Tripura State Electricity Corporation Limited Vs DCIT (ITAT Kolkata)
The Miscellaneous Application was filed by the assessee seeking rectification of the Tribunal’s order dated 19.12.2022 in ITA No. 297/GAU/2018. The assessee contended that paragraph 9 of the Tribunal’s earlier order incorrectly referred to 17.03.2016 as the date of filing of the revised return, whereas the revised return had actually been filed on 23.02.2015. It was submitted that the Assessing Officer had admitted this date in the remand report before the CIT(A), and the Tribunal’s reliance on the incorrect date had led it to an erroneous conclusion. The assessee therefore requested rectification of the alleged mistake.
The Tribunal first referred to its earlier order, which had examined the interplay between Sections 143(2) and 139(5) of the Income Tax Act. It had observed that a valid return had originally been filed under Section 139(1) and that a notice under Section 143(2) had been issued within the prescribed time, thereby validly initiating assessment proceedings. The controversy before the Tribunal in the original appeal was whether the absence of a fresh notice under Section 143(2) after the filing of a revised return rendered the assessment void or constituted only an irregularity. The Tribunal had concluded that while the revised return replaced the original return for determining taxable income, non-issuance of a fresh notice under Section 143(2) in such circumstances amounted only to an irregularity and not an illegality. Consequently, it had set aside the order of the CIT(A) and restored the matter to the Assessing Officer for re-determination of taxable income after considering the revised return and granting the assessee an opportunity of hearing.
While deciding the Miscellaneous Application, the Tribunal held that the reference to 17.03.2016 in paragraph 9 of its earlier order was not intended to describe the facts of the assessee’s case. It explained that the date was used merely as a hypothetical example to illustrate the practical operation of Section 139(5), particularly a situation where an assessee files a revised return immediately before the assessment order is passed, making it impracticable for the Assessing Officer to issue a fresh notice under Section 143(2). The Tribunal observed that the actual date of filing of the revised return, namely 23.02.2015, had never been disputed and had already been noted in paragraph 3 of the original order.
The Tribunal further observed that the assessment year involved was 2013-14, the revised return had admittedly been filed on 23.02.2015 within the statutory period prescribed under Section 139(5), and the illustrative reference to 17 March had no bearing on the adjudication of the issues involved in the appeal. Although the Tribunal acknowledged that the illustration could have been expressed more elaborately, it held that it had not influenced its reasoning or the conclusion that the CIT(A) had erred in construing the legal position. Accordingly, the Tribunal found no apparent error in its earlier order warranting rectification and dismissed the Miscellaneous Application.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
Before taking note of this specific error pointed out by the assessee in its Miscellaneous Application, we deem it appropriate to take note of the Tribunal’s finding dated 19th December, 2022 from paragraphs no. 6 to 10 in ITA No. 297/GAU/2018, which read as under:-
“6. We have duly considered the rival contentions and gone through the record carefully. We are of the view that section 143(2) has a direct bearing on the controversy. Therefore, it is salutary upon us to take note the relevant part of this section, which reads as under:-
“143(2): “50. Substituted by the Finance Act, 2016, w.e.f. 1.6.2016. Prior to its substitution, sub-section (2), as amended by the Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1.4.1989, Finance (No. 2) Act, 1991, w.e.f. 1.10. 1991, Finance Act, 2002, w.e.f. 1.6.2002, Finance Act, 2003, w.e.f. 1.6.2003 and Finance Act, 2008, w.e.f. 1.4.2008, read as under:-
(2) Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer shall,-
(i) where he has reason to believe that any claim of loss, exemption, deduction, allowance or relief made in the return is inadmissible, serve on the assessee a notice specifying particulars of such claim of loss, exemption, deduction, allowance or relief and require him, on a date to be specified therein to produce, or cause to be produced, any evidence or particulars specified therein or on which the assessee may relief, in support of such claim:
Provided that no notice under this clause shall be served on the assessee on or after the 1s t day of June, 2003;
(ii) notwithstanding anything contained in clause (i), if he considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not underpaid the tax in any manner, serve on the assessee a notice requiring him, on a date to be specified therein, either to attend his office or to produce, or cause to be produced, any evidence on which the assessee may relief in support of the return:
Provided that no notice under clause (ii) shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished”.
7. A bare perusal of this section would reveal that where a return has been furnished under section 139 or in response to a notice under sub-section (1) of section 142, the ld. Assessing Officer or the prescribed income-tax authority if considers it necessary or expedient to ensure that assessee has not understated income or has not computed excessive loss or has not underpaid tax in any manner serve on the assessee, a notice requiring him on a date to be specified therein to produce any evidence on which the assessee may rely in support of the return. In other words, this section has two compartments, the first compartment is that this section provides that a notice should be issued within the time limit provided in the proviso to this section.
8. The second compartment of this section is that it provides an opportunity to an assessee as to what it wants to submit in support of the claim made in a return. The Hon’ble Courts are unanimous on the points that if no such notice is issued within the time limit, then assessment proceedings would be void ab initio. However, the situation in the present case is altogether different. A valid return was filed by the assessee under section 139(1) on 26.09.2013. Within the time limit available under section 143(2), a notice was issued to the assessee under this section inviting it to submit any evidence in support of its return of income. In other words, the assessment proceedings were set into motion. Now section 139(5) provides two situations to an assessee for revising its return of income, namely if an assessee after furnishing the return under section 139(1) or in response to notice under section 142(1) discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the expiry of one year from the end of relevant assessment year or before the completion of the assessment, whichever is earlier. The assessee has filed the revised return no doubt within one year from the end of the assessment year 2013-14 as well as before the end of the completion of the assessment proceedings.
