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2017 (12) TMI 584
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.... order dt. 9.10.2017 following questions were added:- "ii. Whether without there being any error or omission in the Original Return filed under Section 139(1) of Act, a revised return filed under Section 139(5) of the Act, for withdrawing the deduction under Section 10BA of the Act, which otherwise legally Appellant is entitled for and such withdrawal was not permissible, such revised return ought not to have been considered by the ld. AO? iii. Whether claim made for deduction under Section 10BA of the Act in the original Return filed under Section 139(5) of the Act, without there being any error or omission in original return, and such revised return being not-est in law is hit by provisions of Section 80A (5) of the Act inserted from Finance Act 2009 with retrospective effect, restricts such claim?" 4. Counsel for the appellant Mr. Pathak contended that the first revised return for the relevant Assessment Year 2007-08, the assessee claimed exemption u/s 10BA as per form 55 which was attached with the return which is part of Annexure-A-1 to these proceedings. However, he contended that for the A.Y. 2005-06, the claim was rejected vide Annexure-2. Identically, ....
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....as under:- "The A/R has submitted that Hon'ble ITAT, Jaipur Bench in appellant's own case for A.Y. 2004-05 & 2005-06 as well as in A.Y. 2006-07 has decided the issue in favour of the appellant and as the facts remain identical this year as were in earlier year, as a finding precedence the issue in the year under consideration may be decided in favour of the appellant. However as the facts in the year under consideration are different to the extent that in original return filed the claim of deduction was made but the claim was subsequently withdrew by filing revise return. Under Sec 139 (5) any person can revise the return if the person discovers any omission or any wrong statement therein. In the present case the appellant by revising the return has accepted that there was a wrong statement in the original return. Once a revised return is filed it becomes basis for the assessment and the original return gets vanishes. In the revised return there is no claim of deduction u/s 10BA. By Finance Act 2009 amendment has been made w.e.f. 01.04.2003 i.e. retrospectively and sub sec 5 of 80A was inserted. This subsection provides that where the assessee fails to make a claim....
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.... or section 10BA or under any provision of this Chapter under the heading "C.- Deductions in respect of certain incomes", no deduction shall be allowed to him thereunder. Section 80AC. Deduction not to be allowed unless return furnished.-- Where in computing the total income of an assessee of the previous year relevant to the assessment year commencing on the 1st day of April, 2006 or any subsequent assessment year, any deduction is admissible under section 80-A or section 80-IAB or section 80-IB or section 80-IC, **or section 80-ID or section 80-IE no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub-section (1) of section 139.'' 2.22 The Hon'ble Madras High Court in the case of CIT vs Pyramid Samiria Theatre Ltd. 316 ITR 75 had an occasion to consider as to whether the assessee can be considered as an assessee in default on the basis of the original return and not depositing the tax u/s 140A, in case the assessee files the revised return u/s 139(5) of the Act. The Hon'ble Madras High Court held that the assessee will not be default after filing....
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...., the method adopted did not reflect the correct state of affairs. The result of change in the method of valuation was that the assessed showed a loss of Rs. 4,01,290/- which is an increase from the original loss shown as Rs. 3,00,369/-. This was clearly not a legally valid reason nor was it bona fide. In the facts of the present case, the change was not justified or legally permissible. In Bajaj Tempo Ltd. vs. Commissioner of Income Tax (1992) 196 ITR 188 Supreme Court held as under:- 5. The limited question is whether the assessee which has been found by tribunal to be a new company could be denied the benefit as visualised in Section 15C(1) because of operation of the Clause (i) of Sub-section (2). It is a restrictive clause. It denies benefit which is otherwise available in Sub-section (1). A provision in a taxing statute granting incentives for promoting growth and development should be construed liberally! In Broach Distt. Co- Operative Cotton Sales Ginning and Pressing Society Ltd. v. Commissioner of Income Tax, Ahmedabad, MANU/SC/0084/1989 : [1989]177ITR418(SC) the assessee a cooperative society claimed that the receipts from the ginning and pressing activities ....
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.... of an appeal, the Appellate Assistant Commissioner may confirm, reduce, enhance or annul the assessment or he may set aside the assessment or refer the case back to the Income Tax Officer for making a fresh assessment in accordance with the direction given by him. On appeal from the assessment, if it was completed within the period of limitation, the Appellate Assistant Commissioner may set aside the assessment and direct the Income Tax Officer to make a fresh assessment, if the assessment is otherwise not in conformity with law or procedure. The Income Tax Officer has the same power in making such fresh assessment as he had originally while making the assessment under Section 143 of the Act. If the Appellate Assistant Commissioner does not limit the scope of the enquiry by the Income Tax Officer to any specific aspect or issue, but only sets aside the entire assessment and directs the Income Tax Officer to make the assessment afresh, the power of the Income Tax Officer is not affected by anything which he might have omitted to do in the original order of assessment which was set aside by the Appellate Assistant Commissioner. In this case, the entire assessment order was challenge....
