ITR can’t be revised by AO beyond limitation on direction of ITAT which did not exercising its power u/s 254 to allow the claim
In a recent judgment, the Hon’ble Supreme Court has held as the ITAT had not exercised its power under Section 254 to consider the claim. Instead, the Tribunal directed the AO to consider the claim. The AO had no jurisdiction to consider the claim made by the assessee in the revised return filed after the time prescribed by Section 139(5) for filing a revised return had already expired.
ABCAUS Case Law Citation:
4273 (2024) (10) abcaus.in SC
In the instant case the appellant assessee had challenged the order of the High Court setting aside the order of the Tribunal directing Assessing Officer (AO) to consider the claim of the assesse on the ground that after the revised return was barred by time, there was no provision whereby AO may consider the claim made by the appellant.
The appellant-assessee filed a return of income (ITR). Subsequently it filed a revised return of income. As per intimation issued under Section 143(1)(a) of the Income Tax Act, 1961 (the Act) the appellant paid the necessary tax amount. However, the appellant filed second revised return.
Aggrieved by the action of the Assessing Officer (AO) in not taking cognizance of the said second revised return, the appellant preferred an appeal before the Commissioner of Income Tax (Appeals) who dismissed the appeal on the ground that in view of Section 139(5) of the Act, the second revised return was barred by limitation.
The appellant-assessee preferred an appeal before the Income Tax Appellate Tribunal which partly allowed the appeal by remanding the case back to the file of the assessing officer. The assessing officer was directed to consider the assessee’s claim regarding the deduction of deferred revenue expenditure.
The Department preferred an appeal before the High Court who by the impugned judgment set aside the order of the Tribunal on the ground that after the revised return was barred by time, there was no provision to consider the claim made by the appellant.
Before the Hon’ble Supreme Court, the appellant relied on its judgment and contended that the Tribunal did not direct consideration of the revised return but the Tribunal was of the view that the assessing officer can consider claim made by the appellant regarding deduction of deferred revenue expenditure in accordance with law. He submitted that the appellant was entitled to make a claim during the course of the assessment proceedings which otherwise was omitted to be specifically claimed in the return.
The Department also relied upon few judgments of the Hon’ble Supreme Court and submitted that after the revised return was barred by limitation, there was no question of considering the claim for deduction made by the appellant in the revised return. The assessing officer had no jurisdiction to consider the case of the appellant.
With respect to the judgment relied upon by the appellant, the Hon’ble Supreme Court observed that in the said case, the issue was not regarding the power of the assessing officer to consider the claim after the revised return was barred by time. The Court had upheld the action of the ITAT in exercise of appellate power under Section 254 of the Act. It was held that that such limitation would apply to the “assessing authority”, but not impinge upon the plenary powers of the ITAT bestowed under Section 254 of the Act. Moreover, this was a case where the department gave no objection for enabling the assessee to set up a fresh claim.
The Hon’ble Supreme Court further observed in the decision relied upon by the Department, it was held that the assessing officer cannot entertain any claim made by the assessee otherwise than by following the provisions of the Act.
The Hon’ble Supreme Court noted that in the instant case, there was no dispute that when a revised return was filed, it was barred by limitation in terms of section 139(5) of the Act. Also, the Tribunal had not exercised its power under Section 254 of the Act to consider the claim. Instead, the Tribunal directed the assessing officer to consider the appellant’s claim.
The Hon’ble Supreme Court stated that the assessing officer had no jurisdiction to consider the claim madeby the assessee in the revised return filed after the time prescribed by Section 139(5) for filing a revised return had already expired.
Accordingly, the appeal was dismissed.
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