9. The short controversy before us is whether non-issuance of a notice under section 143(2) on the revised return would be illegality which can render the assessment order beyond the jurisdiction of the ld. Assessing Officer in this situation or it was a mere irregularity. The judgments, which are being referred by the ld. Counsel for the assessee are concerned, they propound that when revised return is being filed, then original return would obliterate. In other words, the original return would become redundant and the determination of taxable income is to be made on the basis of revised return. In none of the cases, it has been propounded that 143(2) notice was must on the revised return, otherwise whole assessment proceeding would vitiate. Let us explain the situation in a different manner also. Section 139(5) authorizes the assessee to file the return before completion of the assessment order. In the present case, assessment order has been passed on 18.03.2016. Hearing must have been concluded 2-3 days prior to this date because ld. Assessing Officer has to draft the assessment order. On 1 7th March, assessee filed a revised return without the knowledge of the ld. Assessing Officer because such return in A.Y. 2013-14 would be filed at the receipt counter. Can assessment order would be declared nullity for not issuing 143(2) notice on such return, because it is quite impossible at the end of the ld. Assessing Officer to take cognizance of such a fact in such a short period of time. This type of step can be taken at the end of an assessee for frustrating the whole assessment machinery. Yes, once a revised return is being filed, certainly its figure can be taken into consideration as propounded in the various decisions cited by the ld. Counsel for the assessee. Therefore, in our opinion, it was only an irregularity and not an illegality. It could have been cured by the ld. 1s t Appellate Authority by calling a remand report from the ld. Assessing Officer after re-determination of the income on the basis of revised return, but to declare the assessment order as a null and void is not in accordance with law.
10. On due consideration of all these facts and circumstances, we set aside the impugned order of the ld. CIT(Appeals) and restore this issue to the file of the ld. Assessing Officer. The ld. Assessing Officer is directed to re-determine the taxable income of the assessee after taking the details from the revised return of income. This exercise be carried out after providing due opportunity of hearing to the assessee”.
2. The assessee has made a reference to paragraph 9 of the Tribunal’s order and submitted that Tribunal has made a mention of 17th March, 2016 as the date of filing of the revised return, which is an incorrect date. The revised return was filed on 23.02.2015 and this fact was admitted by the ld. Assessing Officer in the remand report filed before the ld. CIT(Appeals) vide letter dated 02.07.2018, which has also been reproduced. Therefore, ld. Counsel for the assessee submitted that Tribunal has assumed a wrong date on which the alleged revised return was filed, which goad the Tribunal to arrive at wrong conclusion. He prayed that this date be rectified.
3. On the other hand, ld. D.R. relied upon the order of the Tribunal.
4, We have duly considered the rival contentions and gone through the record carefully. A perusal of paragraph no. 9 of the Tribunal’s order would indicate that mention of 17th March was not conceived by the Tribunal as revised return filed by the present assessee. This date was mentioned for explaining the scope of section 139(5), which provides for revising its return of income, namely if an assessee after furnishing the return under section 139(1) or in response to a notice under section 142(1) discovers any omission or any wrong statement therein, he may furnish a revised return at any time before expiry of one year from the end of the relevant assessment year or before the completion of assessment year, whichever is earlier. The factum of filing of the revised return on 23.02.2015 was never in dispute and was duly noticed by the Tribunal in paragraph no. 3 of the order also. We have explained this scope of section 139(5), i.e. such revised return could be filed within one year from the end of relevant assessment year or before completion of the assessment, whichever is earlier. A reference to 17th March was to the effect that in a case if an assessment order was passed on 18.03.2016 and assessee has filed the return on 17.03.2016, then, where is the chances for the ld. Assessing Officer to issue notice under section 143(2). This reference has nothing to do with adjudication of the controversy otherwise involved in the appeal. It is pertinent to observe that the assessee has filed the return within one year before the end of the relevant assessment year. In other words, assessment year involved 2013-14. One year from this A.Y. would end on 31.03.2015. The assessee has already filed the revised return on 23.02.2015, therefore, reference of 17/03 as filing of the return is at all not meant for the present year. It was a reference only to explain the scope of section 139(5). In other words in a given situation if assessment order was going to be passed within one year from the end of the relevant assessment year, then, if an assessee files revised return one day prior to passing of the assessment order, it will not be practical for the ld. Assessing Officer to serve 143(2) notice. There is no apparent error in the order of the Tribunal whereby it has mentioned 17th March. It was just for an example for explaining the scope of 139(5). We agree that it could have been in a more elaborate manner but it has not impacted upon the formation of opinion at the end of the Tribunal for holding that ld. CIT(Appeals) has erred in construing the position of law. Accordingly this Miscellaneous Application is dismissed.
7. In the result, the Miscellaneous Application filed by the assessee is dismissed.
Order pronounced in the open Court on 10.10.2023.
