TaxTMI 
TaxTMI 
2025 (4) TMI 2096
X X X X Extracts X X X X
X X X X Extracts X X X X
....rsuant to the search notice u/s 153A of the Act was issued to the assessee on 05.07.2018 which was duly served. In response to a notice issued u/s 153A, the assessee furnished his return of income on 11.08.2018, declaring total income of its. 3,87,72,400/-. Earlier the assessee had filed his return of income u/s 139 of the Act on 30.03.2018 at the total income of Rs. 87,72,400/-. The case of the assessee was selected for scrutiny by CASS. The CASS scrutiny proceeding was abated vide order dated 20.11.2019. Statutory notices were issued along with questionnaire / Annexure-A requiring certain details / information, which was served upon the assessee. In response to that, he furnished the desired details / information / documents / which were examined with respect to claims made in the return of income, 2.1 While assessment proceeding the assessee file application u/s. 154 of the Act for rectification of mistake on 24.10.2019. The application was disposed of by-passing order u/s. 154 of the Act. On 24.12.2019. 2.2 As there was difference of Rs. 3,00,00,000/- between ITR filed under section 153A and 139 of the IT. Act, 1961, the ld. AO considered the additional income so disclose....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd unjust. The assessment required to be completed on the basis of the revised return disclosing income of Rs. 87,72,400/- Hence the completion of assessment deserved to be quashed. The claim of the assessee is contradictory. In the reply furnished during the appellate proceedings for AY 2015-16 different claim was made. In the appellate proceedings for AY 2015-16 the assessee claimed that the assessee, in his statements recorded u/s 132(4) had stated that he received an amount aggregating Rs. 2 crore from Shri R.K. Verma, in FY 2014-15, which was shown by him as unsecured loan in the ITR filed by him, which in the next year, i.e. FY 2015-16. has been adjusted against work receipts of his concern Navbharat Nirman Co. Thus, the tax liability on this amount stands duly discharged once it is adjusted against the work receipts in FY 2015-16 The assessee is claiming that the amount of Rs. 3.00 crore remained payable upto 31.03.02019 as per Affidavit filed by Shri R K Verma in current year and in AY 2015-16 it was claimed that Rs. 2 crore from Shri R.K.Verma, in FY 2014-15, which was shown by him as unsecured loan in the ITR filed by him, which in the next year....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... within such period, as may be specified in the notice. It is not the case of the assessee that the revised return filed by the assessee on 21 11 2019 was filed within the time as specified in the notice issued u/s 153A. The return of income furnished by the assessee is to be filed in response to the time allowed in the notice issued u/s 153A of the Income Tax Act. The assessee is claiming that the return filed in response to the notice u/s 153A was revised. It is not furnished and explained with evidence that the return filed in response to notice issued u/s 153A was revised within the time provided by the AO in the notice issued u/s 153A. In the absence of any evidence, it is presumed that the revised return was not filed within the time allowed by the AO. In response to the notice u/s 153A the assessee already furnished his return of income on 11.08.2018. Therefore, the returned filed on 21.11.2019 was not filed in response to notice issued by the AO u/s 153A. Such return is considered as non est as per law. The assessee wants to reduce the returned income by claiming various excuses which is not permissible in the law. The income offered by the assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rsuant to the search and seizure operations u/s 132 of the Income-tax Act, 1961 ("the Act") on 10.2.2012 and issuance of notice u/s 153A of the Act, assessee filed the return of income declaring a loss of Rs. 27,62,303/- which the assessee revised declaring nil income. Assessment was completed on the nil income only. Therefore, in that case, the AO himself accepted the revised return of income in compliance to the notice issued u/s 153A. In the present case, no evidence furnished by the assessee to prove that the AO accepted the revised return of income. Therefore, the decision relied upon by the appellant is not found to be applicable on the facts of the case. The appellant has also discussed the taxability of waiver of loan. OOn the facts of the case, the AO has only accepted the returned income and not made any addition. It is not evident that on which issue the assessee offered the excess income because of contradictory stand taken in the proceedings before the AO and during the appellate proceedings. Hence, the issue discussed by the assessee is not found to be relevant on the facts of the present case. In view of above discussion, the arguments of the appell....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e to take additional grounds of appeal before or at the time of hearing of the appeal and/or modify any of the above grounds. 5. In support of the above grounds of appeal raised by the assessee. ld. AR of the assessee filed detailed written submissions in support of the various grounds so raised, which reads as under ; "The assessee had filed his original ITR for AY 2017-18 u/s 139(4) on 30.03.2018, showing an income of Rs. 87,72,404/- which was processed u/s 143(1) on 28.03.2019. Thereafter, on receiving notice u/s 153A, he again filed a return on 11.08.2018, inadvertently showing an income of Rs. 3,87,72,404/- On realizing his mistake, he filed a revised return on 21.11.2019. This return was transferred to the AO by CPC on 26.11.2019. During the course of assessment proceedings, the assessee filed a letter to the AO intimating him about the filing of the revised return, enclosing a copy of the same and a detailed note as to why the return was revised. The AO ignored the same and did not take the cognizance of the revised return. He did not even discuss it in his order and went on to finalize the assessment on the basis of the return filed u/s 153A on 11.08.2018. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rma has been waived off and it constituted his income. The assessee had filed a revised return on 21.11.2019, which was transferred by CPC to the AO on 26.11.2019. The Ld.AO, in the assessment order passed by him, did not even make a mention of the revised return filed by the assessee. In the light of the above submissions, it was contended on behalf of the assessee before the learned CIT(Appeals) that there was a wrong statement of income made in the original return in as much as there was no such income accruing or arising to the assessee and, therefore, the revised return filed by him correcting the said wrong statement was valid in accordance with the provisions of section 139(5). The Supreme Court in the plethora of cases has held that book entries are not decisive in determination of taxability nor otherwise of a transaction. What is relevant is the actual accrual of income. The accrual of income means the right to receive is vested in favour of assessee and becomes legally due to him. In the instant case, the purported income never accrued or became legally due to the assessee. He continued to be a debtor in the books of Shri R.K.Verma, for AY 2017-18 and thereafter. Hence, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made." On reading of the above provisions, it provides for issuance of notice to such person requiring him to furnish the return of income within the prescribed time limit as may be specified in the notice. Further, it provides that the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139 of the Act. The expression "so far as may be" used in section 153A(1)(a) came up for consideration before ITAT, Delhi in case of R.S. Investment vs. ITO reported in 15 Taxman.com 270 wherein in the context ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Here, it would also be relevant to refer to erstwhile provisions of section 158BC contained in Chapter XIV-B which contains similar provisions for filing of return of income pursuant to issuance of notice by the AO where the search has been conducted. By way of a proviso to section 158BC(a), it was specifically provided that a person who has furnished a return under this clause shall not be entitled to file a revised return of income. The said provisions have since been superseded by the provisions of section 153A of the Act. Unlike the erstwhile provisions of section 158BC which provides a clear embargo on filing the revised return, current provisions in section 153A do not contain any specific restriction. Rather, it is seen that current provisions have been drafted in a way so as to align with the provisions contained in section 139 provided they are not inconsistent with the provisions of section 153A of the Act. Therefore, in absence of a specific restriction under section 153A, it would be wrong to hold that the assessee would be barred from filing a revised return assuming he satisfies the conditions for filing such revised return. In light of above discus....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tice issued u/s 153A. The return of income furnished by the assessee is to be filed in response to the time allowed in the notice issued u/s 153A of the Income Tax Act. The assessee is claiming that the return filed in response to the notice u/s 153A was revised. It is not furnished and explained with evidence that the return filed in response to notice issued u/s 153A was revised within the time provided by the AO in the notice issued u/s 153A. In the absence of any evidence, it is presumed that the revised return was not filed within the time allowed by the AO. The Ld.CIT(A) has misunderstood Clause(a) of Section 153A(1). The clause speaks of filing of the return in compliance to notice u/s 153A, which was filed by the assessee on 11.08.2018. The Ld.CIT(A) has conveniently ignored the latter part of Clause A, which reads thus - And the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139. So, it clearly follows that a return filed u/s 153A can be revised u/s 139(5), subject to the conditions stated therein. The Ld.CIT(A) has further observed - In response to the notice u/s 15....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd further no incriminating material for the relevant year having been unearthed during search, the returned income as per the revised return may kindly be accepted." 6. The ld. AR of the assessee vehemently argued that the assessee initially filed his ITR on 30.03.2018 u/s. 139 disclosing an income of Rs. 87,72,400/-. When the notice u/s. 153A of the Act was issued the assessee filed his return of income at Rs. 3,87,72,400/-. During the assessment proceeding realizing the fact that he has wrongly offered higher income than what was legally due from him he revised the return of income on 21.11.2019 disclosing an income what was originally filed at Rs. 87,72,400/-, but ld. AO did not give cognizance to that revised return and completed the assessment at the income that was filed disclosing Rs. 3 crore more income based on the retracted statement. While completed the assessment ld. AO did not mention that contention of the assessee and completed the assessment without considering the facts placed on record. Not only that he has not bothered to refer the contention raised in the assessment proceeding. The statement based upon which the assessee filed a return u/s. 153A which was re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the revised return, citing its invalidity under the provisions of Section 153A read with Section 139(5). * The Ld. CIT(A) further held that the revised return filed by the appellant did not comply with the requirements of law and was rightly treated as "non-est" by the AO. 3. Revenue's Confirmation of Findings * The Revenue concurs with the findings of the Ld. CIT(A) and the AO, as the appellant's revised return was both procedurally and substantively invalid. * The rejection of the revised return was justified based on the established legal framework and judicial precedents. 3.2. Revised Return as an Afterthought 1. Timing of the Revised Return: * The revised return was filed over a year after the original return, without any credible explanation for the delay. * As held in CIT v. Nova Promoters & Finlease Pvt. Ltd. [(2012) 342 ITR 169 (Delhi HC)], claims introduced belatedly and without substantiation are often afterthoughts to escape tax liability. 2. Contradiction Between Returns: * Either the original return filed under Section 153A or the revised return is false. The appellant ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed under Section 153A must be treated as original returns and cannot be revised beyond the prescribed timelines. 4. Conclusion The Revenue respectfully submits that: 1. The findings of the Ld. CIT(A) and the AO are valid and supported by established legal principles and judicial precedents. 2. The revised return filed by the appellant was an afterthought and lacks credibility, as it was filed beyond the permissible timelines and without substantive evidence. 3. The appellant's claim of inadvertent error is unsupported and contradicted by the facts and circumstances of the case. 4. The assessment order passed based on the original return filed under Section 153A is valid and must be upheld. 5. Prayer In light of the above submissions, the Revenue respectfully prays that: 1. The appeal of the appellant be dismissed, and the findings of the L.d. CIT(A) and the AO be confirmed. 2. The revised return filed on 21.11.2019 be treated as invalid and disregarded for assessment purposes. 3. The assessment order passed based on the original return filed under section 153A be upheld in its ent....
X X X X Extracts X X X X
X X X X Extracts X X X X
....03.2018 declaring income at Rs. 87,72,404/-. On 05.07.2018 notice u/s. 153A of the Act was issue and the assessee files the return of income pursuant that notice on 11.08.2018 wherein he has included an income of Rs. 3 cr being the amount of loans which he has disclosed in the statement recorded in the search. The assessee retracted that statement and thereby also filed a revised return on 21.11.2019. CPC transferred that revised return to the JAO on 26.11.2019. Vide letter dated 13.12.2019 assessee informed to JAO by filling a letter along with revised return and note explaining the reasons for filling that. Ld. AO has passed the assessment order on 28.12.2019 where in he has not discussed the filling of revised return and the reasons as to why the same was not considered. Thus, when the appeal of the assessee argued by the ld. DR she contended that revised return filed on 21.11.2019 does not align with the timelines or condition specified u/s. 139(5) and therefore, stated by her as invalid in the eyes of the law. Thus, the precise question before us whether the returned filed in response to notice u/s. 153A can be compared to the return filed as per provision of section 139 of....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the purpose of assessment which is pending, would be treated as non est in law. Consequently, the return filed under section 153A(1) is a return furnished under section 139 of the Act. In the above referred case, even court has discussed decision of Supreme Court in the case of CIT v. Sun Engineering Works Pvt Ltd. 198 ITR 297/64 Taxman 442 and court observed that said case was dealing with reassessment u/s 147/148 of the Act vis a vis additional claim and role of AO is primarily restricted to such income which has escaped assessment and does not permit reconsideration of issue which are concluded in the earlier assessment years in favour of the Revenue whereas additional claim made by appellant in return of income u/s 153A of the Act is allowable because provisions of the Act which would be otherwise applicable in case of return filed in the regular course under section 139(1) would also continue to apply in case of return filed under section 153A. 2. Pune ITAT in the case of UMESH DHONDIRAM SHINDE v. DCIT [IT Appeal No 1363 to 1367/PUN/2014, dated 16th March 2018, has held that following the ratio laid down by the Hon'ble Bombay High Court in CIT v. Contine....