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....d only if the prescribed particulars are furnished. This only ensures that correct information is available to the ITO for allowing the proper deduction. But this cannot be construed to mean that where the assessee deliberately withholds the information, no deduction for depreciation could be given in computing the income. In the present case, the motivation for the assessee to withdraw the claim for deduction of depreciation is only to get a set-off of the business loss of the earlier year. But the current depreciation is a first charge on the profit as held by the Supreme Court in Mother India Refrigeration Industries (P) Ltd.'s case (supra) and that charge cannot be ignored by withholding the particulars so as to avail of the setting off the earlier year's loss which lapses by the prescribed period of limitation. In our considered opinion, therefore, the assessee cannot withdraw the claim for depreciation allowance when particulars are available in accordance with s. 34 only for the purpose of setting off of the loss of the earlier years. Since the particulars were available as furnished along with the original return, the ITO is bound to allow the deduction of depreciat....
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....e entertained ? 11. Re. Question No. 3 : It is a well-settled principle that when an assessee files any return or revised return, he/she is always entitled to in law to show that the return filed is by bona fide mistake. It is, therefore, in principle, cannot be argued that the assessee cannot retract from the returns or revised returns filed for the valid reason in law. In that view, question No, 3 is answered in the affirmative. In Esthuri Aswathiash vs. Income Tax Officer (1961) 41 ITR 539, Supreme Court held as under:- 6. Under section 22, sub-section (3), an assessee may submit a revised return if after he has furnished the return under sub-section (2) he discovers any omission or wrong statement therein. But such a revised return can only be filed "at any time before the assessment is made" and not thereafter. The return dated February 26, 1957, was submitted after the assessment was made pursuant to the earlier return and it could not be entertained. Nor could the lodging of such return debar the Income Tax Officer from commencing a proceeding for reassessment of the appellant under section 34(1) of the Indian Income Tax Act. There is also no su....
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....ked any information before denying the exemption for which the assessee was legally entitled. On the other hand, he has rejected the Second Return which was enclosed with the necessary documents for claiming the exemption. 13. The ratio laid down in Kumar Jagdish Chandra Sinha's case (supra), is not applicable in the instant case as the facts were quite different. In the said case, the penalty was imposed under Section 170(1C). It was observed that before assessment, it was the duty of the Assessing Officer and if it discovers any omission or any wrong statement in the original Return, then opportunity might have been given to the assessee. In the instant case, no opportunity was given to the assessee for any discrepancy. The assessee was entitled for exemption under Section 11 of the Income Tax Act and that exemption was the statutory exemption available to the assessee.................. Another decision of this court in Commissioner of Income Tax vs. Rajasthan Fasteners (P) Ltd. (2014) 363 ITR 271 (Raj.) wherein it has been held as under:- 16. Admittedly, the respondent-assessee is a 100% export oriented unit and had been claiming exemption right from the....
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....ules. The purpose of audit report in Form 56G is totally different than the purpose of audit report in Form 3CA annexed with Form 3CD. It is also an admitted fact that the financial statement also remained the same. In our view, the spirit behind this statement must be that the assessee should have claimed the exemption in his return and filed the same within due date and in the instant case, the assessee on the facts available on record clearly shows that the claim was duly made but section was inadvertently wrongly mentioned and this fact came to the notice of the assessee at a later point of time when pointed out by the AO. In our view, the purpose of assessment proceedings before the taxing authorities was to assess the income correctly and the tax liability of an assessee in accordance with law. If such clerical mistake occurred, then in our view, the AO was duty bound to inform the assessee that this claim is wrongly claimed and that one may claim exemption under the concerned section. It is also an admitted position that substantial manufacturing activities were being carried out by the assessee within the bonded premises in terms of CBEC circular No.65/2002-Cus dated 07/10/....
