2017 (7) TMI 869 - HC - Income Tax

Exemption of income computable under Section 11(1B) - whether the Tribunal was not justified in holding that the CIT (Appeals) could exclude the deemed Capital Gain Income of the Trust from its Total Income even though the Assessee Trust had not claimed such exclusion in its Return of Income and no Revised Return had been filed by the Assessee Trust? - Held that - The genuineness of the transactions in question so also its nature is not disputed by the Revenue. The Commissioner (Appeals) has observed that the Assessee trust is enjoying exemption of income computable under Section 11(1B) of the Act. From perusing the Assessment Order, it is apparent that the Assessing Officer was satisfied about the claim of the Appellant that the income declared in return under Section 11(1B) was done erroneously, as on this claim made by the Appellant during Assessment, no adverse finding has been made. The judgment of Goetze India Limited (2006 (3) TMI 75 - SUPREME Court) of the Apex Court is referred to by the Division Bench of this Court in case of Pruthvi Brokers and Shareholders P. Ltd. (2012 (7) TMI 158 - BOMBAY HIGH COURT) wherein this Court has observed that the Assessee is entitled to raise not merely additional legal submissions before the Appellate Authorities but is also entitled to raise additional claims. The Appellate Authorities have jurisdiction to deal with additional grounds, which were available when the return was filed. In the present case also the Revenue had not suggested that the omission was deliberate or malafide.

Summary

Issues:
- Whether the Tribunal was justified in excluding deemed Capital Gain Income of the Trust from Total Income without the Trust claiming such exclusion in its Return of Income and without filing a Revised Return?

Analysis:
1. The appeal involved a substantial question of law regarding the exclusion of deemed Capital Gain Income by the Tribunal without the Trust claiming such exclusion in its Return of Income for Assessment Year 2008-09.

2. The Appellant's counsel argued that as per the judgment in Goetze India Limited vs. Commissioner of Income Tax, the Assessee cannot raise an additional claim without filing a revised return. The counsel contended that the Tribunal and Commissioner (Appeals) erred in not considering this aspect, leading to an erroneous conclusion.

3. The Respondent's counsel cited the judgment in Commissioner of Income Tax vs. Pruthvi Brokers and Shareholders P. Ltd., where it was established that the Assessee can raise additional claims without filing a revised return, as observed by the Apex Court in the Goetze India Limited case.

4. The Court noted that the genuineness and nature of the transactions were not disputed by the Revenue. The Assessee trust was enjoying exemption under Section 11(1B) of the Act, and the Assessing Officer accepted the claim made by the Appellant during Assessment without any adverse findings.

5. Referring to the judgment in Goetze India Limited, the Court reiterated that Assessees can raise additional claims before Appellate Authorities without filing revised returns, as established in the Pruthvi Brokers case. The Court emphasized that the Revenue did not suggest any deliberate omission or malafide intent in this case.

6. Considering the above, the Court concluded that no substantial question of law arose in the present appeal. The appeal was dismissed with no costs incurred.