2022 (6) TMI 596 - AT - Income Tax

Rejection of revised return - CIT(A) directing the Assessing Officer to consider the revised return - Whether AO has erred in law in not accepting the said revised return only on the ground the effect of such a wrong credit of income is not given in the Profit and Loss Account and further that once the accounts have been closed and balance sheet drawn, no variation in the accounts can be allowed? - HELD THAT - We are not disputing the legal position put forth by the counsel for the assessee that once revised return has been validly filed, the original return gets substituted by the revised return. However, in the instant facts we note that the genuineness of claim put forth by the assessee has not been examined at all by the Revenue. Neither the AO examined the factual aspect regarding the claim of the assessee and neither were the facts examined during the course of appellate proceedings. While, in principle we are in agreement that a validly filed revised return substitutes the original return, but at the same time, in the instant set of facts, the Revenue did not analyse the veracity of the facts/figures on the basis of which the return was revised by the assessee. Therefore, in the instant facts, in the interests of justice, we are setting aside the matter to the file of AO to examine the facts in detail and verify the claim of the assessee in the revised return. Accordingly, the matter is being set aside to the Assessing Officer with the above directions. Appeal of the Revenue is allowed for statistical purposes

Summary

Issues:
Appeal against the order of Ld. Commissioner of Income Tax (Appeals) - Validity of revised return - Acceptance of figures as per revised return - Jurisdiction of Assessing Officer to revert to original return - Examination of genuineness of claim by the assessee.

Analysis:
1. The Department appealed against the order of Ld. CIT(Appeals) directing the Assessing Officer to consider the revised return. The original return was filed within the prescribed time, but the assessee later realized accounting errors and filed a revised return. The AO rejected the revised return, stating that no variations are allowed once accounts are closed. However, the Ld. CIT(Appeals) held that a valid revised return replaces the original return, citing legal precedents. The CIT(Appeals) directed the AO to accept the figures as per the revised return, leading to the Department's appeal.

2. The Department contended that the genuineness of the assessee's claim was not examined and argued that the CIT(Appeals) did not analyze the facts before directing the AO to accept the revised figures. In response, the assessee explained the inadvertent accounting errors and highlighted that the AO did not challenge the revised figures' genuineness. The counsel emphasized that the revised return was filed within legal parameters, and once validly filed, it substitutes the original return.

3. The Tribunal acknowledged the legal position that a valid revised return substitutes the original return but noted the lack of examination of the claim's genuineness by the Revenue. Despite agreeing with the legal principle, the Tribunal found that the factual aspect of the claim was not scrutinized by the Revenue during assessment or appellate proceedings. In the interest of justice, the Tribunal set aside the matter to the Assessing Officer for a detailed examination of the facts and verification of the assessee's claim in the revised return. Consequently, the appeal of the Revenue was allowed for statistical purposes, and the matter was remanded to the Assessing Officer for further assessment.

This detailed analysis covers the issues involved in the legal judgment, including the validity of the revised return, acceptance of figures, jurisdiction of the Assessing Officer, and examination of the genuineness of the assessee's claim. The Tribunal's decision to remand the matter for further examination ensures a comprehensive review of the facts before reaching a final decision.