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TMI Blog2024 (8) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... in the income chargeable to tax falling below the threshold as declared in its Return of Income. HELD THAT:- Any doubt which could have possibly been harboured in this respect in any case stands laid to rest bearing in mind the recent judgment rendered by the Supreme Court in Wipro Finance Ltd. [ 2022 (4) TMI 694 - SUPREME COURT] As would be evident from a reading of paragraph 10 of the report, an identical objection appears to have been raised on behalf of the Revenue with it being contended that since the assessee had taken a particular position with respect to an item of expenditure in the return, not only was the Tribunal disentitled in law to entertain a fresh claim, the same in any case could not have been taken into consideration for the purposes of according relief to the assessee. While ordinarily an assessee may be bound by the Return of Income as furnished, in case the Tribunal were to admit a question and proceed to accord relief, the same cannot be denied or be made subject to a Return of Income being revised. The insistence of the respondents on a revision of the return being a precondition clearly fails to take into consideration the plenary powers which stand confe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is held that assessed income shall not be less than returned Income. Reference can also be placed on the SC judgment the in case of Commissioner of Income-tax vs Sun Engineering Works (P.) Ltd (Civil Appeals No. 3251-52 of 1979) wherein in context of s. 147, the SC held as under: The assessee cannot claim re-computation of the income or redoing of an assessment and be allowed a claim which he either failed to make 15. In view of above, considering the assessee has itself filed revised return by revising its original return and thereafter, again filed additional grounds requesting to make correction in revised return is nothing but a change in stance by the assessee multiple times. 16. Thus, the claims made by the assessee in respect of additional claim raised before the Hon'ble Tribunal, as regards Liaison office is not accepted. Further, the considering the preceding and succeeding years the gross profit 2.75% was taken by the assessee by itself therefore, the same rate is considered for attribution of profit for LO income. 3. After the writ petition had been entertained, we had also taken note of a final assessment order which had come to be framed pursuant to the aforesa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere necessitated in light of the settlement which had been arrived at with the respondents in earlier years. However, the AO while framing an order of assessment on 31 December 2008 refused to accept the aforesaid declarations and thus chose not to proceed in accordance with the settlement which had been alluded to. 5. Aggrieved by the aforesaid action, and which, according to the writ petitioner, constituted a departure from the stand as taken for AYs 1998-99 to 2004-05, the petitioner, in its appeal preferred before the Commissioner of Income Tax (Appeals) [CIT(A)] added additional grounds assailing the aforesaid view as taken by the AO. The CIT(A), however, in terms of its order of 02 August 2011 dismissed those additional grounds. For purposes of clarity, we extract the additional grounds which were sought to be introduced hereinbelow:- 1. That on the facts of the case and in law, the Assessing Officer has erred in taxing purchases while taxing sales and not excluding the turnover from export of goods from India while computing the total income attributable to the activities of the Liaison Office ('LO ) in complete disregard of the provisions of Income tax Act, 1961 ( Act ) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of the case and in law, the Assessing Officer erred in applying the rate of 50% for the purpose of attributing income to the operations of La without considering the fact that the major revenue generating activities were performed outside India and not by the LO. 6. Aggrieved by the aforesaid, the petitioner approached the Income Tax Appellate Tribunal [Tribunal] and which while dealing with the aforenoted deviations held as follows:- 12. We are of the considered view that when the ld. CIT (A) has admitted the additional grounds raised by the assessee to decide the issue on merit, the issue was not to be decided by the ld. CIT (A) on the basis of agreed settlement formula by applying the rule of consistency. The ld. CIT (A) has merely decided the issue pertaining to applicability of correct gross profit rate by applying the rule of consistency. The Ld. CIT (A) has also decided the applicability of gross profit rate of 10% pertaining to DMRC project but has not decided the issue of exclusion from turnover. Ld. CIT (A) in order to test the applicability of gross profit rate of 10% has merely relied upon the order of AY 2006-07. All other grounds remained unadjudicated. 