Mohd. Arif, Meerut v. ITO, Meerut

ITA 241/DEL/2011 | 2004-2005
Pronouncement Date: 25-03-2011 | Result: Partly Allowed

Appeal Details

RSA Number 24120114 RSA 2011
Bench Delhi
Appeal Number ITA 241/DEL/2011
Duration Of Justice 2 month(s) 7 day(s)
Appellant Mohd. Arif, Meerut
Respondent ITO, Meerut
Appeal Type Income Tax Appeal
Pronouncement Date 25-03-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted E
Tribunal Order Date 25-03-2011
Date Of Final Hearing 22-03-2011
Next Hearing Date 22-03-2011
Assessment Year 2004-2005
Appeal Filed On 17-01-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI B.C.MEENA ACCOUNTANT MEMBER I.T.A NOS. 241 240/DEL/11 ASSTT. YEAR 2004-05 MOHD. ARIF PROPRIETOR M/S. NEELAM LAMINATION 08 SUFIWALA CHOWK SHAHAPEER GATE MEERUT. VS. INCOME-TAX OFFICER WARD-1(4) MEERUT. (APPELLANT) (RESPONDENT) APPELLANT BY: NONE RESPONDENT BY: MS. BANITA DEVI NARAON SR. DR ORDER PER RAJPAL YADAV JM: THE PRESENT TWO APPEALS ARE DIRECTED AT THE INSTAN CE OF ASSESSEE AGAINST THE SEPARATE ORDERS OF EVEN DATE 26.10.201 0 PASSED BY LD. CIT(A) IN ASSTT. YEAR 2004-05. IN ITA NO. 240/DEL/1 1 ASSESSEE IS CHALLENGING THE CONFIRMATION OF PENALTY AMOUNTING T O ` 29 231/- IMPOSED U/S 271 (1)(C) WHEREAS IN ITA NO. 241/D/11 THE ASS ESSEE IS IMPUGNING VARIOUS ADDITIONS CONFIRMED BY THE LD. CIT(A). ITA NOS. 241 240/DEL/11 ASSTT. YEAR 2004-05 2 ITA NO. 241/D/11 2. IN THIS APPEAL THE FIRST THREE GROUNDS OF APPEA L ARE INTER CONNECTED TO EACH OTHER. IN GROUND NO. 1 ASSESSEE HAS PLEADE D THAT LD. REVENUE AUTHORITIES OUGHT TO HAVE ACCEPTED HIS REVISED RETU RN OF INCOME FILED ON 22 ND AUGUST 2005 AND SHOULD HAVE ACCEPTED THE INCOME A T ` 1707/-. IN GROUND NO. 2 GRIEVANCE OF THE ASSESSEE IS THAT LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF INTEREST EXPENSES AM OUNTING TO ` 13 227/- AND IN GROUND NO. 3 ASSESSEE HAS PLEADED T HAT LD. CIT(A) HAS ERRED IN CONFIRMING DISALLOWANCE OF DEPRECIATION AT ` 75 475/-. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS RUNNING PROPRIETORSHIP CONCERN NAMELY NEELAM LAMINATION WOR KS. HE HAS FILED HIS RETURN OF INCOME ON 27.10.2004 DECLARING TOTAL INCOME AT ` 90 407/-. ACCORDING TO THE ASSESSEE AFTER FILING OF THIS RET URN WHEN ACCOUNTS FOR THIS ASSESSMENT YEAR WERE VERIFIED THEN IT REVEALE D THAT HIS ACCOUNTANT HAS COMMITTED GLARING MISTAKES. HE HAS SHOWN GROSS RECEIPT OF ` 2 41 090/- ON CREDIT SIDES IN THE PROFIT AND LOSS A CCOUNT WHEREAS IT WAS GROSS PROFIT. THE ASSESSEE TOOK LOAN FROM ICICI BA NK AND PURCHASED A CAR. THE BANK HAS CHARGED INTEREST OF ` 13 227/- BUT THIS INTEREST WAS NOT CLAIMED IN THE ORIGINAL RETURN. SIMILARLY THE ACCO UNTANT HAS FAILED TO CLAIM