The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that the assessment order based on a standalone basis despite the fact of amalgamation is not sustainable and upheld the order of the CIT(A).
The revenue challenged the orders of the Commissioner of Income Tax (Appeals)–7, Kanpur, dated 15.10.2018. The assessment order came to be passed on 31/12/2016 against the assessee, M/s. Rohit Bal Designs Pvt. Ltd by assessing the income at Rs. 2,80,78,480/-, against which the assessee has preferred an Appeal before the CIT(A). The CIT(A) vide order dated 15/10/2018, allowed the Appeal filed by the assessee.
It was contended by the department that the assessee in response to the notice u/s 139(9) of the Act, instead of rectifying the defect in its return, completely revised its return, which is not permissible as per Section 139(9) of the Act.
Per Contra, the assessee argued that the High Court of Delhi has approved the scheme of Amalgamation vide order dated 24.11.2014 which was informed to the AO during the assessment proceeding. It was alleged that the A.O. passed an assessment order based on the standalone financials of M/s. Rohit Bal Designs Pvt. Ltd., which did not exist in the eyes of law due to the amalgamation.
The intimated defect was that the tax payable had not been deposited by the assessee. In response, the assessee has filed another return completely replacing the documents, based on which the original return was filed. The A.O further observed that the provision of Section 139(9) of the Act only allows the assessee to correct the defects and does not permit to file of another return and assessed the income of the assessee at Rs. 2,80,78,480/-.
It was observed that A.O failed to consider the effect of amalgamation more so given the specific mandate of the High Court.
In light of the precedent, Dr B R R Kumar, accountant member and Shri Yogesh Kumar U S, judicial member observed that the assessed income as per the return filed by the appellant u/s 139(9) of the Act based on the consolidated Balance sheet should have been accepted by the A.O.
The Tribunal held that the CIT (A) has rightly allowed the Appeal filed by the Assessee by setting aside the Assessment Order and dismissed the Appeal filed by the Revenue. The assessee was represented by Shri Kamal Bansal, C. A and the department was represented by Shri Girish Kumar Kohli.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates.
