2018 (2) TMI 761 - HC - Income Tax

Allowing the additional claim of the assessee without filing valid revised return - Held that - A perusal of the grounds of appeal raised before the Tribunal reveals that the same relate to taking of cognizance of the revised return filed after due date prescribed under section 139(5) of the Act. Insofar as the issue relating to the revised return is concerned, the same has attained finality by the earlier order passed by the Tribunal 2013 (3) TMI 783 - ITAT AHMEDABAD whereby the Tribunal allowed the cross appeal of the assessee and held that the decision in the case of Goetze (India) Ltd. v. CIT (2006 (3) TMI 75 - SUPREME Court) was limited to the power of the assessing authority only to entertain a claim for deduction otherwise than by filing revised return of income and it did not impinge upon the power of the appellate authority. Thereafter, the proceedings before the Commissioner (Appeals) were on the merits of the additional ground raised by the assessee. The order of the Commissioner (Appeals) has not been questioned by the revenue before the Tribunal. Accordingly, no question on the merits of the additional ground arises out of the impugned order.

Summary

Issues:
- Validity of revised return for additional claim
- Entitlement of expenses claimed without being debited to P&L Account

Analysis:

Issue 1: Validity of revised return for additional claim
The appellant revenue challenged the order of the Income Tax Appellate Tribunal, Ahmedabad 'B' Bench, regarding the validity of the revised return filed by the assessee after the due date. The revised return was filed to account for expenses amounting to ?90,97,755 that were not debited to the P&L account in the previous year. The Assessing Officer did not consider the revised return while finalizing the assessment. The Commissioner (Appeals) upheld the Assessing Officer's decision, stating that without a valid revised return, the claim of expenses could not be entertained. However, the Tribunal, following a previous High Court decision, allowed the cross objections of the assessee and remanded the matter to the Commissioner (Appeals) to decide the additional ground taken by the assessee on merits.

Issue 2: Entitlement of expenses claimed without being debited to P&L Account
Upon remand, the Commissioner (Appeals) examined the expenditure claimed in the revised return and found it to be genuine. The Commissioner noted that the Assessing Officer did not refer to the revised return in the assessment order. The Commissioner observed that the expenditure was not claimed twice, as the assessee added back the amount in the return of the succeeding assessment year. Consequently, the Commissioner directed the Assessing Officer to allow the expenditure of ?90,97,755 for the relevant year. The revenue appealed to the Tribunal, which upheld the decision of the Commissioner (Appeals).

In the absence of any legal question arising from the issues raised in the appeal, the High Court dismissed the appeal, emphasizing that the matter had already been settled in previous orders, and the revenue had not challenged those decisions before a higher forum.