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TMI Blog2017 (3) TMI 481X X X X Extracts X X X X X X X X Extracts X X X X ..... l-o the wisp as demanded by the assessee. The purported error committed by the assessee cannot be visualized under s.143(1) by any stretch of imagination. Thus, the relief urged on behalf of the assessee is clearly beyond the scope and ambit of section 143(1) of the Act. Hence, the action of the AO cannot be modified as sought. We note that as a remedial measure, s.139(5) provides for revision of the return filed within stipulated time where any person having furnished a return of income discovers any omission or any wrong statement therein. Therefore, scheme of Income Tax is not entirely without remedy for the purported mistake claimed to have been rectified by the assessee in the present appeal. The assessee has probably chosen a wrong path for seeking correction of the alleged error committed by the assessee itself. The AO (ACIT-CPC Bangalore) cannot be blamed for merely accepting an erroneous return filed by an assessee. Therefore, we are not in a position to travel beyond the scope of section 143(1) to entertain the relief sought. - Decided against assessee - I.T.A. No.111/RJT/2016 - - - Dated:- 16-2-2017 - SHRI RAJPAL YADAV, JUDICIAL MEMBER And SHRI PRADIP KUMAR KEDIA, ACC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity has been provided while passing appeal order. The intimation needs annulment. 12. Without prejudice, the determination is framed beyond statutory time limit. The intimation needs annulment. 3. As can be seen, the assessee has raised several grounds. However, the solitary grievance is towards accepting the income of ₹ 1,05,140/- in return filed under S.139 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) while processing intimation under s.143(1) of the Act by the ACIT CPC Bangalore. 4. Briefly stated, the assessee is partnership-firm. For the AY 2011- 12, the assessee filed return of income at ₹ 1,05,135/-. The return as filed by the assessee was accepted as such without any alteration and an intimation thereof under s.143(1) was processed. Consequently, tax demand of ₹ 40,490/- was raised on the assessee on the returned income. It is the case of the assessee that aforesaid Income of ₹ 1,05,135/- in the name of partnership-firm was divided among the partners towards their remuneration as can be vouched from the accounts of the assessee as well as in the computation of total income in respect of returned income. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sically to process return after making the following adjustments (only): 1) Any arithmetical error in the return; or 2) An incorrect claim, if such incorrect claim is apparent from any information in the return It is apparent that no mistake had been committed by the AO in the processing u/s.143(1) which had accepted the Returned Income as such. 5.3. Moreover, granting deduction u/s.40(b)(v) is subject to the authorization by the partnership deep. Now for giving debit of this amount on his own, AO would have been required to call for the copy of Partnership Deed and Act doesn t grant such power to the AO. Considering the above facts, I hold that AO has not erred in processing the return as prescribed u/s.143(1). 6.0 In the result, the appeal is dismissed. 6. Aggrieved by the order of the CIT(A), the assessee preferred appeal before the ITAT. 7. None appeared for the assessee in person. However, a written submission dated NIL was placed before us for its consideration. The written submission filed by the assessee is reproduced hereunder:- 1.1. At the out set it is humbly submitted that the issue involve in the matter is fully covered by the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he department every year. 3. This year in the return of income the amount of ₹ 1,05,135/- was shown and as per computation of income attached herewith after deduction of remuneration to the partners, Nil income was there. The remuneration to the partners, there being no specific column to show remuneration to the partners, the same was shown in this computation of income. Thus amount of ₹ 1,05,135/- is in fact remuneration to the partners and not assessable as income. [page No.: 7 and 8 ] 4.1. The Ld. A.O. without considering the statutory position as well as past records of the assessee, treated an amount of ₹ 1,05,135/- which is distributed among 2 partners as total income of the assessee and demanded tax amount of ₹ 40,490/-. The Ld. A.O. neither considered the records of the assessee nor gave any opportunity or notice to the assessee and therefore violating principals of natural justice. Thus instead of determining income as nil the Ld. A.O. erroneously determined income at ₹ 1,05,135/- which is in fact remuneration to the partners and shown by the partners in their respective accounts. 4.2 Not only this in the return of income th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation to the partners. In A.Y. 2015-16, the same is inserted which is enclosed herewith for kind perusal. 8. It is therefore humbly prayed that the income determined at ₹ 1,05,135/- may kindly be directed to be deleted and may kindly be directed to be taken at Nil. Alternatively, the matter may kindly be restored back to the Ld. A.O. to allow deduction of remuneration paid to the partners for after verification by giving an opportunity to the assessee. 3. The assessee also humbly reply on the following : Sushil Kumar Das v. ITO 1. 2011 Taxpub (DT) 1770 (Kol-Trib): (2011) 011 ITR (Trib) 0017 Held: The law imposed by the AO to assess the income according to law and determined the tax payable thereon. In doing so, the AO cannot assess the income of the assessee an amount which is not taxable as per law though shown by the assessee in the return. It is always open to the assessee to take a plea that the taxable income though shown as income is not taxable under law before the higher authorities therefore, the income offered as such was not liable to tax. It is a well settled that the principle for determining the taxable income of the assessee under the IT Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, there is no reason why the assessee should be prevented from raising that question before the Tribunal for the first time, so long as the relevant facts are on record in respect of that item. There is no reason to restrict the power of the Tribunal under s. 254 only to decide the grounds which arise from the order of CIT(A). Both the assessee as well as the Department have a right to file an appeal/cross-objections before the Tribunal. Tribunal should not be prevented from considering questions of law arising in assessment proceedings although not raised earlier.-Jute Corporation of India Ltd. vs. CIT (1990) 88 CTR (SC) 66 : (1991) 187 ITR 688 (SC): TC 7R.343 applied; CIT vs. Anand Prasad (1981) 128 ITR 388 (Del) : TC 8R.1021, CIT vs. Karamchand Premchand (P) Ltd. (1969) 74 ITR 254 (Guj) : TC 8R.547 and CIT vs. Cellulose Products of India Ltd. (1985) 44 CTR (Guj) 278 (FB) : (1985) 151 ITR 499 (Guj)(FB) : TC 8R.965 overruled. 3. Rajrani Gulati v/s. CIT Central Tilak - 346 ITR 543 - (Hon. All. H.C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebate as proposed on behalf of the assessee. 9. We have carefully considered the facts and circumstances of the case as narrated in the aforesaid paras. The short grievance of the assessee is that the return filed by the assessee itself ought to have been processed differently or an opportunity before raising the demand ought to have been given. It is pleaded that the demand raised on the assessee is without granting the benefit of payment of remuneration to its partners which is already disclosed in their respective returns. We ex-facie find this line of arguments raised on behalf of the assessee as incomprehensible and farfetched. As per the scheme of the Act, a return filed under the IT Act shall be processed in the manner to correct arithmetical error etc. and after making certain prima-facie adjustment as enumerated in section 143(1) of the Act. A bare reading of the section 143(1) suggests that the income returned by the assessee is the starting point and all the adjustments suggested to the returned income are broadly of detrimental nature. It is beyond scope of the AO under s.143(1) to engage in a long drawn process and make the adjustment proposed by the assessee wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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