also made those claims before the Ld. Commissioner of Income Tax(Appeals), then Ld. 6 ITA No.824/Ahd/2004 (Assessment Year 1996-1997) Commissioner of Income Tax(Appeals) was well within his right to entertain those claims and adjudicate upon them. A claim can be made by the assessee either through a letter or even through a return which may not be ultimately treated as a valid return. Since in the present case, the facts relating to claim about the depreciation were put on record by the assessee through the return dated 30-03-1998 and it was claimed before the appellate authorities, then the claim should be considered and adjudicated upon in view of the decision of the Hon'ble Supreme Court in NTPC Vs. CIT (1998) 229 ITR 383 (SC). Further, the decision of the Hon'ble Supreme Court in Goetze (India) Ltd. Vs. Commissioner of Income-tax (2006) 284 ITR 323 (SC) is not applicable to Appellate authorities i.e. ITAT and CIT (A) .It has been so held in several decisions of the Tribunal as under:
*
1. Asheesh Securities Ltd. v. Deputy Commissioner of Income-tax, Central Circle 17, New Delhi [2008] 111 ITD 108 (DELHI) ( ITAT DELHI BENCH 'D') . The Supreme Court in Goetze (India) Ltd. v. CIT [2006] 284 ITR 323, has made it clear that the judgment is limited to the power of the assessing authority and does not impinge on the power of the Tribunal under section 254. The same would apply to the power of the Commissioner (Appeals) also under the provisions of Chapter XX-
2. TRIVENI ENGG. & INDUSTRIES LTD. V.DEPUTY COMMISSIONER OF INCOME-TAX, SPL. RANGE 18, NEW DELHI [2007] 164 TAXMAN 125 (DELHI) (MAG.) ITAT DELHI BENCH 'C' We find that this claim was neither raised before the Assessing Officer nor before the Ld. CIT(A). This is first time raised before the Tribunal. In the case of Goetze (India) Ltd. v. CIT [2006] 284 ITR 323, the Hon'ble Supreme Court has held that the Assessing Officer has no power to entertain a claim made otherwise than by way of by filing a revised return. The Hon'ble Supreme Court has made the following observation in this regard :
"The decision in question is that the power of the Tribunal under section 254 of Income-tax Act, 1961, is to entertain for the first time a point of law provided the fact on the basis of which the law can be raised before the Tribunal. The decision does not in any way relate to the power of the Assessing Officer to entertain a *In favour of assessee.7 ITA No.824/Ahd/2004
(Assessment Year 1996-1997) claim for deduction otherwise than by filing a revised return. In the circumstances of the case, we dismiss the civil appeal. However, we make it clear that the issue in this case 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 Income-tax Act, 1961."
30. Thus in view of decisions of the Apex Court in case of NTPC Ltd. v. CIT [1908] 229 ITR 383 and Goetze (India) Ltd.'s case (supra) the Tribunal has power to entertain for the first time a point of law provided the fact on the basis of which the issue of law has been raised are there on record
3. Kisan Discretionary Family Trust Vs .Assistant Commissioner of Income- tax[2008] 113 TTJ 918(AHD) ( ITAT, AHMEDABAD 'A' BENCH) Coming to the first finding that after offering income in the revised return, which was not withdrawn by the appellant, it is respectfully submitted that the fact that appellant has offered income in the revised return of income cannot preclude and appellant can raise such contentions before learned CIT(A) or before Hon'ble Tribunal. At the outset it is submitted that the income was offered in the revised return on a "without prejudice" basis. Further as a matter of fact, the case of Goetze India Ltd. (supra) carves out exception whereby appellant is entitled to raise such contention under s. 254 before this Hon'ble Tribunal.
xxxxxxxx The Hon'ble Supreme Court dismissed the appeal, making it clear that the decision was restricted to the power of assessing authority to entertain a claim for deduction, otherwise than by a revised return, and did not impinge on the power of Tribunal under s. 254 of the IT Act; 1961. The decision of Delhi High Court was affirmed. The order of the Hon'ble Supreme Court reads as under :
"Leave granted.
The question raised in this appeal relates to whether the appellant assessee could make a claim for deduction other than by filing a revised return. The assessment year in question was 1995-96. The return was filed on 30th Nov., 1995, by the appellant for the assessment year in question. On 12th Jan., 1998, the appellant sought to claim a deduction by way of a letter before the AO. The deduction was disallowed by the AO on the ground that there was no provision under the IT Act to make amendment in the return of income by modifying an application at the assessment stage without revising the return.
This appellant's appeal before the CIT(A) was allowed. However, the order of the further appeal of the Department before the Tribunal was allowed. The appellant has approached this Court and has submitted that the Tribunal was wrong in upholding the AO's order. He has relied upon the decision of this Court in National Thermal Power Co. Ltd. v. CIT [1999] 157 CTR (SC) 249: [1998] 229 ITR 383 (SC), to contend that it was open to the assessee to raise the points of law even before the Tribunal. The decision in question is that the power of the Tribunal under s. 254 of the IT Act, 1961, is to entertain for the first time a point of law provided the facts on the basis of which the issue of law can be raised are before the Tribunal. The decision does not in any way relate to the power of the AO to entertain a claim for deduction otherwise than by filing a revised return. In 8 ITA No.824/Ahd/2004 (Assessment Year 1996-1997) the circumstances of the case, we dismiss the civil appeal. However, we make it clear that the issue in this case is limited to the power of the assessing authority and does not impinge on the power of the Tribunal under s. 254 of the IT Act, 1961. There shall be no order as to costs."
39.2 After giving our thoughtful consideration to the decision of Hon'ble Supreme Court in the case supra what we have been able to understand is what the Hon'ble Supreme Court has held is that it is the AO who is barred to entertain a claim for deduction, made otherwise than by a revised return, and has also held that this decision does not impinge on the power of the Tribunal under s. 254 of the IT Act. In other words, in our opinion, the Hon'ble apex Court has held that the Tribunal has the power to entertain such claim.
10. In view of this, we are of the considered view that the claim of the assessee made in the return dated 30-03-1998 are required to be considered and adjudicated as per law. Since Assessing Officer had made the assessment under section 144, it is apparent that assessee was unable to explain its case. We in the interest of justice, restore the matter to his file to consider the claim of the assessee and allow it as per law, but without bringing any other material or fact on record and on the basis of facts already submitted by the assessee through his return dated 30-03- 1998.
11. Accordingly, we partly allow the appeal of the Revenue and partly allow it for statistical purposes.
This order is pronounced in open Court on Dated 23rd October, 2009.
Sd/- Sd/-
(T.K. SHARMA) (D.C. AGRAWAL)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad; Dated: 23/10/2009
Ankit*
Copy of the Order forwarded to:
1. The Appellant
2. The Respondent
3. The CIT(A) Concerned
9 ITA No.824/Ahd/2004
(Assessment Year 1996-1997)
4. The CIT,
5. The DR, Ahmedabad Bench
6. The Guard File.
BY ORDER,
ASSTT. REGISTRAR/ DEPUTY REGISTRAR
ITAT, Ahmedabad Benches,
AHMEDABAD.