1 INCOME TAX APPELLATE TRIBUNAL PUNE BENCH "B", PUNE Before Shri Shailendra Kumar Yadav Judicial Member and Shri R.K. Panda Accountant Member ITA No. 1425/PN/2012 (Assessment Year 2009-10) M/s. C.G. Lucy Switchgear Ltd., F-10, MIDC Ambad, Nashik - 422010 .. Appellant PAN No.AAACC 9268P Vs. ACIT(CPC), Bangalore .. Respondent Assessee by : Sri Pradip N. Kapsi Department by : Sri Tejendra Singh Date of Hearing : 12-10-2012 Date of Pronouncement : 17 -10-2012 ORDER
PER R.K. PANDA, AM :
This appeal filed by the assessee is directed against the order dated 26-04- 2012 of the CIT(A)-I, Nashik relating to Assessment Year 2009-10.
2. The assessee in the ground of appeal has challenged the order of the CIT(A) in confirming the rejection of rectification application filed u/s.154 by the ACIT (CPC).
3. Facts of the case, in brief, are that the assessee is engaged in manufacturing of switch gears, parts, assemblies and components used in switch gears. He filed its return of income on 29-09-2009 declaring total income of Rs.8,51,28,880/-. The Assessing Officer of CPC issued intimation u/s.143(1)(a) on 25-03-2011 determining the total income at Rs.9,21,21,387/- wherein addition to the tune of Rs.84,01,350/- was made. The assessee made an application u/s.154 which was rejected by the ACIT(CPC).2
4. Before the CIT(A) it was submitted that certain items which were disallowed by the assessee has again been added by the CPC, the details of which are as under:
Particulars Amount Fine & Penalty 1,05,814/- Expenses u/s.40(a)(i) 65,520/- Gratuity 3,05,064/- Leave Encashment 1,64,115/- Unproved superannuation fund 7,99,350/- Bonus Payable 4,07,239/- Depreciation as per Company Act 65,54,246/- Total 84,01,348/-
It was submitted that since the above disallowable items have already been added by the assessee company in the income and paid tax on it, therefore, adding these items again will amount to double taxation on the same amount. It was further submitted that at the time of filing of original return the date of payment of dividend distribution tax was wrongly entered in the return which has since been rectified in the data submitted in response to rectification u/s.154. However, this was also not considered by the ACIT(CPC) while processing the rectification application which resulted into interest u/s.115P. It was accordingly submitted that the CIT(A) should direct the ACIT (CPC) to rectify the order.
5. However, the learned CIT(A) was not convinced with the arguments advanced by the assessee and rejected the appeal filed by it by holding as under :
"5. I have carefully considered the facts of the case. The intimation u/s.143(1) and the arguments and written submissions made on behalf of the assessee. This is a case of e-filed return by the assessee in ITR-6. For the purpose of procession of return u/s.143(1), the CBDT has set up a Central Processing Centre (CPC) with a view to expeditiously determine the tax payable by or the refund due to an assessee is required u/s.143(1). Under the scheme of e-filing of return the assessee is duty bound to correctly report the data in respect of profits and gains of business or profession or any other claim or deduction under the proper head by filling up the correct Schedule 'BP'. 5.1 Admittedly, the assessee has filled up incorrect schedule BP and the ACIT(CPC) did not issue any notice u/s.139(9) of the Act. Therefore, there is no issue of any defective return. This is because incorrect filing of Schedule BP does not make a return defective. Furnishing of evidence and correct information in respect of any claim/allowance while filling up correct schedule BP is the pre-requisite condition to be fulfilled by the assessee. It is settled position of law that the sums disallowed as prima- facie inadmissible u/s.143(1) in the absence of requisite information in the correct columns of the returns, cannot be subsequently allowed u/s.154.3
5.2 There is a plethora of judgments which have ruled that the scope of the powers to make prima facie adjustment u/s.143(1) is some what co-terminus with the powers to rectify a mistake apparent from the record u/s.154. Therefore, in case where exemption/deduction claimed is disallowed as prima facie inadmissible for want of proper and correct data in the return itself, cannot be subsequently allowed by a rectification order u/s.154. In this case, the assessee has admittedly filled up correct information in the schedule BP. A strict view is necessary in this regard because if the Department condones such lapses in the initial stage of filing of e-returns by Corporate entity like the present assessee, a tendency may develop amongst tax payers not to file relevant columns in the Schedule BP at the time of filing e-return and then make a claim by putting in an application u/s.154. This tendency would unnecessarily increase infructuous work for the Department. Therefore, as the assessee has admittedly filled up incorrect Schedule BP, the ACIT(CPC) was justified in rejecting the assessee's application u/s.154. While rejecting the application u/s.154 the ACIT(CPC) vide communication dated 25/08/2011 has given the reason "It was noticed that the assessee has wrongly filled Schedule BP. Hence mistake is not rectified in this order. 5.3 In view of the above facts and in the circumstances, no apparent mistake exists which could have been rectified. In the result, there is no merit in this appeal and the AO's action in rejecting the application u/s.154 vide order dated 25/08/2011 is confirmed. This ground of appeal is, therefore, dismissed.
