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2015 (4) TMI 88 - AT - Income TaxDeduction u/s.80GGA/35(1) denied - filing of an application u/s 154 for rectification of mistake to make alternate claim u/s 35(1)(i)/(ii) as an alternate claim - Payment to Research Foundation - Revenue is aggrieved and preferred present appeal contending that CIT(A) erred in considering the assessee's claim u/s.35(1)(i)(ii) and (iia) directing to examine the issue with regard to the provisions of section 35 and if, all the conditions specified are satisfied, to allow deduction u/s.35(1)(i)(ii)&(iia)- Held that - CIT(A) exceeded the jurisdiction/powers granted in directing the Assessing Officer to examine the issue u/s.35(1). Even though provisions of Section 80GGA and 35(1)(i),(ii) are synonymous, the claim is not allowable automatically u/s.35(1). It is to be examined whether those institutions/research bodies to whom the payments were made are eligible to claim such deduction and whether necessary approvals are there to grant benefit. As seen from the facts of the payments, assessee has made a donation to M/s. Naandi Foundation which does not indicate that it is one of the research institutions primafacie. Not only that Madras Diabetes Research Foundation to whom another amount was paid also required to be examined whether the same was approved under the Act so as to allow the benefit. Without examination, the claim cannot be allowed. As seen from the order of the Assessing Officer, Assessing Officer has not given any finding that assessee's claim u/s.80GGA is otherwise allowable but for the provisions of 80GGA(3) which was invoked. Assessee having accepted the order u/s.143(3) cannot seek relief u/s.35(1) in the proceeding u/s 154. Had he preferred appeal of the order u/s.143(3), the CIT(A) could have examined/directed the Assessing Officer to examine whether alternate claim can be entertained. We are of the opinion that the same cannot be done in an appeal u/s.154, which has limited scope and jurisdiction. As held in the case of T.S. Balaram, ITO, Company Circle-IV Bombay Vs. Volkart Brothers and Others 1971 (8) TMI 3 - SUPREME Court a mistake apparent on record must be an erroneous and evident mistake and not same thing which can be established by a long drawn process of reasoning on which there may be conceivably two opinions. A decision on a debatable point of law is not a mistake apparent from record. view of this, we are of the opinion that the subsequent direction of the CIT in examining the Assessing Officer to consider the provisions of Section 35(1)(i),(ii) is beyond the jurisdiction. Therefore, to that extent, the order is set aside.We uphold the order to the extent that the issue cannot be rectified under the provisions of Section 154 as it is not a mistake apparent from record. - Decided in favour of revenue. Denial of deduction u/s 80GGA challenged - Held that - In view of the specific bar created under sub-section (3) of section 80GGA, the assessee is not entitled to avail deduction u/s 80GGA of the Act. The matter was pending before the Hon'ble High Court. Since the issue is already considered against assessee in regular proceedings u/s.143(3) r.w.s.147, there is no need to consider the issue again in this year as assessee has accepted the order u/s.143(3) and no proceedings are pending on that. Further, the fact that the matter was contested before the Hon'ble High Court itself shows that it is a debatable one, therefore, the same cannot be considered in proceedings u/s.154. In that view also assessee's grounds cannot be entertained. - Decided against assessee.
Issues Involved:
1. Claim of deduction under Section 80GGA/35(1) of the Income Tax Act. 2. Eligibility of the assessee for deduction under Section 80GGA despite having business income. 3. Rectification application under Section 154 for alternate claim under Section 35(1)(i)/(ii). 4. Jurisdiction of CIT(A) in directing the Assessing Officer to examine the claim under Section 35(1). Issue-wise Detailed Analysis: 1. Claim of Deduction under Section 80GGA/35(1) of the Income Tax Act: The assessee claimed a deduction of Rs. 1,50,00,000 under Section 80GGA, which was disallowed by the Assessing Officer on the grounds that the assessee had business income, making him ineligible for the deduction as per Sub-Section (3) of Section 80GGA. The Assessing Officer's decision was accepted by the assessee, and no appeal was initially preferred. Instead, the assessee filed an application under Section 154 seeking rectification to allow the deduction under Section 35(1)(i)/(ii) as an alternate claim, which was rejected by the Assessing Officer. 2. Eligibility of the Assessee for Deduction under Section 80GGA Despite Having Business Income: The Commissioner of Income Tax (Appeals) upheld the Assessing Officer's decision, stating that the assessee's gross total income included income chargeable under the head "profits and gains of business or profession," making him ineligible for the deduction under Section 80GGA. The CIT(A) also noted that the alternate claim under Section 35(1)(i)/(ii) was not apparent from the record and required the Assessing Officer's satisfaction of the conditions under the said sections. 3. Rectification Application under Section 154 for Alternate Claim under Section 35(1)(i)/(ii): The CIT(A) justified the Assessing Officer's rejection of the rectification application under Section 154, stating that the alternate claim did not constitute a mistake apparent from the record. However, the CIT(A) directed the Assessing Officer to examine the issue under Section 35(1) on merits, provided the conditions specified were satisfied. 4. Jurisdiction of CIT(A) in Directing the Assessing Officer to Examine the Claim under Section 35(1): The Tribunal found that the CIT(A) exceeded its jurisdiction by directing the Assessing Officer to examine the claim under Section 35(1) after dismissing the rectification application under Section 154. The Tribunal held that the CIT(A) should not have traversed beyond the scope of the rectification proceedings, as the issue of claim under Section 80GGA was concluded with no appeal preferred by the assessee on the order under Section 143(3). The Tribunal cited the decision of the Punjab & Haryana High Court in the case of R.B.L. Banarsi Dass and Co. P. Ltd. Vs. CIT, where it was held that the CIT(A) cannot substitute its opinion on an issue not arising from the order under appeal. Conclusion: The Tribunal upheld the rejection of the rectification application under Section 154, as it was not a mistake apparent from the record. The Tribunal set aside the CIT(A)'s direction to the Assessing Officer to examine the claim under Section 35(1), stating it was beyond jurisdiction. The Tribunal dismissed the assessee's appeal, reaffirming that the issue of deduction under Section 80GGA was already decided against the assessee in regular proceedings under Section 143(3) r.w.s. 147, and the matter was pending before the High Court, making it a debatable issue not suitable for rectification under Section 154. The Revenue's appeal was partly allowed, and the assessee's appeal was dismissed.
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