13. In vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ckdrop that learned counsel drew our attention to some of the significant amendments introduced in Section 143 (3) of the Income Tax Act, 1961 [Act] as was applicable for AY 2005-06 and constituting the year under consideration. The amendments so introduced in Section 143 (3) of the Act as contrasted with how that provision stood when CBDT Circular 549/1989 had come to be issued was sought to be highlighted by way of the following table:- Section 143 (3) as applicable for AY 1989-90 Section 143 (3) as applicable for AY 2005-06 to AY 2008-09 (post amendment) (3) On the day specified in the notice issued under sub-section (2), or as soon afterwards as may be, after hearing such evidence as the assessee may produce and such other evidence as the Assessing Officer may require on specified points, and after taking into account all relevant material which he has gathered, the Assessing Officer shall, by an order in writing, make an assessment of the total income or loss of the assessee, and determine the sum payable by him on the basis of such assessment . (3) On the day specified in the notice-issued under clause (1) of sub-section (2), or as soon afterwards as may be, after hearing suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion is that the power of the Tribunal under section 254 of the Income-tax Act, 1961, is to entertain for the first time a point of law provided the fact on the basis of which the issue of law can be raised before the Tribunal. The decision does not in any way relate to the power of the Assessing Officer to entertain a claim for deduction otherwise than by filing a revised return. In the circumstances of the case, we dismiss the civil appeal. However, we make it clear that the issue in this case is limited to the power of the assessing authority and does not impinge on the power of the Income-tax Appellate Tribunal under section 254 of the Income-tax Act, 1961. 13. It was further urged that the position in law as enunciated in Goetze and which recognizes an exception in case of an order of the Tribunal also finds resonance in two decisions handed down by this Court. Learned counsel firstly drew our attention to the judgment in CIT vs. Jai Parabolic Springs Ltd 2008 SCC OnLine Del 1486. As would be evident from the question which arose for determination in that case, the Court was principally called upon to consider whether the Tribunal was justified in according relief to the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed earlier for good reasons. The Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reason. The same observations would apply to appeals before the Tribunal also. 14. It then went on to significantly observe in Para 17 that the decision of the Supreme Court in Goetze cannot be read as either impinging upon the power of a Tribunal to frame an appropriate direction or for that matter such a direction being rendered incapable of execution merely because a revised return had not been submitted. Para 17 is reproduced hereinbelow:- 17. In Goetze (India) Ltd. v. CIT [2006] 284 ITR 323 (SC) wherein deduction claimed by way of a letter before the Assessing Officer, was disallowed on the ground that there was no provision under the Act to make amendment in the return without filing a revised return. Appeal to the Supreme Court, as the decision was upheld by the Tribunal and the High Court, was dismissed making clear that the decision was limited to the power of the assessing authority to entertain claim for deduction otherwise than by a revised return, and did not impinge on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... embargo in the Commissioner's power as read by the Commissioner in the present case. It is open to the Commissioner to entertain even a new ground not urged before the lower authorities while exercising revisional powers. Therefore, though the petitioner had not raised the grounds regarding under-totalling of purchases before the ITO, it was within the power of the Commissioner of admit such a ground in revision. 18. Likewise, the Kerala High Court in Parekh Brothers v. CIT (supra) observed: We hold, that even though a mistake was committed by the Assessee and it was detected by him after the order of assessment, and the order of assessment is not erroneous, none the less it is open to the Assessee to file a revision before the Commissioner under Section 264 of the Act and claim appropriate relief. But it should not be forgotten that the power to be exercised under Section 264 is a revisionary one. The limitations implicit in the exercise of such power are well known. The jurisdiction is discretionary; Whether in a particular case, on the basis of facts disclosed, the Commissioner will exercise his jurisdiction and interfere in the matter, is a matter of discretion. It is certa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following terms:- 10. The learned Additional Solicitor General appearing for the Department had faintly argued that since the appellant in its return had taken a conscious explicit plea with regard to the part of the claim being ascribable to capital expenditure and partly to revenue expenditure, it was not open for the appellant to plead for the first time before the Income-tax Appellate Tribunal that the entire claim must be treated as revenue expenditure. Further, it was not open to the Income-tax Appellate Tribunal to entertain such fresh claim for the first time. This submission needs to be stated to be rejected. In the first place, the Income-tax Appellate Tribunal was conscious about the fact that this claim was set up by the appellant for the first time before it, and was clearly inconsistent and contrary to the stand taken in the return filed by the appellant for the concerned assessment year including the notings made by the officials of the appellant. Yet, the Income-tax Appellate Tribunal entertained the claim as permissible, even though for the first time before the Income-tax Appellate Tribunal, in appeal under section 254 of the 1961 Act, by relying on the dictu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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