Wp/32092/2013 Of M/S Ugra Precision Engineering Private Limited v. The Commissioner Of Income Tax

IN THR HIGH COURT OF KARNATAKA AT BBNGALURU DATED THIS THE 8 DAY OF APRIL, 2015. BBREFOR THE HON’BLE MR.JUSTICE ARAVIND KUMAR WRIT PETITION NO.32092 OF 2013 (TIT) BETWEEN: M/S UGRA PRECISION ENGINEERING.PRIVATE LIMITED,REP. BY ITS DIRECTORSRI S ABHIRAM, AGED ABOUT 34 YEARS,NO.C-142,.YADAVGIRI INDUSTRIAL ESTATE, MYSURU — 570 O20. _. PRHTITIONER (BY SRI ANNAMALAI & SRI LAVA M, ADVOCATEFOR SRI SHANKAR A, ADVOCATE) AND: 1,THE COMMISSIONBR OFINCOME TAX, MYSURU,95/1, SHILPASHREE,VIDYARANYA COMPLEX,VISHWESHWARANAGAR,MYSURU —- 570 OO8. 2 THE INCOME TAX OFFICER,WARD 1(1), 99/1, SHILPASHREE, VIDYARANYA COMPLEX, VISHWESHWARANAGAR,MYSURU — 570 OOS. |RBSPONDENTS (BY SRI E I SANMATHI, ADVOCATE FOR RI R2)THIS WRIT PETITION IS FILED UNDER ARTICLES 2206AND 227 OF THE CONSTITUTION OF INDIA, PRYAING TO SET ASIDE THE ORDER PASSED BY THE RI DT. 14.11.2012VIDE ANNEXURE A AND ETC., THIS WRIT PETITION COMING ON FOR PRELIMINARY.HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE|FOLLOWING: ORDER Heard Sri Annamalai, learned counsel appearingfor the petitioner and Sri E I Sanmathi, learned counselappearing for the respondents. |Petitioner is questioning the order passed bythe first respondent under Section 264 of the Income Tax.Act, 1961 dated 14.11.2012 (Annexure A) where under)the revised return filed by petitioner was processed by|the Assessing Officer under Section 143(1) of the Act on)22.02.2012 accepting the total income returned by the.assessee raising a tax demand thereunder which came to.be called in question in the revisional jurisdiction having.been rejected on the ground that intimation under.section 143(1) cannot be subject matter of revision.under Section 264 of the Act. 3 3.|I have heard the arguments of the learned)advocates appearing for the parties. 4It is the contention of Mr. Annamalai, learnedcounsel appearing for the petitioner that though anintimation issued under Section 143(1) is not an orderand the same not being amenable to _ revisionajurisdiction by the Commissioner of Income Tax, it doesnot prohibits the Assessing Officer to compute the total|income or loss of an assessee in respect of the income|filed after making such adjustments as provided undersub clause (i) and (ii) to clause (a) of Sub-Section (1) ofsection 143, since the explanation given under Section143(1), particularly explanation (a)(1) would clearly)indicate that an incorrect claim apparent from theinformation furnished in the return would mean an item)which is inconsistent with another entry of the same or.some other item and such return of income filed by|assessee enables the Assessing Otificer to process thereturn of income and as such the Assessing Officer be directed to pass an order on the revised return of income filed by the petitioner. 5.|Per contra, Sri E I Sanmathi, learned counselappearing for the respondent would support theimpugned order and contend that an intimation issued|under Section 143(1) not being an order would not beamenable to proceedings under Section 264 namely,would not come within the revisional jurisdiction since it,is not an order. Hence the Assessing Officer not being|entitled to correct the return of the income filed by the|assessee it would not be in his domain to make.adjustments as claimed by the assessee, particularlywhen the assessee in the instant case having filed a|revised returns indicating the profit before tax as per‘Profit and Loss Account’ as ‘0’, the Assessing Officer was|not empowered to revise the return of income as reflectedin the return of income filed by the assessee. Hence, he|prays for rejection of the writ petition. He would alsohasten to add that an intimation issued under Section|143(1) 1s an appealable order under Section 246 of the) 5 Act|andas|suchpresentWritpetition1S not.maintainable. 5 Act|andas|suchpresentWritpetition1S not.maintainable. 6.|Havingheard|thelearned|advocates|appearing for the parties and on perusal of the impugnedorder it would indicate that assessee in the instant case.initially filed a return of income on 19.10.2010 as per|Annexure B. In the said return of income filed, assessee_has indicated the profit before tax as per ‘Profit and LossAccount’ at ‘RS.;1,39,49,725/-°. Subsequently, revisedreturn of income came to be filed under Section 139(9)on 13.09.2011 as per Annexure D where under the TDS.has been indicated at Rs.4,08,96/7/- and in the column‘Profit before tax’ as per ‘Profit and Loss Account’ it has|been indicated as ‘O’. Whereas in the same return for|computation of minimum alternate tax payable under)section 115JB of the Act at column No.3 for profit before tax as shown in Profit and Loss Account (enter item 43 ofpart A — Profit and Loss) a sum of ‘Rs.