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2014 (4) TMI 824 - HC - Income TaxValidity of remission made by Tribunal - Admission of the suo-moto disallowance u/s 14A of the Act Held that - Revenue contended that the assessee had filed a return in which the disallowance was offered suo motu, the assessee could not have resiled from such position without filing a revised return - When all materials necessary to examine the nature of disallowance to be made u/s 14A of the Act are already on record and when once AO as well as CIT (A) have already considered the issue and given detailed findings, it would be appropriate for the Tribunal to give its final conclusive opinion on the entire issue thus, the issue is placed before the Tribunal for consideration Decided partly in favour of Revenue.
Issues involved:
1. Disallowance under section 14A of the Income-tax Act, 1961. 2. Admissibility of assessee's contention for deleting suo moto disallowance. 3. Requirement of filing a revised return for making new claims. Analysis: Issue 1: Disallowance under section 14A of the Income-tax Act, 1961 The appeal was filed against the Income Tax Appellate Tribunal's order regarding disallowance under section 14A of the Income-tax Act, 1961. The Assessing Officer had made an addition of Rs.30.45 crore as additional disallowance under section 14A for the assessment year 2002-03. The CIT (Appeals) upheld the applicability of section 14A, albeit with restricted additions. The Tribunal, considering a similar case for the subsequent assessment year, directed the Assessing Officer to re-examine the issue of disallowance under section 14A. The Tribunal emphasized the need for the Assessing Officer to consider the submissions made by the assessee and provide a reasonable opportunity for a hearing before deciding on the matter. Issue 2: Admissibility of assessee's contention for deleting suo moto disallowance The main contention revolved around the Tribunal allowing the assessee to argue against the suo moto disallowance of Rs.6.32 crore made in the return filed by the assessee. The Revenue argued that the assessee could not retract from the position taken in the return without filing a revised return. However, the Tribunal disagreed and remitted the issue back to the Assessing Officer for fresh consideration. The High Court opined that since all necessary materials were on record and both the Assessing Officer and CIT (Appeals) had already given detailed findings, the Tribunal should provide its conclusive opinion on the matter. Issue 3: Requirement of filing a revised return for making new claims The Revenue relied on a Supreme Court decision to support the argument that the assessee needed to file a revised return to make new claims not included in the original return. On the other hand, the assessee cited a judgment of the High Court to counter this argument. The High Court refrained from making conclusive observations on the conflicting contentions and left it to the Tribunal to decide after hearing both parties. In conclusion, the High Court partly allowed the appeal, setting aside the Tribunal's judgment and referring the entire issue back to the Tribunal for a decision on merits. The Court emphasized the importance of the Tribunal providing conclusive findings on the matter after considering all relevant submissions and legal provisions.
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