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TMI Blog2012 (8) TMI 556X X X X Extracts X X X X X X X X Extracts X X X X ..... r. In these circumstances, we restore the issue back to the file of the AO for adjudication afresh by passing a speaking order. - I.T.A.No.1272/Mds/2011 - - - Dated:- 29-6-2012 - SHRI N.S. SAINI, AND SHRI V. DURGA RAO, JJ. Appellant by : Shri Shaji P. Jacob, Addl. CIT Respondent by : Shri R.Sivaraman, Advocate O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER This is an appeal filed by the Revenue against the order of the CIT(A)-V, Chennai, dated 12.4.2011 by raising the following grounds of appeal: 1. The order of the Commissioner of Income Tax (Appeals) is opposed to the facts and circumstances of the case. 2. The Ld. CIT(A) erred in holding that the petition of the assessee under section 154 and 155(4) dated 09.03.2007 stands allowed and that the income of the assessee for the assessment year 2001-02 has to be recomputed. 2.1 It is submitted that the CIT(A) has in effect directed the assessing officer to re assess the income which is not in conformity with the provisions of section 155(4). 2.2 The Ld. CIT(A) failed to appreciate that the assessee filed the original return of income by declaring income under completed contract method which is contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re was no mistake apparent from record and therefore, the Assessing Officer has rightly dismissed the application of the assessee u/s 154 of the Act by observing that the request for rectification u/s 154 cannot be considered as it is not a mistake which is apparent from record. He submitted that in the decision of Hon'ble Supreme Court relied on by the CIT(A) in the case of ACIT Rajkot vs Saurashtra Kutch Stock Exchange Ltd (2008) 305 ITR 227(SC) scrutiny assessment u/s 143(3) was made and there was mistake in that assessment which was held by the Hon'ble Supreme Court as rectifiable u/s 154 of the Act for any mistake in the said order. In the instant case, as there was no scrutiny assessment, the decision of Hon'ble Supreme Court was not applicable to the facts of the assessee s case. He further relied on the decision of the Ahmedabad Bench of the Tribunal in the case of Choice Aquaculture (P) Ltd vs ITO I(4), [2006] 100 ITD 143, where it was held that the cumulative effect of the newly substituted section 143(1) and omission with effect from 1.6.1999 of section 143(1A), 143(1B) and 143(5) is that neither any prima facie adjustment can be made nor any levy of additional income ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer can amend any intimation passed u/s 143(1) of the Act. He also reiterated the submissions made before the CIT(A) and supported the order of the CIT(A). 6. We find that the CIT(A) has decided the issue by observing as under: 3. The facts of the case are that the appellant is a Private Limited Company subscribing to chits as its business activity. It is maintaining its accounts on mercantile basis, and computing loss or profit, as the case may be, at the end of the chit period in respect of chits terminating in a particular previous year following the completed contracts method. This method was followed right from the incorporation of the company. For the assessment year 2001-02 also, following the same completed contract method, the assessee filed a return declaring a loss of Rs.1,03,42,597/- and this was accepted by the assessing officer in his intimation u/s.143(1)(a) dated 08.07.02. 4. For the assessment years 90-91; 91-92; and 93-94, the assessing officer had held that the completed contract method followed by the appellant is not the correct method to ascertain the assessable income. He held that chit dividend received has to be taxed in the year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mputing the income, there is a mistake in the computation of income in the intimation u/s.143(1)(a) dated 08.07.02; that the assessing officer having taken action to revise the assessments of earlier years 1998-99 to 2000-01 u/s.147, has to revise the intimation dated 08.07.02 to follow the method of computation of income fixed by High Court; that the non consideration of the jurisdictional High Court's order as confirmed by the Supreme Court in the appellant's case itself is a mistake apparent from record which can be rectified u/s.154; and drew support from the Supreme Court decision in the case of ACIT Rajkot Vs Saurashtra Kutch Stock Exchange Ltd (2008)(173 Taxman 322 / 305 ITR 227). He further stated that since the assessment of earlier years' have been reopened u.s,147 and there has been a change in loss carried forward to assessment year 2001-02, the provisions of sec.155(4) are attracted for the assessment year 2001-02 and the intimation u/s.143 (1) (a) dated 08.07.02 has to be rectified. It is therefore stated by him that the order u/s.154 dated 08.07.02 of the assessing officer is not valid in law. He further stated that the method of computation fixed by the High Court's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified. This was sought for by the appellant in his application dated 09.03.2007 where it has been specifically mentioned as "Petition u/s. 154 and 155(4)" of the Act. The assessing officer has not discussed this aspect in his order dated 30.05.07. For the reasons discussed earlier, I hold that the intimation dated 08.07.02 needs to be revised u/s. 155(4) also. 10. In the result, the assessing officer's order dated 31.05.07 is set aside and the appellant's petition u/s.154 and 155(4) dated 09.03.07 is allowed. The assessing officer is directed to arrive at the income / loss of the year by following the method prescribed by the High Court and also determine the loss of earlier years to be carried forward. 8. We have heard the rival submissions and perused the orders of the lower authorities and materials available on record. In the instant case, the CIT(A) allowed the application filed by the assessee u/s 154 of the Act and directed the Assessing Officer to recompute the income of the assessee by taking into consideration the method of accounting settled in the case of the assessee in earlier year by the Hon'ble Madras High Court which was also subsequently affirmed by the Hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee, in the instant appeal, was seeking a relief which was not found in the return of income filed by it. The assessment, in the instant case, was framed under section 143(1) on the basis of return of income. The WDV taken by the assessee in the return of income was not the WDV as determined as per record for the immediate preceding year. Thus, any adjustment made with respect to WDV for the year under consideration to bring the said WDV in consonance with the WDV determined for the immediate preceding year was not finding supported by the return of income filed for the year under consideration. Thus, in absence of power to make any adjustment in the returned income, the Assessing Officer had rightly declined to rectify the order under section 143(1). [Para 7] As regards the contention of the assessee that as per provisions of section 154(1)(b), the Assessing Officer can amend any intimation passed under section 143(1), it might be observed that what cannot be done under section 143(1) cannot also be done by taking resort to section 154(1)(b). Making any adjustment to the returned income by way of provisions of section 154 will be amounting to do an act which cannot be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the law as pronounced by the Hon'ble Jurisdictional High Court and subsequently affirmed by the Hon'ble Supreme Court for the year under consideration any further investigation of facts is required or not. It is not clear from the decision of the CIT(A) that how the alleged mistake was apparent from record. It is a well settled position of law that when for application of a subsequent decision of the Hon'ble Jurisdictional High Court or Hon'ble Supreme Court further investigation into the facts is required then it cannot be held to be an apparent mistake. We further observe that both the parties before us have not filed the copy of rectification petition filed by the assessee before the Assessing Officer. We also find that the Assessing Officer has also not passed a speaking order. The Assessing Officer has held that the mistakes sought to be rectified by the assessee are not apparent mistakes but he has given no reasons for arriving at this conclusion. Such an unreasoned and non-speaking order cannot be appreciated. Thus, we find that the orders of both the lower authorities are not in order and the full facts have not been brought on record. In these circumstances, in our consi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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