2020 (4) TMI 586 - AT - Income Tax

Claim not made by the assessee in the income tax return - Booking cancellation charges disallowed - whether deduction for the expenses not made in the income tax return can be claimed before the appellate authorities? - HELD THAT - Necessary basic details about the claim of the assessee were available before the authorities below with supporting documents. The impugned expenditure was also claimed in the profit and loss account. Now the controversy arises the claim not made by the assessee in the income tax return out of ignorance/lack of knowledge/unawareness can deprive it from claiming the same and there was no duty on the revenue to enquire about the legitimate claim of the assessee if any. Assessee has not made altogether a new claim before the appellate proceedings which was not disclosed in the financial statements. As such we note that the basic details about the claim of the assessee were very much available before the authorities below right from the profit and loss account of the assessee which is the crucial document to determine the income of the assessee. We are inclined to admit the claim of the assessee. Accordingly we set aside the same to the file of the AO for fresh adjudication as per the provisions of law and in the light of the above stated discussion. Hence the ground of appeal of the assessee is allowed for the statistical purposes. Appeal filed by the assessee is allowed for the statistical purposes

Issues involved:
1. Disposal of ground relating to booking cancellation charges for A.Y. 2008-09.
2. Claim of allowance for booking cancellation charges.
3. Adjudication of expenses not claimed in the income tax return.
4. Duty of revenue authorities to guide taxpayers.
5. Admittance of claims before appellate authorities.
6. Setting aside the matter for fresh adjudication.
7. Disposal of ground relating to booking cancellation charges for A.Y. 2009-10.

Issue 1: Disposal of ground relating to booking cancellation charges for A.Y. 2008-09:
The appeal raised concerns about the non-disposal of the ground by the CIT (A) regarding the claim of allowance for booking cancellation charges. The assessee argued that the CIT (A) erred in not addressing this issue, which was not initially claimed in the income tax return. The Tribunal noted that the claim was submitted before the CIT (A) but not considered. The AR contended that the matter should be restored to the AO for fresh adjudication. The DR argued against the claim, stating that it was not raised as a legal ground and contradicted the assessee's own statements. However, the AR emphasized the technical problem leading to project abandonment, supporting the claim with construction plans.

Issue 2: Claim of allowance for booking cancellation charges:
The assessee sought to deduct booking cancellation charges against interest income, which was not claimed in the income tax return due to consultant advice. The AR presented evidence supporting the claim, including ledger details and payment information. The DR opposed the claim, highlighting the absence of income from real estate activities in the profit and loss account. The Tribunal acknowledged the claim submission before the CIT (A) and admitted the claim for fresh adjudication, citing the availability of basic details and the duty of revenue authorities to assist taxpayers.

Issue 3: Adjudication of expenses not claimed in the income tax return:
The Tribunal considered whether expenses not claimed in the income tax return could be raised before appellate authorities. Referring to relevant circulars and judicial precedents, the Tribunal emphasized the duty of income tax officers to guide taxpayers and not take advantage of their ignorance. The Tribunal admitted the claim, setting aside the matter for fresh adjudication based on the available details and the principle of assisting taxpayers in securing reliefs.

Issue 4: Duty of revenue authorities to guide taxpayers:
The Tribunal highlighted the CBDT circular and judicial precedent emphasizing the duty of income tax officers to assist taxpayers in claiming reliefs. The Tribunal noted that officers should guide taxpayers and extend benefits granted under the law, rather than taking advantage of taxpayer ignorance.

Issue 5: Admittance of claims before appellate authorities:
The Tribunal admitted the claim of the assessee for fresh adjudication, considering the availability of basic details and supporting documents before the authorities. The Tribunal emphasized that the claim was not entirely new and had been disclosed in the financial statements, supporting the decision to allow the claim.

Issue 6: Setting aside the matter for fresh adjudication:
The Tribunal set aside the claim for fresh adjudication by the AO, based on the available details, circular guidance, and judicial precedents. The decision aimed to ensure fairness and assistance to the taxpayer in securing legitimate reliefs under the law.

Issue 7: Disposal of ground relating to booking cancellation charges for A.Y. 2009-10:
The Tribunal noted that the issue raised for A.Y. 2009-10 was identical to that of A.Y. 2008-09, which had already been decided in favor of the assessee. Therefore, the Tribunal allowed the ground raised by the assessee for statistical purposes, maintaining parity with the previous findings.

In conclusion, both appeals filed by the assessee were allowed for statistical purposes, emphasizing the duty of revenue authorities to guide taxpayers and the importance of admitting claims based on available details and supporting documents.

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