2016 (11) TMI 122 - HC - Income Tax

Allowance of issue raised before the Appellate Authority for the first time - Held that - Apex Court in the case of National Thermal Power Co. Ltd. v. CIT 1996 (12) TMI 7 - SUPREME Court clarified that the Appellate Authority is entitled to entertain a claim for the first time on a point of law provided the facts, on the basis of which the claim is made are available on record. This was in the context of dealing with the powers of the Appellate authority. The decision of the Supreme Court in Goetze (India) ( 2006 (3) TMI 75 - SUPREME Court ) only circumscribes the powers of an Assessing Officer to consider/grant a claim which have been made in the return of income or in the revised return of income. However, the same does not restrain the Appellate Authority from considering a new claim where facts are already on record. In the present case, it is not disputed that the facts necessary for making the fresh claim before the Appellate Authority, are already available on record. See Commissioner of Income Tax. Central-I Versus M/s. Pruthvi Brokers & Shareholders Pvt. Ltd. 2012 (7) TMI 158 - BOMBAY HIGH COURT

Summary

Issues:
Challenge to order of Income Tax Appellate Tribunal regarding fresh claims on capital loss and exemption under Section 54F of Income Tax Act, 1961.

Analysis:
The appeal under Section 260A of the Income Tax Act, 1961 challenges the order passed by the Income Tax Appellate Tribunal related to Assessment year 2006-07. The main question of law urged by the Revenue is whether the Tribunal was correct in admitting fresh claims on account of capital loss and exemption under Section 54F of the Act, even though these claims were not made in the return of income filed by the assessee.

The Respondent Assessee failed to claim long term capital gains (loss) and exemption under Section 54F in the return of income for the relevant assessment year. The Assessing Officer did not allow the Assessee to raise these issues during the assessment proceedings as they were not claimed in the original return or through a revised return. The Assessee appealed to the Commissioner of Income Tax (Appeals) who allowed the claims and granted relief. The Revenue then appealed to the Tribunal, which held that the Assessee could raise these claims before the Appellate Authorities. However, the Tribunal set aside the order of the CIT(A) and referred the matter back to the Assessing Officer for verification of the claims.

The Revenue contended that issues requiring verification of facts cannot be raised for the first time before the Appellate Authority and must be raised before the Assessing Officer. The Court referred to a previous case where it was held that the Appellate Authority can entertain a new claim on a point of law if the facts supporting the claim are already on record. The decision of the Supreme Court in Goetze (India) Ltd. vs. Commissioner of Income Tax was distinguished, stating that it limits the powers of the Assessing Officer but not the Appellate Authority. Since the facts supporting the fresh claim were already on record, the Appellate Authority was entitled to consider the new claim.

In conclusion, the Court dismissed the appeal, stating that no substantial question of law arises as the issue was settled by a previous decision. Therefore, the appeal was dismissed with no order as to costs.