Case Law Details
Qayum Ismail Mukaddam Vs CIT (ITAT Mumbai)
The central issue in the case revolves around the retrospective applicability of changes introduced to sections 139(4) & 139(5) by the Finance Act 2016 in relation to the revision of a belated Income Tax Return (ITR).
Analysis : Mukaddam filed a belated return of income, which he later revised to declare a lesser income. The Assessing Officer (AO), however, dismissed the revised return on the basis that it was invalid as the original return was belated. Mukaddam contended that the revision was due to a clerical error he made when filing the original return.
The CIT upheld the AO’s decision, asserting that belated returns for the Assessment Year (AY) 2014-15 could not be revised according to the changes in the Finance Act, 2016. These changes, allowing the revision of belated returns, were only relevant from AY 2017-18 onwards.
The ITAT Mumbai agreed with the CIT’s decision, stating that the changes in sections 139(4) and 139(5) introduced by the Finance Act, 2016 were not intended to apply retrospectively. Thus, they found no merit in Mukaddam’s appeal.
ITAT Mumbai ruling brings to light the critical implications of retrospective applicability of legislative changes. This verdict reasserts that the changes brought by the Finance Act 2016 in sections 139(4) & 139(5) were not intended to be applied retrospectively.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) (‘ld.CIT(A) for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act’), pertaining to the Assessment Year (‘A.Y.’ for short) 2014-15.
2. As there was no representation on behalf of the assessee, we hereby proceed to hear the learned Departmental Representative (ld. DR for short) for the Revenue and peruse the material available on record.
3. The assessee has challenged the following grounds:
The learned A.O. rejected appellant’s request in considering the income details declared by him in his original return & making addition of Rs.15,43,460/- on the contention that revised return filed by him is invalid as the original return was filed belated. The learned A.O. had not considered the submissions such as Form 16, Bank statements, Form 26AS & also rectification order u/s. 154 of the Act for A.Y. 2014-15 passed by ITO which were made by appellant during the course of scrutiny proceedings. The learned CIT(Appeals) had rejected appellant’s request in dismissing the appeal stating that the assessed income computed by the A.O. as per original return of income filed by the appellant is justified. The appellant prays to ITAT to assess the real income of the appellant i.e. the income reported in the revised return of income. Even though the appellant made a mistake in filing original return, his clerical error should not burden him with additional tax on income which was not earned by him.
4. The brief facts are that the assessee had e-filed his return of income u/s. 139(1) of the Act dated 23.01.2015 declaring total income at Rs.77,84,860/-. The assessee then revised his return on 23.01.2015, declaring total income at Rs.62,41,400/-. The original return was duly processed u/s.143(1) of the Act by accepting the return of income filed by the assessee. The assessee’s case was then selected for scrutiny and assessment order dated 28.10.2016 was passed by the Assessing Officer (A.O. for short), determining the total income at Rs.77,84,860/- which was the income declared by the assessee in his original return.
5. The assessee was in appeal before the ld. CIT(A), challenging the order of the A.O. on the ground that the AO has failed to consider the revised return filed by the assessee which was declared as invalid for the reason that the original return was filed belatedly.
6. The ld. CIT(A) upheld the order of the AO for the reason that the belated return filed for AY 2014-15 cannot be revised and as per the Finance Act, 2016 belated return can be revised only when it is relevant to A.Y. 2017-18 onwards.
7. The assessee is in appeal before us, challenging the order of ld. CIT(A).
8. We have heard the submissions of the learned Departmental Representative (ld. DR for short) for the Revenue and perused the material available on record. It is observed that the assessee has filed his return of income and has also revised the returns on the same day declaring lesser income than that of the income declared in the original return. The assessee in its submission contended that due to oversight, the assessee has erroneously considered Form 16 of A.Y. 2013-14 for the purpose of filing tax return instead of considering Form 16 for the AY 2014-15. The assessee has further stated that he has filed his returns electronically by himself without availing the services of professionals and, hence, there was an error in considering Form 16 for A.Y. 2013-14 instead of AY 2014-15. The assessee further contended that the same may be verified by perusing the details disclosed in the said returns. It is also pertinent to point out that the assessee realizing that there was an error in the original return has immediately on the same day filed revised return. The lower authorities have failed to consider the revised return for the reason that the assessee has filed his return of income belatedly thereby denying the claim of the assessee as the new provision of sections 139(4) and 139(5) of the Act were introduced in the Finance Act, 2016 which was not applicable to the assessee’s case. The assessee has relied on the various decisions of the Hon’ble Jurisdictional High Court and also the decisions of the Tribunal which on perusal was distinguishable on facts of the present case and was not on similar facts as that of the present appeal. It is also pertinent to point out that there are varied decisions of various Hon’ble High Courts which has taken contrary views on this issue. The assessee has not relied on any of the decisions of the Hon’ble Jurisdictional High Court in this issue. As the changes brought about in section 139(4) and 139(5) of the Act by the Finance Act, 2016 was not intended to be applicable retrospectively, we find no merit in the submission of the assessee. Therefore, we are of the considered view that there is no infirmity in the order of the ld. CIT(A).
9. In the result, the appeal filed by the assessee is dismissed.
Order pronounced in the open court on 01.06.2023.
