B.R. Baskaran ORDER
B.R. Baskaran, Member (A)
1. The assessee has filed this appeal challenging the order dated 26.3.2018 passed by Ld. CIT(A)-10, Bengaluru and it relates to assessment year 2012-13. The assessee is challenging the disallowance made by the A.O. u/s. 14A of the Income-tax Act, 1961 ['the Act' for short] read with Rule 8D(2)(ii) of the I.T. Rules out of interest expenditure. Besides the above, the assessee has also raised a legal ground contesting that the A.O. should have issued notice u/s. 143(2) of the Act in respect to the revised return filed by the assessee.
2. We heard the parties and perused the record. The assessee is deriving salary income and business income. He filed his return of income for the year under consideration on 13.9.2012. Thereafter, he revised his return of income by filing a revised return on 18.10.2012. The A.O. issued notice u/s. 143(2) of the Act on 6.8.2013 and completed the assessment by adopting the total income returned by the assessee in the original return of income filed by the assessee.
3. The only addition made by the AO in the assessment order is the disallowance of Rs. 10,92,765/- made u/s. 14A of the Act. The facts relating to the same are discussed in brief. The A.O. noticed that the assessee is a partner in a partnership firm named M/s. P.C. Properties. During the year under consideration, the assessee has derived share income from the partnership firm and claimed the same as exempt u/s. 10 of the Act. However, the assessee did not make any disallowance u/s. 14A of the Act. Hence, the A.O. made disallowance u/s. 14A of the Act read with Rule 8D of the I.T. Rules to the extent of Rs. 10,92,765/-. which consisted of interest disallowance of Rs. 10,71,782/- under Rule 8D(2)(ii) and expenditure disallowance of Rs. 20,983/- under Rule 8D(2)(iii) of the I.T. Rules. The above said disallowance was confirmed by Ld. CIT(A) and hence, the assessee has filed this appeal before us.
4. As noticed earlier, the assessee has raised a legal issue before the Tribunal. The Ld A.R. submitted that the assessee has filed revised return of income. However, the A.O. did not issue any notice u/s. 143(2) of the Act in response to the revised return filed by the assessee. He submitted that the notice u/s. 143(2) of the Act issued by the A.O. was related to the original return of income filed by the assessee. He submitted that the original return of income shall become non-est subsequent to the filing of revised return of income. Hence, issuing of notice u/s. 143(2) of the Act is mandatory and hence the AO should have issued the same against revised return of income.
5. We heard Ld. D.R. and perused the record. For adjudica........