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TMI Blog2017 (4) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... dditional CIT in the direction issued under section 144A of the Act that the revised return cannot be accepted, cannot change otherwise validity of the assessment. - Decided against assessee Assessing of income from plying of trucks - amount as reported in the original return of income as against the income declared by the assessee in the revised return - interpretation of clause (ii) of the section 44AE(2) - Held that:- The contention of the Revenue is not correct as during the relevant period, the assessee was having option of choosing a prescribed fixed sum towards profit from plying of goods carriages for declaration or higher amount declared in the return of income. The assessee has chosen the option of a prescribed fixed sum per month in the revised return of income, which has already been held by us as a valid return. The provision of assessing higher income out of two options has been made effective only from assessment year 2011-12 and not for the year under consideration. CIT-A is not justified in directing the AO to assess income from plying of goods carriages as was declared in the original return of income. Accordingly, we direct the Assessing Officer to compute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y inapplicable to the facts of the case of the appellant company and has further, placed reliance on the provisions not applicable on the facts of the assessee - appellant. 5. That the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in sustaining additions in the hands of assessee company, without giving any fair and proper opportunity of being heard to the appellant company. Thereby violating the principles of natural justice. 2. The facts in brief of the case are that the assessee company was engaged in business of plying of tankers and earned freight charges from its clients. For the year under consideration, the assessee filed return of income on 28/09/2010 declaring total income of ₹ 44,90,180/-. Subsequently, the assessee filed a revised return on 28/09/2011, in which the assessee declared the income from plying of tankers under presumptive scheme of taxation with reference to section 44AE (2) of the Act and total income was reduced to ₹ 12,84,334/-. The case was selected for scrutiny and notice under section 143(2) of the income tax Act, 1961 (in short the Act ) was issued on 01/08/2012 and complied with. In assessment pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that the assessee discovered error in the original return of income filed and accordingly he revised the return of income, in conformity with the provisions of section 139(5) of the Act. In view of the arguments, the Ld. counsel submitted that order of the lower authorities on the issue in dispute might be set-aside and the income as declared in the revised return of income might be accepted. 4. Ld. Senior DR, on the other hand, relying on the orders of the lower authorities submitted that the revised return filed by the assessee was not held as invalid and the Assessing Officer has not accepted the revised income reported in the revised return. He further submitted that the Assessing Officer has assessed the income is reported in the original return of income and in such circumstances the issue of completion of assessment beyond the period of limitation does not arise. He further submitted that the Assessing Officer has assessed the income following the clause (i) of section 44AE(2) of the Act, according to which if the profit reported in the return of income from goods carriage is higher than the profit estimated at the rate of ₹ 3,500/- per month, then the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of section 143 , notice in the case of the assessee could have been served till 30/09/2012 . In the case of the assessee notice under section 143 (2) was issued on 01/08/2012 and was duly served upon the assessee. In view of these facts, the contention of the Ld. counsel that assessment was barred by limitation, is not acceptable due to the reason that the revised return of income was a valid return and notice under section 143 (2) of the Act was served upon the assessee within the limitation period available as per provisions of the Act. In our opinion merely mentioning by the Additional CIT in the direction issued under section 144A of the Act that the revised return cannot be accepted, cannot change otherwise validity of the assessment. The Ld. CIT-A has also discussed this issue in para- 6.1 and 6.2 of the impugned order, which is extracted as under: 6.1 In my view the AO has stated that the revised income cannot be accepted and has taken the income as per the original return filed. The AO was acting on the directions issued by the Addl. CIT u/s 144A. The Addl. CIT has made a minor mistake. She should have stated that the revised income shown cannot be accepted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring which the goods carriage is owned by the assessee in the previous year or an amount claimed to have been actually earned from such vehicle, whichever is higher. 9. Thus, clause (i) of section 44AE(2) of the Act the during relevant period , consists of two parts connected by the word or . The first part lays down computation of income on estimate basis of prescribed fixed sum per month per goods carriage. The second part refers the income declared in the return of income, which is higher than the estimated income. Both parts of the clause (i) are connected by the disjunctive or . The sentence, whichever is higher of two, has been inserted w.e.f from A.Y.- 2011-12 only. Thus, during the relevant year, assessee was having option for choosing profit to be declared from the activity of plying goods carriages. The first option was to declare profit at the rate of a fixed prescribed sum per month per goods carriage. The second option was to offer the amount declared in the return of income, being higher than the first option. During relevant period, it was choice of the assessee to declare the income on estimate basis or to declare higher income from the business of ply ..... X X X X Extracts X X X X X X X X Extracts X X X X
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