2019 (1) TMI 201 - AT - Income Tax

MAT - Computation of Book profit under section 115JB - claims made during the course of assessment proceedings Other than by filing revised return of income to be allowed - Held that - Whether the claim made during assessment proceedings can be considered by AO when no such claim was made in return of income, is covered by the decision of the co-ordinate bench of Delhi in the case of The Kangra Cooperative Bank Ltd. vs. JCIT in 2015 (11) TMI 270 - ITAT DELHI in favour of assessee - we remit this issue back to the file of the ld.CIT(A) to adjudicate the claim in accordance with law after affording due opportunity of being heard to the assessee.

Summary

Issues:
1. Computation of Book profit under section 115JB

Detailed Analysis:
The case involves an appeal filed by the assessee against the order of the Commissioner of Income-tax (Appeals) for the assessment year 2015-16. The assessee, a company engaged in trading electricity power, filed a return of income declaring income under normal provisions after set off of brought forward business loss and returning book profits under section 115 JB of the Income-tax Act. During assessment proceedings, the assessee submitted a revised computation of business profits under section 115 JB, which was not considered by the Assessing Officer. The appellate authority, relying on a Supreme Court decision, disallowed the claim made during assessment proceedings, leading to the current appeal.

The primary issue in this appeal is whether a claim made during assessment proceedings can be considered by the Assessing Officer when no such claim was made in the return of income. The assessee raised grounds challenging the decision of the Commissioner of Income-tax (Appeals) regarding the computation of book profit under section 115JB. The assessee argued that the powers of the Commissioner of Income-tax (Appeals) are not limited to those of the Assessing Officer and that there is no restriction on admitting additional grounds or claims made before him. The assessee contended that all details related to the claim for deduction were available during the assessment proceedings and should have been considered while computing the book profit under section 115JB. The assessee also argued that the Assessing Officer is duty-bound to allow all legitimate allowances/deductions, even if not claimed in the return of income.

In deciding the appeal, the Tribunal referred to a co-ordinate bench decision in favor of the assessee, emphasizing that new claims can be made at any stage of appellate proceedings. The Tribunal highlighted various High Court judgments supporting the view that the Appellate Commissioner or the Tribunal have jurisdiction to entertain new grounds, legal contentions, or claims for the first time, even if not raised before the assessing officer. The Tribunal concluded that the decision of the Supreme Court in a specific case was confined to the powers of the assessing officer and accepting a claim without a revised return. Therefore, the Tribunal remitted the issue back to the Commissioner of Income-tax (Appeals) for adjudication in accordance with the law after affording due opportunity to the assessee. The appeal filed by the assessee was treated as allowed for statistical purposes.

In summary, the Tribunal's decision focused on the interpretation of the powers of the Appellate Commissioner and the Tribunal in entertaining new claims or grounds during appellate proceedings, emphasizing that such jurisdiction exists even if the claims were not raised before the assessing officer. The Tribunal's ruling highlighted the importance of considering legitimate deductions and allowances, even if not initially claimed, to ensure a fair assessment of income.