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.... for the subsequent year the same claim and for previous two years, the tribunal has allowed and it is only for the relevant year where the assessee has put to loss because of the delay in decision of the tribunal and to file the revised return. Therefore, he is victim of the circumstances which is beyond his control and sufferer of delay system. 6. Counsel for the respondent Mr. Singhi has relied upon the decision of the Supreme Court in the case of Commissioner of Income Tax vs. Mahendra Mills (2000) 243 ITR 56 wherein it has been held as under:- 25. In Ascharajlal Ram Prakash case MANU/UP/0213/1972 : [1973]90ITR477(All) Allahabad High Court said that since it is not mentioned in Section 34 as to in what form the prescribed particulars of depreciation must be furnished and that, therefore, there is no requirement in that Section that particulars must be furnished. High Court further went on to say that merely because the form of return provides for a place where the statement of such particulars should be set out, would not mean that in absence of such statement the Income-tax Officer has no power to allow the depreciation. This is contrary to the mandate of Section 3....
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....ed" to the assessee for the past years. "Actually allowed" does not mean 'notionally allowed'. If the assessee has not claimed deduction of depreciation in any past year it cannot be said that it was notionally allowed to him. A thing is "allowed" when it is claimed. A subtle distinction is there when we examine the language used in Section 16 and that Sections 34 and 37 of the Act. It is rightly said that a privilege cannot be to a disadvantage and an option cannot become an obligation. 27. We thus uphold the views expressed by the High Courts of Bombay, Punjab and Haryana, Karnataka, Andhra Pradesh, Calcutta and Kerala. Accordingly the appeal is dismissed. We answer the question set out in the beginning of this judgment in affirmative, i.e., in favour of the respondent-assessee and against the Revenue. There shall be no order as to costs. 6.1 He also relied upon the decision of Gujarat High Court in Principal Commissioner of Income Tax-I vs. Babu Bhai Ramamn Bhai Patel (2017) 84 Taxman.com 32 (Guj.) wherein it has been held as under:- 6. Sub-section (5) of Section 139, therefore, gives right to an assessee who has furnished a return under sub-section ....
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....e appellant sought to claim a deduction by way of a letter before the assessing officer. The deduction was disallowed by the assessing officer on the ground that there was no provision under the Income Tax act to make amendment in the return of income by modifying an application at the assessment stage without revising the return. 3. This appellant's appeal before the Commissioner (Appeals) was allowed. However, the order of the further appeal of the department before the Income Tax Appellate Tribunal was allowed. The appellant has approached this court and has submitted that the Tribunal was wrong in upholding the assessing officer's order. He has relied upon the decision of this court in National Thermal Power Company Ltd. v. CIT MANU/SC/1287/1997 : [1998]229ITR383(SC) , to contend that it was open to the assessee to raise the points of law even before the Appellate Tribunal. 4. The decision in question is that the power of the Tribunal under section 254 of the Income Tax Act, 1961, is to entertain for the first time a point of law provided the fact on the basis of which the issue of law can be raised before the Tribunal. The decision does not in any way....
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....mplete as soon as the act is done. It cannot be cured by subsequent mending. It is on this principle that an assessee can be penalised for concealing the particulars of his income or deliberately furnishing inaccurate particulars of such income. But, when an assessment has to be made the assessee is given a right to file a correct and complete return if he discovers an error or omission in the return filed earlier. The assessment can be completed only on the basis of the correct and complete return. The earlier return, after a revised return has been filed, cannot form the basis of assessment although it may be used to indicate the conduct of the assessee. Hence, for the purpose of assessment of income, the effective return must be the revised return filed by the assessee ultimately. 6. There is a distinction between a revised return and a correction of the return. If the assessee files some application for correcting a return already filed or making amends therein, it would not mean that he has filed a revised return. It will still retain the character of an original return, but once a revised return is filed, the original return must be taken to have been withdrawn and t....
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.... u/s 139(5) is revised return and return filed on 7.5.2008 Annexure-5 can be allowed to be withdrawn vide letter dt. 7.9.2009. 8. On a close reading of Sub-Sec.(5) of Sec.139, it is very clear that the legislature has given a chance to the assessee to check his position within one year or before the end of the relevant assessment, whichever is earlier. Since, the period was expired but for the year the assessee has taken his position and withdrawn his claim after that position is taken. Sec.139(5) is very clear that the assessee could not have withdrawn the claim, having withdrawn the same by filing revised return. It is only open for the department to accept it or not to accept it. Having taken advantage of the position of claiming benefit u/s 139(5) and to avoid penalty, in our considered opinion, it is not desirable to allow any party to blow hot and cold. If the tribunal decision would not have been in his favour, the assessee could not have contended that this is nonest. Even if the department would have denied that this is nonest, he would have contested the matter. 9. Apart from that, it is very settled law that a person who is taking advantage of provisions of Sec. 13....