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2004 (4) TMI 30 - HC - Income Tax1. Whether, the Tribunal was justified in holding that the assessment under section 143(3)/147 was not regular assessment and interest under section 139(8) was not chargeable on the delay in filing the return of income? - 2. Whether, the Tribunal was justified in holding that the assessee was entitled to relief under section 80G on the donation of Rs. 1,57,500 when the same was not claimed in the original return and was not allowed accordingly? - Question No. 1 is answered in the affirmative and in favour of the assessee. - Question No. 2 is answered in the negative and in favour of the Revenue and against the assessee.
Issues Involved:
1. Whether the assessment under section 143(3)/147 was regular and if interest under section 139(8) was chargeable for the delay in filing the return of income. 2. Whether the assessee was entitled to relief under section 80G for a donation that was not claimed in the original return. 3. Whether the Tribunal was justified in affirming the direction to carry forward the correct amount of deficiency under section 80J(3). Detailed Analysis: Issue 1: Regular Assessment and Interest Charge under Section 139(8) The relevant facts are that the assessee filed its original return on February 19, 1974, with a delay of four months. A subsequent return was filed on March 31, 1987, under the amnesty scheme. The assessment was completed, and a notice under section 148 was issued. The return filed on March 31, 1987, was treated as compliance with the notice under section 148. Interest under section 139(8) was initially found chargeable due to the delay in the original filing. However, both the Revenue and the assessee agreed that this question should be answered in favor of the assessee based on the Supreme Court judgment in K. Govindan and Sons v. CIT [2001] 247 ITR 192. Consequently, the court answered this question in the affirmative and in favor of the assessee. Issue 2: Relief under Section 80G for Donation The assessee did not claim any deduction under section 80G for a donation of Rs. 1,57,500 in the original return but claimed it in the return filed under the amnesty scheme. The Assessing Officer disallowed the deduction because it was not claimed in the original return. However, the Commissioner of Income-tax (Appeals) accepted the assessee's contention and directed the Assessing Officer to allow the deduction, which was upheld by the Income-tax Appellate Tribunal. The Revenue argued that the issue is governed by the Supreme Court judgment in CIT v. Sun Engineering Works P. Ltd. [1992] 198 ITR 297, which limits the scope of reassessment to income that has escaped tax and does not allow reconsideration of the entire assessment. The court agreed with this argument, stating that the judgment in Sun Engineering Works P. Ltd. had not been overruled and that reassessment proceedings do not permit the assessee to claim deductions not made in the original assessment. Therefore, question No. 2 was answered in the negative, in favor of the Revenue and against the assessee. Issue 3: Carry Forward of Deficiency under Section 80J(3) The court noted that this issue merely pertains to the correct working out of the carry forward of deficiency under section 80J and does not require an answer. Therefore, question No. 3 was not addressed. Conclusion: - Question 1: Answered in the affirmative and in favor of the assessee. - Question 2: Answered in the negative, in favor of the Revenue, and against the assessee. - Question 3: Not addressed as it was deemed unnecessary.
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