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M/s. Andhra Pradesh Industrial Development Corporation Limited Versus Deputy Commissioner of Income Tax, Circle-1 (1) , Hyderabad

Revised computation of total income - AO ignoring the revised computation of total income submitted during the course of assessment proceedings on the ground that no revised return of income was filed - Held that:- Now, the law is quite settled to the extent that a claim made before the AO by way of a letter even it did not form part of original return of income can be entertained by the AO. It is trite law that income tax proceedings are not adversial proceedings. The decision of the Hon'ble Su .....

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utation in accordance with the provisions of law. - I.T.A. No. 548/HYD/2017 - Dated:- 7-9-2017 - Shri D. Manmohan, Vice President And Shri Inturi Rama Rao, Accountant Member For the Assessee : Shri A.V. Raghu Ram, AR For the Revenue : Smt. Suman Malik, DR ORDER Per Inturi Rama Rao, A. M. This appeal filed by assessee-company is directed against the order of the learned Commissioner of Income Tax (Appeals)-5, Hyderabad, dated 30-12-2016 for the AY. 2011-12. The appellant raised the following Grou .....

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ng that such revised computation based on Audited financial statements should be filed in the form revised return though no such ratio would apply for a decision by the appellate authority and there by erred in dismissing the appeal. 4. The learned CIT(A) failed to appreciate the fact that even the CBDT has issued circular u/s. 119 in respect of Government Corporations to accept the returns filed belatedly accepting the fact that the audited financial statements of the Government Corporations wo .....

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er the normal provisions of the Income Tax Act [Act] and ₹ 3,90,47,195/- u/s. 115JB of the Act. After processing the return u/s. 143(1) of the Act, the said return was selected for scrutiny. During the course of assessment proceedings, the appellant had filed revised computation of income necessitated on account of audited accounts. The original return of income was filed based on the provisional accounts. However, the AO not considered the revised computation of income submitted by the as .....

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139(5) of the Income Tax Act? (ii) Whether the Assessing Officer is justified in holding that the assessee has no right to claim revised income before the Assessing Officer after filing of the original return other than by way of filing revised return? 5.1 The facts are that the assessee, a government company follows mercantile system of accounting and has filed its return of income on 28- 09-2011 based on unnaudited provisional accounts admitting total income of ₹ 2,80,48,470/- under norm .....

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ot completed. The returns were filed on the basis of the provisional accounts and it was claimed that during the course of audit it was found that reversal of provision for diminution in value of investments was taken as ₹ 3,33,18,048/ - whereas the correct figure is ₹ 47, 10,269/- only. On the basis of the original return filed notices under Section 143(2) and 142(1) were issued to the assessee to produce the documents/accounts. Assessment was completed under Section 143(3) on the b .....

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rn. Such a revised return can be furnished at any time before expiry of one year from the end of the relevant A.Y. or the completion of the assessment, whichever is earlier. Thus, the statute provides safeguard to an assessee in case he discovers any omission or wrong statement in his original return to file a revised return. The further requirement is that this omission or wrong statement in the original return must be due to a bona fide inadvertence or mistake on the part of the assessee. 5.4 .....

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nly on the basis of revised return and not otherwise. 5.5 Where an assessee furnishes a return of income, the filing of a revised statement of income, on the ground that reversal of provision for diminution in value of investments, is of no avail. In absence of the revised return as provided under Section 139(5), the Assessing Officer is bound to make assessment on the basis of original return. Further, a change over from mercantile system to cash system is not permissible by filing a revised re .....

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return shall be frustrated and provision of said section becomes redundant. During the relevant time, as the assessee had maintained the accounts, it was bound to file the returns on that basis. 5.7 The Honble Supreme Court in the case of Goetze (India) Ltd. (2006) 284 ITR 323 (SC), held that the Assessing Officer has no power to entertain fresh claim made by the assessee after filing of the original return other than by filing of revised return. 5.8 Law is well settled that when the statute re .....

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Taylor (1876) 1 Ch.D.426; Nazir Ahmed v. King Emperor, AIR 1936 PC 253; Ram Phal Kundu v. Kamal Sharma and Indian Banks Association v. Devkala Consultancy Service AIR 2004 SC 2615). 5.9 Therefore, I am of the view that the Assessing Officer is justified in completing the assessment under Section 143(3) of the Income Tax Act on the basis of the original return filed under Section 139(1) without taking into consideration the revised statement filed subsequently in absence of the revised return as .....

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. In absence of the revised return as provided under s. 139(5), the AO is bound to make assessment on the basis of original return . Being aggrieved, appellant preferred an appeal before us in the present appeal. 3. We have heard the rival submissions and perused the material on record. The only issue in the present appeal is whether the AO was justified in ignoring the revised computation of total income submitted during the course of assessment proceedings on the ground that no revised return .....

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lways entertain a claim made before him by way of letter and in this context, it is relevant to refer to the judgements of the Hon'ble Delhi High Court in the following cases: i. CIT Vs. Sam Global Securities Ltd., [38 taxmann.com 129 (Delhi)]; ii. CIT Vs. Jai Parabolic Springs Ltd., [ 306 ITR 42] [172 taxman 258 (Delhi)] 3.1. Recently, the Hon'ble Madras High Court in the case of CIT Vs. Abhinitha Foundation P. Ltd., [83 taxmann.com 100] held as under: 12.5 A reading of the aforesaid ob .....

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sing Officer. The failure to advert to the claim in the original return or the revised return cannot denude the appellate authorities of their power to consider the claim, if, the relevant material is available on record and is otherwise tenable in law. Any other view, in our opinion, will set at naught the plenary powers of appellate authorities. 13. The judgment of the Division Bench of this Court rendered in Shriram Investments case (supra) , which is relied upon by the learned counsel for th .....

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ram Investments case (supra) is concerned, according to us, it has no applicability to the issue raised in the instant appeal. In that case, the Tribunal appears to have allowed the claim of the assessee for deduction under Section 35 B of the Act without examining the facts of the case. The assessee, evidently, had neither made a claim before the ITO nor the AAC nor, had he, furnished particulars of the expenditure incurred by it. It is in this context that the Supreme Court observed that the o .....

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a) is distinguishable, inasmuch as the assessee had neither made a claim before the ITO nor was any material placed on record in support of the claim. The High Court, in this context, held that the Tribunal was not justified in entertaining the claim made under Section 80G of the Act and thereupon, issuing a consequent direction to the ITO to examine the same on merits. 16.1 As would be evident from the narration of facts set out above, in the present case, the Tribunal has noted that relevant m .....

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h the High Court, inasmuch as it sustained the direction of the Tribunal issued to the ITO to grant appropriate relief qua claim made under Section 84 of the Act. 18. In sum, what emerges from a perusal of the ratio of the judgments cited above, in particular, the judgments rendered by the Supreme Court in Goetze's India Ltd.'s case (supra) and National Thermal Power Co. Ltd.'s case (supra), and those, rendered by the Division Bench of this Court in Ramco Cements Ltd. (supra) and Mal .....

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