2022 (4) TMI 1280 - AT - Income Tax

Rectification u/s 154 - ITAT's power to admit grounds otherwise than by revised return - disallowing alternative claim made u/s. 80G during proceedings u/s 154 in respect of donation for which claim was made inadvertently u/s. 80GA in the return of Income and was disallowed in the order passed u/s. 143(1) - HELD THAT - As assessing officer has rejected the assessee's claim referring to Hon ble Supreme Court decision in the case of Goetze India Ltd. 2006 (3) TMI 75 - SUPREME COURT and in the said decision Hon ble Supreme Court itself has held that their aforesaid order will not impinge on the ITATs, power to admit grounds otherwise than by revised return. Furthermore we note that Ld. CIT(A) has referred that the donee s approval had expired by the time the donation was made by the assessee. If this fact is correct assessee s claim cannot be sustained. However since this is a matter of verification of records we consider it appropriate to remit the issue to the file of AO. The assessing officer shall examine the documentary evidence of the validity of the donee's approval. If the same has not expired the assessee's claim shall need to be considered as per law. If the same has expired the assessee shall not have any legal claim for deduction. Accordingly the issue stands remitted to the file of Assessing Officer - Appeal by the assessee stands allowed

Summary

Issues:
1. Disallowance of alternative claim made under section 80G during proceedings under section 154 for a donation amount.
2. Validity of the claim of deduction under section 80G for the donation amount of ?1,11,111/-.
3. Expiry of approval under section 80G(vi) of the Income Tax Act before the donation date.

Analysis:
1. The appellant's appeal arose from the order of the Ld. CIT(A) regarding the disallowance of an alternative claim made under section 80G during section 154 proceedings for a donation amount of ?1,11,111/-. The Assessing Officer observed that the appellant had constantly changed their claim of deduction without filing a valid revised return. The Hon'ble Supreme Court's decision in Goetze India Ltd. 284 ITR 323 was cited, emphasizing the necessity of a revised return for revised claims. The appellant's new claim during rectification proceedings was rejected as unacceptable due to the absence of a valid revised return.

2. The Ld. CIT(A) upheld the Assessing Officer's decision, noting the appellant's inconsistent claims regarding the donation amount. The original return claimed the donation under section 80GGA, which was later withdrawn in a subsequent return. The rectification application sought to correct the claim from section 80GGA to section 80G. However, the Ld. CIT(A) found the appellant's intentions regarding the donation claim to be ingenuine. Additionally, the approval under section 80G(vi) from the Commissioner of Income Tax had expired before the donation date, leading to the dismissal of the claim for deduction of the donation amount.

3. The ITAT, upon hearing both parties, considered the Assessing Officer's rejection of the claim in light of the Supreme Court's decision in Goetze India Ltd. 284 ITR 323. The ITAT noted the expired approval under section 80G(vi) before the donation date, which could impact the validity of the claim. To verify this crucial aspect, the issue was remitted to the Assessing Officer for examination of the documentary evidence regarding the validity of the donee's approval. Depending on the verification outcome, the claim's legitimacy would be determined accordingly. Consequently, the ITAT allowed the appeal by remitting the issue to the Assessing Officer for further evaluation.

In conclusion, the judgment addressed the disallowance of an alternative claim under section 80G, the genuineness of the claim for deduction, and the impact of an expired approval under section 80G(vi) on the donation deduction claim. The decision provided clarity on the necessity of a revised return for revised claims and highlighted the importance of verifying the validity of approvals for deductions under the Income Tax Act.