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TMI Blog2013 (2) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... K.K. Gupta, Accountant Member - The appeal by the Revenue for the Assessment Year 2007-08 is against the order dt.19.1.2012 of the CIT(A), raises the following grounds: 1. In the facts and circumstances of the case, the ld. First Appellate Authority is not justified in directing for acceptance of the loss in the revised return especially when the books of account were not produced for verification before the AO even at appellate stage and the discrepancies in the figures in the revised return vis-a-vis original return could not be explained. 2. In the facts and circumstances of the case the ld. CIT(A) is not at all justified in directing to accept the loss mentioned in the revised return filed u/s. 139(5) as the original loss return had been filed in time u/s. 139(1) before the AO having regard to the judgment of Hon'ble Madras High Court in CIT v. Periyar District Cooperative Milk Producers Union Ltd [2004] 266 ITR 705, which was not the real issue involved in the impugned assessment order. The AO has disallowed the total loss claimed for non-production of books of account and details asked for during the assessment proceedings. 2. Cross objection has been filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. Special Leave Petition has also been dismissed in this case (2004) 270 ITR (St.) 3. The AO has not made any specific enquiry on the income/expenditure of the appellant which could have made an impact on the loss shown by the appellant in the revised return. Therefore, following the judgment of the Hon'ble Madras High Court in CIT v. Periyar District Cooperative Milk Producers Union Ltd. [2004] 266 ITR 705, the AO is directed to accept the loss as shown by the appellant in the revised return." 5. The learned CIT-DR submitted that the learned CIT(A) was not justified in accepting the loss in the revised return specifically when books of account were not produced for verification before the Assessing Officer and even at appellate stage. Having considered the time available for filing the revised return u/s. 139(5) it was not the case of the Assessing Officer to bring the discrepancy in record insofar as the learned CIT(A) has allowed the brought forward losses not indicated in the original return but by way of a revised return only. Section 139(1) clearly indicates that a loss return has to be u/s.139(1) and 139(5) which as a matter of error has been allowed by the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 139(3), makes it clear that a return of loss filed under section 139(3) may be filed within the time allowed under section 139(1). Once such a return is filed, all the provisions of the Income-tax Act shall apply as if such return has been filed under section 139(1). This position is clear from the expression - all the provisions of this Act shall apply as if it were a return under sub-section (1). In other words, a return filed under section 139(3) is deemed to be a return filed under section 139(1). In view of such a specific provision there is no reason to exclude the applicability of section 139(5) to a return filed under section 139(3)." The learned Counsel for the assessee submitted that the assessee filed the return of Income u/s 139(3) of Income-tax Act 1961 within the time allowed u/s 139(1) i.e., within the due date of filing the return and subsequently we find that in the original return we have committed some mistake bona fidely then we revised the return of income u/s 139(5) of Income-tax Act. The return is revised within the time-limit u/s.139(5). In support thereof he relied upon the following case laws. 1. It is to be noted also that once a revised return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hartered Accountants. The Audit report was signed Mr. Rabindra Kumar Dash, Memb. No. 6058679 on 30.09.07. However at the time of filing the return, the ITR-5 was duly filed up subsequently when it comes to the knowledge of the auditor that the Self Asst. Tax of Rs. 1,98,000/- paid on FBT is varied from the original return which reflects Rs. 1,97,998/-, the revised return was filed. The discrepancies found in the return is due to the different grouping of the major heads. The case was transferred from ACIT, Circle-1(2) to ACIT, Circle-2(2). Cuttack vide jurisdiction order passed by the CIT, Cuttack. No reasonable opportunity of being heard is given to the assessee as per sec. 127(1). Therefore, transfer of jurisdiction is illegal. Therefore, the learned CIT(A) is justified in directing the Assessing Officer to accept the loss as shown in the revised return. 8. Addressing to the cross objection filed by the assessee, the learned Counsel for the assessee submitted that the Assessing Officer has mentioned in the first para of Assessment Order that "the assessee was availing the benefit of exemption u/s 10(20A) of the Income-tax Act 1961". The assessee grossly disagreed with the abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en restricted to the Panchayats and Municipalities as referred to in Articles 243(d) and 243P(e) of the Constitution of India respectively, Municipal Committees and District Boards, legally entitled to or entrusted by the Government with the control or management of a Municipal or a local fund and Cantonment Boards as defined under section 3 of the Cantonments Act, 1924. 12.3 The exemption under clause (20) of section 10 would, therefore, not be available to Agricultural Marketing Societies and Agricultural Marketing Boards etc. despite the fact that they may be deemed to be treated as local authorities under any other Central or State legislation. Exemption under this clause would not be available to Port Trusts also. 12.4 This amendment will take effect from 1st April, 2003 and will, accordingly, apply in relation to the assessment year 2003-2004 and subsequent assessment years." The learned Counsel for the assessee submitted that from instruction 12.3 in the above Circular, it is crystal clear that exemption under sub-section (20) of section 10 would not be available to the assessee w.e.f. 1.4.2003. However, nothing is stated for the period preceding 1.4.2003 which clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the cross objection, relied on the order of the learned CIT(A). 10. We have heard the rival submissions and perused the impugned orders of the authorities below and the material on record. On consideration of the facts and circumstances of the case, we are inclined to hold that the assessment has not been made in accordance with the provisions of the Income-tax Act. The discrepancies brought on record have culminated into rejection of the books result could not wash away the fact finding insofar as the assessee continues to be a local authority which it was prior to Assessment Year 2003- 04. The submissions of the learned Counsel for the assessee on the issue of the learned CIT(A) upholding the status of the assessee by the Assessing Officer as Artificial Juridical Person and not a local authority has not been in accordance with the provisions of the I.T. Act insofar as inference of a local authority in a broader sense was held by him was no longer possible in view of the amendment by way of insertion of Explanation in Finance Act, 2002 w.e.f. 1.4.2003 would only lead to a finding that it is an Artificial Juridical Person. When the basic finding of the Assessing Officer with r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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