Income Tax Appellate Tribunal - Delhi
Sh. Amit Dhingra, New Delhi vs Acit, Gurgaon on 31 July, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES: 'A', NEW DELHI
BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER
AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER
ITA No. 5915/Del/2014
AY: 2009-10
Sh. Amit Dhingra vs. ACIT
C/o Kapil Goel, Adv. Circle 1(1)
F 26/124, Sector 7, Rohini Gurgaon
New Delhi 110 085
PAN: ANDPD 9369 B
(Appellant) (Respondent)
Appellant by : Sh. Kapil Goyal, Adv.
Respondent by : Sh. RC Dandey, Sr.D.R.
Date of Hearing : 26th July, 2017
Date of Pronouncement : 31st July, 2017
ORDER
PER R.K. PANDA, ACCOUNTANT MEMBER
This appeal filed by the assessee is directed against the order dated 01st September,2 014 of the Ld. CIT(A), Faridabad relating to Assessment Year 2009-10.
2. Although a number of grounds have been raised by the assessee, however, they all relate to the order of the Ld. CIT(A) in dismissing the ITA 5915/Del/2014 A.Y. 2009-10 Sh. Amit Dhingra vs. ACIT, Circle 1(1) appeal of the assessee by rejecting the claim of deduction under section 54 of the Income Tax Act, 1961 (the Act) amounting to Rs.19,72,735 and sustaining the addition of Rs.1,01,598/- on account of short-term capital gain and Rs.18,715/- on account of income from other sources.
3. Facts of the case, in brief, are that the assessee is an individual and filed his return of income on 27th July,2009 declaring total income of Rs.1,00,50,200/-. The case was selected for scrutiny. During the course of assessment proceedings the Assessing Officer (A.O.) noted that the assessee has not offered any capital gain for taxation. From the details furnished by the assessee in response to notice under section 142(1) the assessee filed revised return of income on 8.11.2011 wherein long-term capital gain of Rs.19,72,735/- was shown and the same was claimed as deduction under section 54F of the Act. Since the assessee has not claimed such deduction under section 54F in its original return of income and the revised return filed by him was barred by limitation the A.O. added Rs.19,72,735/- on account of "long term capital gain" but did not allow the claim of deduction u/s 54F of the Act. Similarly the A.O. made an addition of Rs.18,715/- on account of "income from other sources" and Rs.1,01,598/- on account of "short-term capital gain" which were not disclosed in the original return of income but disclosed in the revised return of income.
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ITA 5915/Del/2014 A.Y. 2009-10 Sh. Amit Dhingra vs. ACIT, Circle 1(1)
4. Before the Ld. CIT(A) the assessee made elaborate arguments challenging the disallowance of deduction under section 54F of the Act as well as the addition on account of short-term capital gain of Rs.1,01,598/- and income from other sources Rs.18,715/-. However the Ld. CIT(A) dismissed assessee's appeal by upholding the action of the A.O. on all the three issues by observing as under.
"I have considered the facts of the case together with the submissions of the appellant. The AO made an addition of Rs. 19,72,735/- on the basis that the Capital Gain and the deduction u/s 54F was claimed in the time barred return and not voluntarily in the original return. It I is well settled law that the taxpayer can't make a claim other than by filing a revised return (Goetze India Ltd. vs CIT [2006] 157 Taxman l(SC), which means that the only course of action left to the taxpayer, once a claim has not been made in the original return is to file a revised return. However, in this case the time limit for filing the revised return has expired. Any return filed after the time limit is a non est return and no cognizance can be taken of such a return. Thus Ground no.2 of the appeal is dismissed.
6. Ground No. 3 is against the addition of Rs. 1,01,598/- to the returned income of the assessee as the Short Term Capital Gain under the head "Income from Capital Gain". In this regard AO held that, as the assessee had not shown any Short Term Capital Gain in his original return of income dated 27.07.2009, and only after asking of details after issuance of notice u/s 142(1), the assessee in his time barred revised return of income, revealed the Short Term Capital Gain of Rs. 1,01,598/-. The Ld AR has not been able to bring any cogent arguments to counter the contention of the AO, and the argument as stated by me on ground No 2 also applies here. Thus Ground no.3 of the appeal is dismissed.
7. Ground No. 4 is against the addition of Rs. 18,715/- to the returned ncome of the assessee under the head "Income from other sources". The AO held that on perusal of the original return of income for the A.Y. 2009-10, the assessee had shown Income from other Sources amounting to Rs. 13,976/-. And 3 ITA 5915/Del/2014 A.Y. 2009-10 Sh. Amit Dhingra vs. ACIT, Circle 1(1) after issuing of notice u/s 142(1), the assessee filed revised return of income wherein he declared Interest income amounting to Rs. 32,691/-. As stated earlier the revised return was beyond time and thus non est and no cognizance can be taken of such a return, moreover it's only when all these amounts have been detected by the AO, only then the appellant has come forward to disclose them in his revised return. Thus Ground No. 4 of the appeal is also dismissed."
5. Aggrieved with such order of the Ld. CIT(A) the assessee is an appeal before the Tribunal.
6. The learned counsel for the assessee at the outset referring to various decisions including the decision of Hon'ble Delhi High Court in the case of Sam Global Securities Ltd. vide ITA 214/2013 order dated 2nd September, 2013 submitted that the Hon'ble High Court in the said decision dismissed the appeal filed by the Revenue wherein the Tribunal has held that the A.O. must not take advantage of ignorance of the assessee as to his rights. The judgement of Hon'ble Supreme Court in the case of Goetz India Ltd. was distinguished on the ground that such case was limited to the power of the assessing authority and did not infringe upon the powers of the Tribunal. The matter was accordingly remanded to the A.O. to consider the case on merits and decide accordingly. He submitted that since the assessee had filed the revised return which was within the permissible time, therefore, the A.O. should not have rejected such revised return. Even otherwise also since the assessee has made a claim before the A.O. regarding the eligibility of the assessee to such deduction u/s 54F, the Ld. CIT(A) at least should have considered the allowability of 4 ITA 5915/Del/2014 A.Y. 2009-10 Sh. Amit Dhingra vs. ACIT, Circle 1(1) deduction and should not have dismissed the appeal filed by the assessee. He accordingly submitted that he has no objection if the matter is restored to the file of the A.O. with the direction to decide the issue on merits on the basis of various evidences filed before him regarding the eligibility of deduction u/s 54F of the Act and the various other claims such as short term capital gain and income from other sources.
7. The Ld.D.R. on the other hand while supporting the order of the Ld. CIT(A) fairly conceded that he hasno objection if the matter is restored to the file of the A.O. for fresh adjudication in the light of decision of Hon'ble Delhi High Court in the case of Sam Global Securities Ltd. (supra).
8. We have considered the rival arguments made by both the sides, perused the orders of the A.O. and Ld. CIT(A) and paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the assessee in the instant case has filed a revised return on 8.11.2011 claiming deduction u/s 54F of the Act. Similarly in the revised return he declared interest income of Rs.32,691/- as against Rs.13,976/- declared in the original return. The assessee had also shown short term capital gain of Rs.1,01,598/- in the revised return which was added by the A.O. under the head 'capital gain'. It is the case of the A.O. that in view of the decision of Hon'ble Supreme Court in the case of Goetz India Ltd. (supra) the assessee is not entitled to any deduction/benefit since such claims were not made in the 5 ITA 5915/Del/2014 A.Y. 2009-10 Sh. Amit Dhingra vs. ACIT, Circle 1(1) original return of income and the revised return was not within the time limit. The findings by the Ld. CIT(A) while upholding the action of the A.O. has already been reproduced in the preceding paragraphs. It is the submission of the Ld.Counsel for the assessee that a revised claim can be entertained by the Ld. CIT(A) and the decision of Hon'ble Supreme Court in the case of Goetz India Ltd. (supra) do not infringe upon the powers of the appellate authorities.
9. We find merit in the above arguments of the Ld.Counsel for the assessee. We find under identical circumstances the appeal filed by Revenue against the order of the Tribunal was dismissed by Hon'ble Delhi High Court in the case of Sam Global Securities Pvt.Ltd. (supra) wherein relying on various decisions the Hon'ble High Court upheld the order of the Tribunal by observing as under.
"Revenue in this appeal, which pertains to assessment year 2001- 02, rely upon judgment of the Supreme Court in Goetze (India) Ltd. Vs. CIT, (2006) 284 ITR 323 (SC). The contention is that the respondent-assessee should be denied deduction under Section 10 (35)(a) of the Income Tax Act, 1961(Act) and claim of business loss of Rs.85,18,854/- should be rejected as no revised return was filed under Section 139(5) of the Act.
2. It is an accepted position that the assessee had not claimed the said deduction or business loss in the return of income filed on 31st October, 2001, declaring taxable income of Rs. 1,72,910/-. Subsequently, notice for scrutiny assessment under Section 143(2)(ii) was issued. During the course of the assessment proceedings, the respondent-assessee had filed revised computation of income vide letter dated 12th January, 2004, claiming that dividend of Rs. 80,48,977/- from the units of mutual fund was exempt under Section 10(33) of the Act and loss on sale of units amounting to Rs.85,18,583/- was a business loss and not speculative loss.6
ITA 5915/Del/2014 A.Y. 2009-10 Sh. Amit Dhingra vs. ACIT, Circle 1(1)
3. The claims were rejected by the Assessing Officer on three grounds that the respondent-assessee had not filed a revised return within the time allowed under Section 139(5) of the Act; dividend was received from Sun F&C Mutual Fund, which was not included in the specified list of mutual funds approved by SEBI; and as the assessee was dealing with shares, income/loss from shares/units was speculative loss and not business loss.
4. CIT (Appeals) dismissed the appeal of the assessee, but on remand the matter was restored to the first appellate authority. Thereupon, vide order dated 16th February, 2009, CIT (Appeals) held that Sun F&C Mutual Fund was duly approved mutual fund under Section 10(23D). He observed that dividend from the units of mutual fund was exempt under Section 10 (35)(a). Similarly with regard to the loss, he observed that units of mutual funds were sold and not shares, and therefore, the adverse effect of Explanation to Section 73 was not applicable. Reliance was placed upon decision of the Supreme Court in Apollo Tyres Ltd. Vs. CIT, (2002) 255 ITR 283 (SC). Inspite of the said observations, the CIT (Appeals) did not allow the appeal on the ground that the assessee had not filed a revised return within the time allowed under Section 139(5) of the Act, but had only filed a revised computation.
5. The tribunal has reversed the said findings after referring to the factual matrix. Reference was made to the decision of the Supreme Court in CIT Vs. Mr. P. Firm, (1965) 56 ITR 67 (SC) and Circular No. 114 XL-35 of 1955 issued by the Central Board of Direct Taxes on 11th April, 1955, that an officer must not take advantage of ignorance of the assessee as to his rights. Judgment of the Supreme Court in Goetze India Ltd. (supra) was distinguished on the ground that the said case was limited to the power of the assessing authority and did not impinge upon the power of the tribunal. The matter was remanded to the Assessing Officer to consider the case on merits and decide accordingly.
6. In Commissioner of Income Tax Vs. Jai Parabolic Springs Ltd., [2008] 306 ITR 42 (Delhi), a Division Bench of this Court made reference to the following passage from National Thermal Power Co. Ltd. Vs. CIT, [1998] 229 ITR 383(SC):-
"The power of the Tribunal in dealing with appeals is thus expressed in the widest possible terms. The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in 7 ITA 5915/Del/2014 A.Y. 2009-10 Sh. Amit Dhingra vs. ACIT, Circle 1(1) accordance with law. We do not see any reason to restrict the power of the Tribunal under Section 254 only to decide the grounds which arise from the order of the Commissioner of Income Tax (Appeals). Both the assesses as well as the Department have a right to file an appeal/cross- objections before the Tribunal. We fail to see why the Tribunal should be prevented from considering questions of law arising in assessment proceedings although not raised earlier."
7. Reference was also made to an earlier decision of the Supreme Court in Jute Corporation of India Ltd. Vs. CIT, [1991] 187 ITR 688 (SC), wherein it has been held as under:-
"An appellate authority has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations, if any, prescribed by the statutory provisions. In the absence of any statutory provision, the appellate authority is vested with all the plenary powers which the subordinate authority may have in the matter. There is no good reason to justify curtailment of the power of the Appellate Assistant Commissioner in entertaining an additional ground raised by the assessed in seeking modification of the order of assessment passed by the Income Tax Officer. This Court further observed that there may be several factors justifying the raising of a new plea in an appeal and each case has to be considered on its own facts. The Appellate Assistant Commissioner must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting the assessed to raise an additional ground in accordance with law and reason. The same observations would apply to appeals before the Tribunal also."
8. Decision in the case of Goetze (India) Ltd. (supra) was distinguished in Jai Parabolic Springs Ltd. (supra) in the following words:-
"In Goetze (India) Ltd. Vs. CIT [2006] 284 ITR 323 (SC) wherein deduction claimed by way of a letter before the Assessing Officer, was disallowed on the ground that there was no provision under the Act to make amendment in the return without filing a revised return. Appeal to the Supreme Court, as the decision was upheld by the Tribunal and the High Court, was dismissed making clear that the decision was limited to the power of the assessing authority to 8 ITA 5915/Del/2014 A.Y. 2009-10 Sh. Amit Dhingra vs. ACIT, Circle 1(1) entertain claim for deduction otherwise than by a revised return, and did not impinge on the power of the Tribunal."
9. In CIT Vs. Natraj Stationery Products (P) Ltd., (2009) 312 ITR 222 reliance placed on Goetze (India) Ltd. (supra) by the Revenue was rejected, as the assessee had not made any „new claim‟ but had asked for re-computation of deduction under Section 80-IB. The said decision may not be squarely applicable but the Courts have taken a pragmatic view and not the technical view as what is required to be determined is the taxable income of the assessee in accordance with the law. In this sense, assessment proceedings are not adversarial in nature.
10. In Commissioner of Income Tax Vs. Rose Services Apartment India P. Ltd., [2010] 326 ITR 100 (Delhi) relying upon the decision of the Supreme Court in National Thermal Power Co. Ltd.(supra ), a Division Bench of this Court rejected the plea of the Revenue that the tribunal could not have entertained the plea, holding that the tribunal was empowered to deal with the issue and was entitled to determine the claim of loss, if at all, under one section/provision or the other.
11. Decision in Goetze (India) Ltd. (supra) was again relied upon by the Revenue in CIT Vs. Jindal Saw Pipes Ltd., [2010] 328 ITR 338 (Delhi) but the contention was not accepted, observing that the tribunal‟s jurisdiction is comprehensive and assimilates issues in the appeal from the order of the CIT (Appeals) and the tribunal has the discretion to allow a new ground to be raised.
12. In view of the aforesaid discussion, we are not inclined to interfere with order passed by the tribunal. The appeal is dismissed."
10. Since the facts of the instant appeal are identical to the facts of the case decided by Hon'ble Delhi High Court cited (supra), therefore, respectfully following the decision of the Jurisdictional High Court, we restore the matter to the file of the A.O. with the direction to decide the eligibility of the claim of deduction u/s 54 made by assessee. If the assessee is otherwise entitled to the 9 ITA 5915/Del/2014 A.Y. 2009-10 Sh. Amit Dhingra vs. ACIT, Circle 1(1) claim for such deduction, the A.O. shall allow such claim. Similarly the A.O. also shall verify the eligibility of the assessee regarding short term capital gain of Rs.1,01,598/-, and addition of interest income of Rs.18,715/- being income from other sources. The A.O. shall decide the issue in accordance with law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
10. In the result the appeal is allowed for statistical purposes. Pronounced in the open Court on 31st July, 2017.
Sd/- Sd/-
(SUCHITRA KAMBLE) (R.K. PANDA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: the 31st July, 2017
* Manga
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ITA 5915/Del/2014 A.Y. 2009-10
Sh. Amit Dhingra vs. ACIT, Circle 1(1)
Copy forwarded to: -
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR, ITAT
- TRUE COPY -
By Order,
ASSISTANT REGISTRAR
ITAT Delhi Benches New Delhi
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