THE DEPRECIATION ON THE CAR AT ` 75 475/-. THUS ASSESSEE HAD FILED ITA NOS. 241 240/DEL/11 ASSTT. YEAR 2004-05 3 A REVISED RETURN ON 22 ND AUGUST 2005 DECLARING A TOTAL INCOME AT ` 1707/-. THE AO DID NOT TAKE COGNIGENCE OF THIS REVI SED RETURN ON THE GROUND THAT ORIGINAL RETURN WAS NOT FILED WITHIN TH E TIME LIMIT PROVIDED U/S 139 (1) OF THE ACT. HE DID NOT GRANT THE BENEFIT OF INTEREST EXPENSE AND THE DEPRECIATION TO THE ASSESSEE. 4. DISSATISFIED WITH THE ACTION OF AO ASSESSEE FIL ED AN APPEAL AND SUBMITTED THAT HIS INCOME WAS BELOW THE TAXABLE LIM IT. THEREFORE HE COULD FILE HIS RETURN BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSTT. YEAR AND HE CAN FILE THE REVISED RE TURN BEFORE COMPLETION OF ASSTT. ORDER. THE ASSESSMENT HAS BEEN COMPLETED ON 7.12.2006. THE ASSESSEE HAS FILED HIS ORIGINAL RETURN ON 27.10.200 4 WHICH IS WITHIN ONE YEAR FROM THE END OF RELEVANT ASSTT. YEAR AND HE HA S REVISED HIS RETURN BEFORE PASSING OF THE ASSTT. ORDER. LD. CIT(A) HAS REJECTED HIS CONTENTION BY RECORDING THE FOLLOWING FINDING :- I HAVE CONSIDERED THE AOS STAND AND THE ARS ARG UMENTS CAREFULLY. THE AO HAS HELD THAT THE ASSESSEE WAS NOT ENTITLED TO FILE A REVISED RETURN AS THE ORIGINAL RETURN WAS NOT FILED IN TERMS OF SECTI ON 139(1). THE AR HAS PLEADED TO THE CONTRARY AND CITED CERTAIN CASE-LAWS TO STATE THAT SINCE THE ORIGINAL RETURN WAS FILED VOLUNTARILY AND BEFORE TH E EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR AND BEFORE THE COMPLETION OF ASSESSMENT HE WAS ENTITLED TO FILE A REVISED RETUR N. THE AR HAS ALSO PLEADED THAT A REVISED RETURN CAN ALSO BE REVISED FURTHER A ND FOR THAT HE HAS REFERRED TO NIRANJAN LAL RAM CHANDRA VS. CIT 134 ITR 352 (ALL) . HAVING CONSIDERED THE LEGAL PROVISIONS CAREFULLY I CANNOT AGREE WITH THE ARGUMENTS OF THE AR. FIRSTLY THE ISSUE AT HAND IS NOT WHETHER A REVISED RETURN CAN STILL BE REVISED. IT CAN DEFINITELY BE D ONE. THE ISSUE IS WHETHER A BELATED RETURN CAN BE REVISED. THE ANSWER IS A FIRM NO. THE ARS RELIANCE ON THE CASE-LAWS WHICH HE HAS REFERRED DO NOT HELP AS THE MATER STANDS SETTLED ITA NOS. 241 240/DEL/11 ASSTT. YEAR 2004-05 4 BY THE HONBLE APEX COURT IN THE CASE OF KUMAR JAGD ISH CHANDRA SINHA VS. CIT (1996) 220 ITR 67(SC). IT WAS HELD THEREIN THA T THE RIGHT TO FILE A REVISED RETURN IS AVAILABLE ONLY FOR THOSE WHO HAVE FILED T HE RETURN IN RESPONSE TO NOTICE UNDER SECTION 139(1) OR 139(2). IT WAS FELT BY THE HON;BLE APEX COURT THAT IN THE ABSENCE OF REFERENCE TO SECTION 139 (4) IN SECTION 139(5) IT SHOULD BE TAKEN THAT THERE IS PROHIBITION FOR THE RIGHT TO FILE A REVISED RETURN WHERE THE ORIGINAL RETURN WAS A BELATED RETURN. THE BOARD HAS ALSO TAKEN THE SAME RESTRICTED VIEW IN INSTRUCTION NO. 888 DATED 1.10.1 975. IT IS THEREFORE HELD THAT THE APPELLANT WAS NOT ENTITLED TO FILE A REVIS ED RETURN. AOS ACTION IS UPHELD. GROUND IS DISMISSED. 