6. In the result, the appeal is dismissed".
5.1 Aggrieved with such order of the CIT(A) the assessee is in appeal before us.
6. The learned counsel for the assessee reiterated the same submissions as made before the CIT(A) and relied on the following case decisions :
1. Ambala Central Co-operative Bank, ITA No.332(CHD) of 2012, dt.23-05-2012.
2. High Court of Delhi, W.P. (C) 2659/2012 dt. 04-05-2012.
3. High Court of Delhi, E.P. (C) 2659/2012 dt. 31-08-2012.
4. Sanchit Software and Solutions (P) Ltd. Vs. CIT, 25 taxmann.com 123 (Bombay).
5. DCIT Vs. Raj Laxmi Store Crusher, 21 taxmann.com 475 (Delhi) (Trib).
He submitted that the items which were added by the ACIT (CPC) have already been disallowed by the assessee suo-moto while filing the return of income and paid tax on it. Therefore, adding the same amount twice will amount to double taxation of the same amount. He submitted that due to certain errors while processing the e-return certain mistake has crept in. Therefore, in the interest of substantial justice the ACIT(CPC) should be directed to rectify the order. He submitted that a separate rectification application filed before the AO is also pending for disposal. Since the amount of Rs.84,01,350/- has already been added by the assessee while filing the return of income, therefore, the ACIT(CPC) should 4 be directed to rectify the mistake. In his alternate contention he submitted that the matter may be restored to the file of the AO with a direction to make necessary verification and pass appropriate order.
7. The learned DR on the other hand while supporting the order of the learned CIT(A) submitted that in the interest of justice he has no objection if the matter is restored to the file of the AO for doing necessary verification and passing appropriate order.
8. After hearing both the sides we find due to certain errors the items disallowed by the assessee has again been added by the ACIT(CPC) for which huge demand has been raised against the assessee. If an item has already been disallowed by the assessee itself the same cannot be disallowed again in an assessment either u/s.143(1) or u/s.143(3). We do not find any logic in the observation of the CIT(A) that a strict view is necessary for such cases because if the Department condones such lapses in the initial stage of filing of e-returns by Corporate entities, a tendency may develop amongst tax payers not to file relevant columns in the Schedule BP at the time of filing e-return and then make a claim by putting an application u/s.154.
9. From the various decisions filed by the learned counsel for the assessee, we find under somewhat similar circumstances the Courts/Tribunals have allowed the rectification petitions filed by the assessees. Considering the totality of the facts of the case and considering the fact that the addition of the same amount twice will amount to double taxation, we, in the interest of justice deem it proper to restore the issue to the file of the AO with a direction to consider the rectification application filed by the assessee and pass appropriate orders at the earliest after due verification. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.5
10. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Pronounced in the open court on this the 17th day of October, 2012.
Sd/- Sd/- (SHAILENDRA KUMAR YADAV) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER Pune Dated: the 17th October 2012 satish Copy of the order forwarded to : 1. Assessee 2. Department 3. CIT(A)-I, Nashik 4. The D.R, "B" Pune Bench 5. Guard File By order // True Copy // Senior Private Secretary ITAT, Pune Benches, Pune