2022 (2) TMI 1032 - AT - Income Tax

Rectification of mistake u/s 154 - Disallowing Derivatives F O loss and Speculation profit - assessee did not claim loss in the original return filed - whether the omission to claim in the original returns for the assessment year under consideration will enable the assessee to file application under section 154 of the Income-tax Act to rectify the said omission? - HELD THAT - It is an admitted fact that the assessee did not claim loss in the original return filed by it. It is also an admitted fact that the assessment was completed based on the computation of income submitted by the assessee along with its return of income. The assessee has also not filed revised return of income under section 139(5) of the Income-tax Act to rectify the alleged omission to claim loss in his return of income. Under section 139(5) of the Income-tax Act, an assessee can file a revised return before the completion of assessment or within one year from the end of the respective assessment year whichever is earlier. In the case on hand, admittedly, assessment has been completed based on the original return of income filed by the assessee. Therefore, the omission to claim loss in the original return cannot be termed as a mistake apparent on record. The question raised in this appeal relates to whether the appellant-assessee could make a claim for deduction other than by filing a revised return. The appellant sought to claim a deduction by way of a letter before the Assessing Officer. The deduction was disallowed by the Assessing Officer on the ground that there was no provision under the Income-tax Act to make amendment in the return of income by filing an application at the assessment stage without revising the return. The concurrent finding of the authorities below does not suffer from any perversity or illegality and the substantial questions of law raised by the assessee in this appeal does not carry any merit. - Decided against the assessee.

Issues:
1. Non-allowance of Derivatives F & O loss and Speculation profit.
2. Alleged violation of principles of jurisprudence and natural justice.
3. Denial of lawful claim by the assessing officer.
4. Dismissal of appeal on technical grounds without proper appreciation of facts.
5. Rejection of rectification application under section 154.
6. Interpretation of provisions under section 139(5) for filing revised returns.
7. Applicability of circulars and judicial pronouncements.

Analysis:

Issue 1: Non-allowance of Derivatives F & O loss and Speculation profit
The assessee contested the non-allowance of Derivatives F & O loss and Speculation profit in the appeal against the Commissioner's order. The assessing officer had not considered the fresh claim made during the assessment proceedings, leading to a dispute regarding the treatment of these transactions.

Issue 2: Alleged violation of principles of jurisprudence and natural justice
The appellant argued that the assessing officer and CIT (A) erred in not following the principles of jurisprudence to grant justice, alleging a violation of natural justice. This raised concerns about the fairness and procedural aspects of the assessment.

Issue 3: Denial of lawful claim
The CIT (A) was accused of denying a lawful claim of the appellant, which added to the contention regarding the proper consideration of the appellant's submissions and claims during the assessment process.

Issue 4: Dismissal of appeal on technical grounds
The appellant challenged the dismissal of the appeal on technical grounds without a comprehensive understanding of the case's facts. This highlighted the importance of a thorough review of the facts and legal aspects before making a decision.

Issue 5: Rejection of rectification application under section 154
The assessing officer rejected the rectification application under section 154, citing reasons related to the filing of the original return and the absence of a revised computation during the assessment proceedings. This decision was contested by the appellant.

Issue 6: Interpretation of provisions under section 139(5)
The interpretation of provisions under section 139(5) regarding filing revised returns was crucial in determining the validity of the appellant's claim for deduction without submitting a revised return. The assessing officer's stance on this matter was a point of contention.

Issue 7: Applicability of circulars and judicial pronouncements
The circular referred to by the appellant and the judicial pronouncements cited during the proceedings were analyzed to assess their relevance to the case. This highlighted the importance of legal precedents and administrative guidelines in tax matters.

In conclusion, the judgment upheld the CIT (A)'s order, dismissing the appellant's appeal. The decision was based on the assessment of various legal aspects, including the interpretation of statutory provisions, application of principles of natural justice, and adherence to procedural requirements during the assessment process. The judgment emphasized the need for compliance with legal provisions and the importance of thorough documentation and filing procedures in tax matters.

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