1995 (10) TMI 68 - AT - Income Tax

Summary

Issues Involved:
1. Non-claim of deduction under section 80HH during the original assessment.
2. Rejection of the rectification application under section 154 for claiming deduction under section 80HH.
3. Consideration of factual material and clear data on record for allowing deduction under section 80HH.

Issue-wise Detailed Analysis:

1. Non-claim of Deduction under Section 80HH During the Original Assessment:
The assessee did not claim the deduction under section 80HH in the return for the assessment year 1983-84 because it was a loss case. The return showed a loss of Rs. 5,86,942, which was allowed to be carried over to the next year. The Assessing Officer completed the assessment under section 143(3) and allowed a deduction under section 80J, but due to the loss, it was carried over to the next year. No appeal was made against this assessment order as the loss declared by the assessee was accepted.

2. Rejection of the Rectification Application under Section 154 for Claiming Deduction under Section 80HH:
The assessee filed an appeal for the assessment year 1982-83, which resulted in some relief. Consequently, the Assessing Officer passed a rectificatory order under section 154 for the assessment year 1983-84, computing the total income at Rs. 6,21,610. The assessee then requested relief under section 80HH, claiming Rs. 8,05,830. The Assessing Officer rejected this application, stating that it was not a mistake apparent from the record since the assessee had never claimed the deduction under section 80HH initially. The CIT(A) upheld this decision, stating that the Assessing Officer was not obliged to give the deduction under section 80HH in the rectification order.

3. Consideration of Factual Material and Clear Data on Record for Allowing Deduction under Section 80HH:
The assessee argued that all necessary facts for allowance of relief under section 80HH were on file, and it was the duty of the Assessing Officer to allow the relief even if it was not claimed. The assessee highlighted that the conditions for deductions under sections 80HH and 80J were similar, and since the deduction under section 80J was allowed, the conditions under section 80HH were also met. The assessee pointed out that it had received a central subsidy for being located in a backward area, which was reflected in the balance-sheet and considered by the Assessing Officer while calculating depreciation.

The Tribunal considered the rival submissions and noted that the claim for relief under section 80HH surfaced only after the rectificatory order converted the negative income into a positive figure. The Tribunal referred to the Supreme Court decision in Anchor Pressings (P.) Ltd., which established that if precise factual material and clear data were available on record, the relief should be granted irrespective of whether a formal claim was made. The Tribunal found that the necessary data and factual material were indeed available on the record, indicating that the assessee's industrial undertaking was located in a backward area and met the conditions for deduction under section 80HH.

Conclusion:
The Tribunal concluded that the Assessing Officer should have considered the assessee's claim under section 80HH based on the available factual material and clear data. The revenue authorities were not justified in rejecting the assessee's application for rectification. Consequently, the Tribunal directed the Assessing Officer to consider the assessee's claim under section 80HH as per the provisions of law.

Final Judgment:
The appeals were allowed, and the Assessing Officer was directed to consider the assessee's claim under section 80HH.