2019 (11) TMI 985 - AT - Income Tax

Non admitting assessee s claim through revised computation - AO was of the opinion that since the original return was filed belatedly, the assesee was not eligible to file revised return u/s 139 (5) - powers of the ITAT to entertain a fresh claim - additional claim for deduction other than the filing of revised return - HELD THAT - On a combined reading of the judgments of Goetze India 2006 (3) TMI 75 - SUPREME COURT and CIT vs. Pruthvi Brokers Shareholders Pvt. Ltd. 2012 (7) TMI 158 - BOMBAY HIGH COURT it is our considered opinion that although the AO cannot be held in error for not admitting the assessee s claim through revised computation, the ITAT can entertain such a claim. Therefore, it is our considered opinion that interest of justice would be served if this issue is restored to the file of the AO with a direction to accept the assesee s claim which has been filed by filing a revised computation after proper examination and verification. We are also guided by the spirit of CBDT Circular No. 14 (XL-35) of 1955 dated 11th April 1955 wherein the CBDT has laid down administrative instruction for guidance of income tax officers on matters pertaining to assessment. The Board has in the above said instruction stated that it is one of the duties of the officers of the department to assist a tax payer in every reasonable way, particularly in the matter of claiming and securing reliefs. Restore this issue to the file of the AO with the direction to admit the claim of the assessee and allow the same if after proper verification and examination it is found to be correct and as per law

Summary

Issues:
1. Whether the Assessing Officer (AO) had the power to consider the revised computation of income when a revised return of income could not be filed due to the original return being filed belatedly.
2. Whether there can be any redressal to the grievance of the assessee at this stage.

Issue 1:
The appeal involved a case where the assessee, an Indian branch office of a Swedish company, filed a belated return of income for the assessment year 2011-12. During the assessment proceedings, the assessee submitted a revised computation of income, claiming a refund due to a reduction in foreign exchange gain. The AO rejected this claim, citing the belated filing of the original return. The argument centered around whether the AO had the authority to consider the revised computation. The ITAT referred to the judgment in Goetze India Ltd. vs. CIT, emphasizing that a fresh claim cannot be accepted during assessment proceedings. The ITAT upheld the AO's decision, noting that the AO had acted in accordance with the law.

Issue 2:
Regarding the second issue of redressal for the assessee, the ITAT considered the judgment of the Bombay High Court in CIT vs. Pruthvi Brokers & Shareholders Pvt. Ltd. The case highlighted that an assessee can raise additional claims before appellate authorities, even if not made before the AO. The ITAT differentiated between the powers of the AO and the ITAT, noting that while the AO cannot entertain a fresh claim, the ITAT can do so. Citing CBDT Circular No. 14 (XL-35) of 1955, emphasizing the duty of tax officers to assist taxpayers in securing reliefs, the ITAT decided to restore the issue to the AO. The ITAT directed the AO to examine and verify the assessee's claim for refund, allowing it if found correct and as per the law. The ITAT's decision was based on the principles of justice and administrative guidance.

In conclusion, the ITAT allowed the appeal for statistical purposes, restoring the issue to the AO for further examination and consideration of the assessee's claim for refund. The decision was made in line with legal precedents and administrative instructions, ensuring fairness and proper verification of the claim.