5. DISSATISFIED WITH THE ORDER OF LD. CIT(A) ASSES SEE HAS FILED THE PRESENT APPEAL. THIS APPEAL WAS FILED ON 17 TH JANUARY 2011. IN THE ACKNOWLEDGEMENT-CUM-NOTICE DATE OF HEARING WAS DUL Y COMMUNICATED TO THE ASSESSEE I.E 22.3.2011. THIS DATE WAS DULY N OTED BY THE AUTHORISED PERSON WHO HAS PRESENTED THE APPEAL. THU S ASSESSEE WAS NOT SUPPOSED TO BE GIVEN ANY OTHER NOTICES FOR HEAR ING. THE ASSESSEE FAILED TO APPEAR AT THE TIME OF HEARING. THEREFORE WE PROCEED TO DECIDE THE APPEAL EX PARTE QUA THE ASSESSEE. 6. WITH THE ASSISTANCE OF LD. DR WE HAVE GONE THRO UGH THE RECORD CAREFULLY. THE INCOME EXCEEDING ` 50 000/- WAS CHARGEABLE TO TAX IN THIS ASSTT. YEAR. IN THE ORIGINAL RETURN OF INCOME ASSE SSEE HAS OFFERED A SUM OF ` 90 409/- AS HIS TAXABLE INCOME. THIS RETURN WAS FI LED UNDER TRUE VERIFICATION. NOW HOW ASSESSEE CAN PLEAD THAT HIS I NCOME WAS BELOW THE TAXABLE LIMIT AND THEREFORE HE COULD FILE THE RETU RN WITHIN ONE YEAR FROM THE END OF THE RELEVANT ASSTT. YEAR. IN THE REVISED RETURN HE IS ALLEGING THAT HIS INCOME WAS BELOW THE TAXABLE INCOME. THE A SSESSEE OUGHT TO ITA NOS. 241 240/DEL/11 ASSTT. YEAR 2004-05 5 HAVE FILE THE RETURN WELL IN TIME. THE RETURN FILED ORIGINALLY PRIME FACIE SUGGEST THAT HE HAS A TAXABLE INCOME EXCEEDING ` 50 000/-. HE HAS PAID SELF ASSESSMENT TAX ON THIS AMOUNT. THEREFORE THER E IS NO FORCE IN THE CONTENTION OF THE ASSESSEE THAT HE HAS A TIME LIMIT TO FILE THE RETURN ON 27.10.2004. THE AO HAS OBSERVED THAT RETURN HAS BEE N FILED AFTER EXPIRY OF THE TIME LIMIT AVAILABLE IN THE SECTION 139(1) A ND THEREFORE HE CAN NOT REVISE INVALID RETURN. IN VIEW OF THE FINDING RECO RDED BY THE LD. CIT(A) EXTRACTED SUPRA WE DO NOT FIND ANY MERIT IN THESE T HREE GROUNDS OF APPEAL. THEY ARE REJECTED. 7. IN GROUND NO. 4 ASSESSEE HAS PLEADED THAT LD. AO HAS ERRED IN ADDING A SUM OF ` 1 17 300/- IN THE TOTAL TAXABLE INCOME OF THE ASSE SSEE. WITH THE ASSISTANCE OF LD. DR WE HAVE GONE THROUGH THE RECORD CAREFULLY. LD. AO ON VERIFICATION OF THE ACCOUNTS OBSERVED THAT ASSESSEE FAILED TO SUBMIT THE SUPPORTING VOUCHERS IN RESPECT OF PURCHASES MADE FROM 8 PARTIES. HE NOTICED THE DETAILS OF THOSE PAR TIES. THE ASSESSEE CONTENDED THAT VOUCHERS HAVE BEEN MISPLACED BY THE ACCOUNTANT WHO HAS COMMITTED A MISTAKE EVEN IN FILING THE RETURN. HE HAS ALREADY LEFT THE JOB AND THEREFORE IT IS DIFFICULT FOR ASSESSEE TO PRODUCE THE VOUCHERS. LD. AO DISALLOWED THE CLAIM OF PURCHASES AMOUNTING TO ` 1 17 300/-. IN THE APPELLATE