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ment proceedings under the Act, without making recourse to revised return, despite the fact that time limit for revising return under section 139(5) had expired. ITAT for this year accepted new claim regarding taxability of sales tax remission as capital receipt as against revenue receipt shown in original return of income filed prior to search u/s 132 of the Act. Ongoing through finding of ITAT referred supra, new claim can be made by assessee only for those years for which proceedings have abated in terms of section 153A of the Act. 4. The Delhi High court in the case of Pr. CIT v. Neeraj Jindal [2017] 79 taxmann.com 96/393 ITR 1 (Delhi) has deleted penalty u/s 271(1)(c) of the Act when an assessee has filed revised return after search has been conducted, and such revised return has been accepted by Assessing Officer. In this case, for the relevant assessment year 2005-06(Not search year), assessee reported its income through a return under Section 139(1) of the Act, declaring an income of Rs. 1,72,799/- on 30.12.2005. A search and seizure operation under Section 132(4) of the Act was carried out on 11.01.2007 in the premises of the assessee's group companie....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rn of income for AY 2008-09 on 05/12/2008 u/s 139 of the Act and search action was carried out on 06/01/2011. The appellant in original return of income has shown from sale of plots as capital gain i.e in return of income filed u/s 139 prior to date of search and in return of income filed in response to notice u/s 153A, appellant has shown such income as business income. The Issue before ITAT was whether the assessee is entitled to revise its claim and alter its original position in accordance with law or not. The ITAT has decided issue in favour of assessee and mainly observed as under: Unlike Section 147, the scope of Section 153A of the Act is not necessarily relatable to only undisclosed income. The scheme of assessment under section 153A of the Act appears to be quite different qua Section 147 of the Act on the face of it. Section 153A of the Act begins with non-obstante clause which has an override effect over Section 147 of the Act among others. Reference was drawn to decision Shrikant Mohta v. CIT [2018] 95 taxmann.com 224/257 Taxman 43/[2019] 414 ITR 270 (Cal.), Asstt. CIT v. V.N. Devadoss [2013] 32 taxmann.com 133/57 SOT 67 (URO) (Chennai - Trib....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ith the purpose and purport of the said provision, which is intricately linked with search and requisition under sections 132 and 132A, it is apparent that: The assessments or reassessments, which stand abated in terms of II proviso to section 153A of the Act, the AO acts under his Original jurisdiction, for which, assessments have to be made; Regarding other cases, the addition to the income that has already been assessed, the assessment will be made on the basis of incriminating material and In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made." The argument of the Revenue that the AO was free to disturb income de hors the incriminating material while making assessment under section 153A was specifically rejected by the Court on the ground that it was "not borne out from the scheme of the said provision" which was in the context of search and/or requisition. The Court also explained the purport of the words "assess" and "reassess", which have been found at more than one place in section 153A as under: "26. The plea raised on behalf of the assessee tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the Act, assessee has suo moto disallowed such interest but in notes to return, it reserved it right to claim such interest at assessment stage. The AO has not entertained such claim in assessment order but ITAT has allowed such deduction on the ground that "As there is no specific inhibition on the jurisdiction of the Assessing Officer in not including any new income to such fresh total income pursuant to search which was not added during the original assessment, in the like manner, there is no restriction on the assessee to claim any deduction which was not allowed in the original assessment. The ratio of above decision has been followed by Mumbai ITAT in the case of UNIVERSAL MEDICARE PVT. LTD. v. Dy. CIT [IT Appeal Nos. 2967 to 2971/Mum/2016, dated 05/12/2018 and V.N. Devadoss (supra). However, ratio of above decisions may not hold good considering the decisions of Bombay High court and Rajasthan High court referred supra for new claim made by assessee for unabated assessment years. 9. The Pune ITAT in the case of Mapani Estate v. Asstt. CIT [2014] 44 taxmann.com 242/64 SOT 105 (Pune - Trib.) (URO) after considering Bombay High court decision of CI....