- 1,39,77,010/-*has been indicated. Based on the said revised return otincome filed it came to be accepted by the Assessing| Officer and an intimation under Section 143(1) came tobe issued on 22.02.2012 (Annexure E) raising a taxdemand for Rs.19,24,000/-. Petitioner being aggrieved|by the same filed a revision before the first respondentinvoking Section 24 of the Income Tax Act. Assessee in|the original return of income filed for the assessment|year in question namely 2010-11 had declared the total|loss at Rs.73,53,586/- which return was processed byAssessing Officer under Section 143(1) on 11.02.2011.and same came to be accepted. On receipt of the said|intimation assessee is said to have realized that TDS of.Rs.4,08,967/- was not claimed in the original return ofincome field and as such a revised return was filed.through e-filing on 13.09.2011 (Annexure D) whereinTDS of Rs.4,08,96//- was claimed. Even in the said|revised return the assessee declared the income at.Rs.60,00,/7/70/-. The said revised return of income filedby the assessee was also processed under Section 143(1)of the Act and by intimation dated 22.02.2012 accepting|the total income returned by the assessee in his revised return of income came to be accepted by raising thedemand for Rs.19,24,000/- aiter giving credit to the TDSclaim of Rs.4,08,96//-. It was contended by assessee|before the revisional authority that intimation issuedunder Section 143(1) on 22.02.2012 (Annexure F) isbased on an incorrect income was incorrect and returned.by the assessee himself and the loss as mentioned in theoriginal return of income as such assessee prayed forrevision of the said intimation by the Commissioner ofIncome Tax in exercise of his power under Section 264 otthe Act. There cannot be any dispute to the propositionthat till 31.03.1999 the Assessing Officer had power toamend the income returned by the assessee undersection 143(1)(a) as it stood then by making prima facieadjustments in view of Section 143(1)(a) (1). SinceexplanationTO Section143 (1)indicating|thatatlintimation sent to the assessee under Clauses (1) or (1)(b)of Sub-Section (1) of Section 143 shall be deemed to bean order for the purpose of Sections 246 and 264, such|power which was available to the Assessing Officer to effect prima facie adjustments under Section 143(1)came to be removed and consequently the _ saiexplanation to Section 143 has also be removed w.e.t.|1.6.1999 by the Finance Act, 1999. In this background|the revisional authority has rightly held that anintimation issued under Section 143(1) is not an orderamenable to revisional jurisdiction. In fact, this view isalso forfeited by a Division Bench judgment of this courtin the case ot|The Commissioner of Income Tax andanother vs M/s Avasarala Automation Limited inW.A. Nos.1411-1413/2014- disposed of on 9.4.2005where under it has been concluded as follows: effect prima facie adjustments under Section 143(1)came to be removed and consequently the _ saiexplanation to Section 143 has also be removed w.e.t.|1.6.1999 by the Finance Act, 1999. In this background|the revisional authority has rightly held that anintimation issued under Section 143(1) is not an orderamenable to revisional jurisdiction. In fact, this view isalso forfeited by a Division Bench judgment of this courtin the case ot|The Commissioner of Income Tax andanother vs M/s Avasarala Automation Limited inW.A. Nos.1411-1413/2014- disposed of on 9.4.2005where under it has been concluded as follows: “A reading of the aforesaid provisions|would make it clear that by virtue of the.explanation to Section 143 of the Act, theintimation received by the assessee is deemedto be an order tor the purposes of Section 264of the Act. This being so, it was revisableunder Section 264 otf the Act and theCommissioner could exercise his powersthereunder. By Finance Act, 1999, theexplanation to Section 143 was deleted witheffect from 1.6.1999. The effect of this OQ deletion is that the intimation under Section143 ceases to be an order so as to be revisedunder Section 264 of the Act. This being so,after 1.6.1999, any intimation received by theassessee could not be revised. In this view ofthe matter, the Commissioner of Income Taxwas right in rejecting the revision petitions|filedbytheaSsSeSsSschallengingtheintimations after 1.6.1999 received in regardCO therelevantassessment.YCary4andtherefore, the order of the learned singleJudge cannot be sustained.” TT.In that view of the mater, contention of Mr.Annamalai, learned counsel appearing for the petitionercannot be accepted and even explanation provided undersection 143(1) would not come to the rescue of thepetitioner to contend that Assessing Officer has power tomake adjustments in the return of income filed by theassessee. For these reasons, I do not find any merits in |this writ petition. Accordingly, the same _ standsdismissed. — This order would not come in the way of Assessing| Officer to conduct or examine the application said to| have been filed by the petitioner under Section 1594 of the Act in accordance with law. | Ordered accordingly. Sd/-. JUDGE yKI