TMI Blog2023 (8) TMI 958X X X X Extracts X X X X X X X X Extracts X X X X ..... aling with an issue of validity of a return only. We observe in these peculiar facts that sec. 246A envisages an appellate remedy before the CIT(A) not based on various consequences faced by an assessee or by way of necessary implications but as per various orders passed by the field authorities under the specified statutory provisions only. So far as the assessee s reliance on learned coordinate bench foregoing decision (supra) is concerned, we hold the same to be per inquirium only since not adopting stricter interpretation in above terms. Case law CIT vs. B.R. Constructions [ 1992 (6) TMI 13 - ANDHRA PRADESH HIGH COURT] holds that a judicial decision ceases to be a binding precedent in such a factual backdrop. We accordingly uphold the CIT(A)'s action rejecting the assessee s lower appeal against sec. 139(9) order as not maintainable u/ sec. 246A - Assessee appeal dismissed. - Shri Satbeer Singh Godara, Judicial Member And Dr. Dipak P. Ripote, Accountant Member For the Assessee : Shri Nikhil S. Pathak For the Revenue : Shri Ramnath P Murkunde ORDER PER SATBEER SINGH GODARA, JM : This assessee s appeal, for assessment year 2018-19, arises aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s very stand as under : 4. From the above reply, it clearly emerges that the assessee advanced three reasons leading to difference in the two figures, viz., conversion rates for recording the transactions; reimbursements; and reversals. Insofar as the first reason is concerned, rule 115 of the Income Tax Rules, 1962 (hereinafter called `the Rules ) provides that the rate of exchange for the calculation of the value in INR of any income accruing or arising etc. to the assessee in foreign currency etc. shall be the `telegraphic transfer buying rate of such currency on the `specified date . The term `specified date has been defined in Explanation (2) to rule 115, providing through clause (c), in relation to `Income from other sources payable in foreign currency and from which tax has been deducted, as, the date on which the tax was required to be deducted at source. The term `telegraphic transfer buying rate , in relation to a foreign currency, has been defined in the Explanation to rule 26 to mean the rate adopted by the State Bank of India for buying such currency, where it is made available to that bank through a telegraphic transfer. Pages 2 to 14 of the paper book contai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 143(1) of the Act, which deals with the processing of return. This section provides that: Where a return has been made u/s 139 ., such return shall be processed in the following manner . Clause (a) contains a list of six items given in sub-clauses (i) to (vi), requiring the making of adjustments in computing total income. Sub-clause (vi) mandates the making of an adjustment in the total income towards `addition of income appearing in Form 26AS or Form 16A or 16 which has not been included in computing total income in the return . The sub-clause (vi) was inserted by the Finance Act, 2016 w.e.f. 01.04.2017. The effect of this sub-clause is that if certain amount of income appearing in Form 26AS etc. is not fully or partly included in the total income returned by the assessee, then the AO will process the return u/s 143(1) and make adjustment by way of addition to the total income so computed by the assessee. The first proviso to the sub-clause (vi) provides that no such adjustments shall be made unless an intimation is given to the assessee of such adjustments either in writing or in electronic mode . The second proviso further states that the response received from the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under a specific provision, then it cannot be included in any general provision. We are reminded of the latin maxim generalia specialibus non derogant, which means that special provisions override general provisions. In view of the fact that clause (vi) of section 143(1)(a) of the Act specially covers a situation of mismatch in the amount of income returned and as appearing in Form 26AS requiring the making of an adjustment and that too, subject to two provisos, the same subject matter cannot be covered within the purview of Explanation (a) to section 139(9) of the Act so as to render a return defective on this score. It is so for the raison d`etre that the adjustment u/s 143(1) at the time of processing of return and the return becoming defective u/s 139(9) entail different consequences. 11. At this juncture, it is relevant to note that the third proviso to section 143(1)(a)(vi) was inserted by the Finance Act, 2018 w.e.f. 01.04.2018 providing: that no adjustment shall be made under sub-section (vi) in relation to return furnished for the assessment year commencing on or after 1st day of April, 2018 . A conjoint reading of the third proviso with the main sub-clause (vi) of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn of income. 12. Once a return of income is declared as non est as if it was never filed, there can be two possible situations. One, the assessee, knowing that it has income chargeable to tax, again files a fresh return and the second, the AO, having knowledge of the assessee having taxable income, issues a notice u/s 142(1)(i) requiring the assessee to file a return of income. Albeit section 142(1)(i) uses the word `may , but when the AO knows for sure that the assessee has income chargeable to tax but not filed return, it becomes obligatory on the part of the AO to issue notice under this provision, in the same way as it is necessary for the assessee, having taxable income, to file return of income. Now we consider the effect of the two situations in the facts and circumstances of the case under consideration. In the first possible situation, the assessee would have again filed its return with income of Rs.474.37 crore and the AO, sticking to his earlier stand, would have held such return invalid on the same premise, throwing the proceedings in a vicious circle resulting in an impasse. In the second possible situation, the AO, knowing pretty well that the assessee has inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gets covered within the ambit of clause (a) of section 246A(1). 15. Clause (i) of section 246A(1) of the Act deals with the filing of an appeal before the CIT(A) against an order u/s 237 of the Act. The latter section, in turn, provides that: `If any person satisfies the Assessing Officer that the amount of tax paid by him or on his behalf or treated as paid by him or on his behalf for any assessment year exceeds the amount with which he is properly chargeable under this Act for that year, he shall be entitled to a refund of the excess. Technically speaking, the AO has not passed an order u/s 237 but only u/s 139(9) of the Act. We have noticed above that firstly, the AO could not have treated the return as invalid u/s 139(9) of the Act because of mismatch between the figure of income shown in the return and that in Form 26AS and secondly, if at all he did so on a wrong footing, he ought to have issued notice u/s 142(1)(i) of the Act for enabling the assessee to file its return so that a regular assessment could take place determining the correct amount of income and the consequential tax/refund. Here is a case in which the assessee has been deprived by the DCIT (CPC), Bengalu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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