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ITO vs. Lanco Hills Technology Park (P) Ltd

6. Further according to the learned AR, it is incorrect to say that the sale price revision is not an omission under section 139(5) of the Act, and any discrepancy in turnover qualifies as an omission for revised returns. He submitted that the decision of the coordinate bench of the tribunal in the case of Lok Housing & Constructions Ltd. v ACIT holds that revised returns due to market price changes are valid under section 139(5), and the Bombay High Court approved this. He furthered submitted that the assessee filed a revised return on 06.06.2011, correcting income due to a CIT(A) order clarifying that income during the construction period isn't taxable and should be netted with the expenditure. According to him, even though the return was filed after the due date, it was based on the CIT(A)'s order and is valid as a claim in a revised return. He placed reliance on the decisions like CIT v. Pruthvi Brokers in support of his contention justifying the validity of claims in revised returns. He argued that the CIT(A) rightly allowed the revised claim, and it is well within his jurisdiction being the first appellate authority. He further argued that since the learned Assessing Officer did not issue a notice under section 143(2) after the third and fourth revised returns, assessment under section 143(3) is invalid, inasmuch as the notice under section 142(2) issued earlier is not valid. For this preposition, he placed reliance on the decisions reported in MBS Implex Pvt. Ltd., Ashok Reddy Chevvurru, Hotel Blue Moon, and Laxman Das Khandelwal, basing on the premise, learned AR submitted that the assessment order is liable to be quashed for non-compliance with statutory procedures by the AO, rendering the assessment invalid. AO has completed the assessment without considering the concept of real income theory and also as per the Act actual income is to be assessed and not fictitious, unreal income.

9. According to the learned CIT(A), learned Assessing Officer taking into account the Second Revised Return of Income and not considering the subsequent validly revised Returns of Income is not as legal. Further according to the learned CIT(A), the revised Return of Income, though filed beyond limitation time, but during the course of scrutiny proceedings merits consideration by the learned Assessing Officer for completion of assessment u/s 143(3) of the Act, and that the learned Assessing Officer is duty bound to adjudicate upon such claim even though preferred through the Return filed is out of time. To conclude so, learned CIT(A), placed reliance on the decision of Pune bench of ITAT in ITO vs. Lanco Hills Technology Park (P) Ltd the case of DCIT vs Lab India Instruments Private Limited (2005) 93 ITD 120 Pune, wherein it was held that when a valid return is revised with new facts, the assessment based on the original return is unsustainable and against legislative intent; that the learned Assessing Officer must accept and consider the revised return, even if it is filed after the prescribed deadline, as long as it is submitted before the completion of the assessment; that the learned Assessing Officer should review the revised return and allow the claims based on the new information; and that in view of the view taken in the decision reported in DCIT vs. Lab India Instruments Pvt. Ltd., confirming that even a late revised return should be considered during the assessment process, the assessment based on the original return was invalid, and the assessment was cancelled. Assessee is also placing reliance on the decision rendered in Lok Housing & Construction Limited and DCIT vs Kamadhenu Builders and Developers also.

11. In the case of Lok Housing & Construction Limited the Mumbai Bench of ITAT clearly held that, if by way of a revised return of income, certain wrongly declared income was withdrawn, revised return being a valid return under section 139(5) of the Act, has to be taken into account for making assessment". In the case of Lab India Instruments Private Limited, Pune Bench of the Tribunal decided the issue relating to the ITO vs. Lanco Hills Technology Park (P) Ltd permissibility of making a claim for deduction during the assessment or appellate proceedings, even if the claim is not made by way of a revised return after a statutorily specific period and held that the assessee has the right to claim a deduction at any stage of the proceedings, including the appeal stage, and that the learned Assessing Officer is obligated to inform the assessee of such claims available under the law. The Tribunal rejected the argument that the assessee cannot make a claim simply because the revised return was not filed within the statutorily specific period and clarified that such claims do not necessarily need to be made through a revised return. Tribunal emphasised that claims for deductions can be made directly during the assessment process or even during appellate proceedings, which are considered part of the assessment process, thereby answered the issue in favour of the assessee.

12. In DCIT vs Kamadhenu Builders and Developers, a Mumbai bench of the Tribunal held that the revised return filed by the assessee was valid and should be considered by the learned Assessing Officer, even though the original return did not include the claim; that there is no requirement under the law for the claim to be made in the original return, and as long as the revised return was filed before the completion of the assessment, it should be accepted, and that the learned Assessing Officer has no valid grounds to deny the claim.