CIT Appeals wrong in rejecting appeal for non payment of tax when assessee paid tax on admitted return of income and revised return not accepted – ITAT

CIT Appeals wrong in rejecting appeal for non payment of tax when assessee paid tax on admitted return of income and revised return not accepted – ITAT

ABCAUS Case Law Citation:
985 2016 (08) ITAT
AY: 2007-08
Date/Month of Judgment: August 2016

Brief Facts of the Case:
The appellant assessee had filed a return of income declaring capital gains. Later on, a search was conducted and in response to notice, the assessee filed a letter dated 8.9.2010 to treat its return filed u/s 139 as a return u/s 153C of the Income-tax Act, 1961. Accordingly, the said return was accepted as a return u/s 153C of the Act. The assessee filed a revised return u/s. 153C on 28.10.2010 disclosing increased capital gains.

Since the original return had already been acted upon as a return u/s 153C, the revised  return filed on 28.10.2010 was not treated to be a valid return by the Assessing Officer (AO). However, the information available in the return was considered for the purpose of assessment of the case by the AO. Accordingly the assessment was framed.

Against the assessment so framed, the assessee filed appeal before the CIT(Appeals) who had raised the objection that the assessee had not paid the tax on the admitted return of income; whereas according to the assessee, it had already paid the tax on the admitted return of income and since revised return filed by the assessee was not accepted by the AO, there was no point in payment of tax on the income declared in the revised return.

However, the CIT(A) was not convinced and dismissed the appeal of the assessee. 

Observations made by ITAT:
The Tribunal observed that though while filing an appeal before the CIT(Appeals), the assessee is required to pay the tax on the admitted return of income, but in the case, on the admitted return of income, the assessee had already paid the taxes. The assessee had not paid the taxes on the revised return which was not treated to be valid by the AO and was non est in the eyes of law. Since the revised return was treated to be non est in law, there was no question of making payment of tax on the income declared therein.