PROCEEDING ASSESSEE HAS FILED A PAPER BO OK AND PLACED PARTYWISE COPY OF THE CONFIRMED ACCOUNT COPIES OF BILLS COPIES OF ITA NOS. 241 240/DEL/11 ASSTT. YEAR 2004-05 6 RECEIPTS OF PAYMENTS ETC. LD. CIT(A) DID NOT ENTERT AIN THIS EVIDENCE AND CONFIRMED THE DISALLOWANCE. ON DUE CONSIDERATION OF THE ORDERS OF LD. AO WE FIND THAT ASSESSEE FAILED TO SUBMIT THE VOUC HERS BUT HE SUBMITTED THE DETAILS OF PARTIES FROM WHOM PURCHASE S HAVE BEEN MADE. THESE ARE SMALL AMOUNTS RUNNING INTO ` 12 000/- TO ` 15 000/-. THE AO OUGHT TO HAVE CALLED FOR INFORMATION FROM THESE PAR TIES WHETHER THEY HAVE SOLD THE GOODS TO THE ASSESSEE OR NOT. THE ASS ESSEE HAS EXPRESSED HIS INABILITY IN PRODUCING THE VOUCHERS A S NOT AVAILABLE. IN SUCH SITUATION INSTEAD OF STRAIGHT AWAY DISALLOWING THE CLAIM OF ASSESSEE LD. AO OUGHT TO HAVE EXAMINE THE SURROUND ING CIRCUMSTANCES. BEFORE LD. CIT(A) HE HAS PRODUCED A LL THE DETAILS BUT LD. CIT(A) AGAIN DID NOT ENTERTAIN IT. THE AO FAILE D TO COLLECT CONCRETE EVIDENCE SUGGESTING THAT CLAIM OF PURCHASES IS BOGU S. TAKING INTO CONSIDERATION THE TOTALITY OF THE FACTS AND CIRCUMS TANCES PARTICULARLY THE FACTS THAT BECAUSE OF ASSESSES LAPSE HE COULD NO T CLAIM THE DEPRECIATION AMOUNT OF ` 75 475/- AS WELL AS INTEREST EXPENSES ` 13 227/- WHICH WOULD OTHERWISE SET OFF THIS ADDITIO N. HE HAS ALREADY OFFERED INCOME FOR TAX AT ` 90 409/- WHEREAS HAD HE FILED HIS RETURN CORRECTLY THIS MAY NOT BE HIS INCOME. WE DO NOT DEE M IT NECESSARY TO SET ASIDE THIS ISSUE TO THE FILE OF AO FOR CONDUCTING T HE FRESH INQUIRY BECAUSE THE AMOUNT OF DISALLOWANCE IS ONLY ` 1 17 300/-. THE COST OF LITIGATION TO ITA NOS. 241 240/DEL/11 ASSTT. YEAR 2004-05 7 VERIFY THE DETAILS OF SUPPLIERS WHICH WERE SUBMITTE D BEFORE THE AO AS WELL AS LD. CIT(A) WOULD BE ON THE HIGHER SIDE THAN THE ULTIMATE TAX IMPLICATION. THE DISALLOWANCE OUGHT NOT TO HAVE BEE N MADE IN A MECHANICAL WAY AS IS DONE BY THE AO. WE ALLOW THIS GROUND OF APPEAL AND DELETE THE ADDITION OF ` 1 17 300/-. ITA NO. 240/D/11 8. IN ITA NO. 240/D/11 THE ASSESSEE IS IMPUGNING P ENALTY OF ` 29 231/- WHICH HAS BEEN LEVIED ON THE DISALLOWANCE OF ` 1 17 300/-. IN THE FOREGOING PARAGRAPH WE HAVE DELETED THE DISALL OWANCE. CONSEQUENTLY THERE WILL BE NO PENALTY ON THIS AMOUN T. THEREFORE THIS APPEAL OF THE ASSESSEE IS ALLOWED AND PENALTY IS DE LETED. 9. IN THE RESULT ITA NO. 241/D/11 IS PARTLY ALLOWE D WHEREAS ITA NO. 240/D/11 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH MARCH 2011. SD/- [B.C. MEENA] [RAJPAL YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 25.3.2011 VEENA ITA NOS. 241 240/DEL/11 ASSTT. YEAR 2004-05 8 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT