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TMI Blog2013 (10) TMI 1456X X X X Extracts X X X X X X X X Extracts X X X X ..... ed return of income filed by the assessee. (b) Confirmation of disallowance made u/s. 40(a)(ia) of the Act in respect of the advertisement expenses. (c) Non consideration of claim for deduction of loss on clearance sale . 3. Though the assessee has raised two more grounds relating to jurisdiction of the Assessing officer and levy of interest u/s 234B of the Act, the Ld. Counsel did not argue on those grounds. Hence, they are not considered for adjudication. 4. The facts relating to the case are stated in brief. The assessee is engaged in the retail business in textiles. It filed its return of income for the year under consideration on 31-10-2006 declaring a total income of ₹ 6,37,550/-. The Department carried out search a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee for the disallowance to be made u/s 40(a)(ia) of the Act. 6. In the appellate proceedings, the Ld. CIT(A) also held that the assessee has filed the revised return only to reduce the tax liability and hence it is clearly an afterthought. Accordingly, the Ld CIT(A) held that the AO was justified in ignoring the revised return. In this regard the Ld. CIT(A) placed reliance on the following decisions: (a) CIT vs. Radhey Shaym (1980) (123 ITR 125) (All.) (b) CIT vs. Grey Cast Foundry Works (2006) (99 ITD 515)(Ahd.) The Ld. CIT(A) confirmed the disallowance made u/s. 40(a)(ia) of the Act on the reasoning that the assessee himself has disallowed the same in the revised return of income. The Ld CIT(A) also considered th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to mend with the sales, stock and profit figures. This is evidenced by the fact that during the course of survey, the value of stock found by the survey team was only 2.69 crores as against the book stock of ₹ 7.50 crores. Accordingly, the Ld. AR submitted that the assessee has corrected the above said mistakes by filing the revised return of income within the due date prescribed u/s. 139(5) of the Act. Accordingly, he submitted that the tax authorities are not justified in holding that the revised return of income filed by the assessee is an afterthought and rejecting the same. The Ld. Counsel for the assessee further submitted that the assessee has incurred advertisement expense on his own and it was not paid to others and hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. The first question that needs to be considered is whether the tax authorities are justified in declining to consider the revised return of income. We notice that the AO did not consider the same on the reasoning that the filing of revised return of income is an afterthought. The ld CIT(A) also agreed with the said view expressed by the AO and in this regard he placed reliance on the two decisions referred supra. We have carefully gone through the above said two decisions and find that they have been rendered in the context of penalty levied u/s 271(1)(c) of the Act. Hence, in our view, these two decisions do not support the view of the Ld CIT(A). 10. We notice that the assessee has filed original return of income on 31.10.2006, i.e. w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n do not fall in the category of omission or any wrong statement as stated in sec. 139(5) of the Act. We notice that the power to treat a return of income as invalid is given to the assessing officer u/s 139(9) of the Act. We notice that the AO has not followed the procedures laid down in sec. 139(9) of the Act for the purpose of rejecting the revised return of income. Thus, it is seen that the assessing officer has not drawn support from any of the statutory provisions for the decision taken by him to reject the revised return of income. The only reason given by the AO is that it is an afterthought on the part of the assessee. We have already noticed that the provisions of sec. 139(5) of the Act gives a right to the assessee to file a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO has not considered the revised return of income and further, since it goes to the root of matter, we are of the view that the entire issues urged before us needs fresh examination at the end of the AO. Accordingly, we set aside the order of Ld CIT(A) on all issues and direct the assessing officer to do the assessment de-nova on the basis of revised return of income filed by the assessee, after affording necessary opportunity of being heard to the assessee. Since we have quashed the order of Ld CIT(A) on the preliminary issue and since we have directed the AO to do the assessment de-nova, we do not find it necessary to adjudicate the grounds urged on merits. 15. In the result, the appeal filed by the assessee is treated as allowed for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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