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TMI Blog2015 (4) TMI 1275X X X X Extracts X X X X X X X X Extracts X X X X ..... n the claim by way of revised return. However, if this claim is valid then there is no bar on his power to allow any claim in terms of above judgments and CBDT circulars . In this case what we find is that the AO has allowed the claim without commenting on the merits of the claim of the assessee and there is no observation in this behalf and what facts were filed along with return of income. AO should have made proper observation about the validity of the claim and eligibility of the assessee which is totally missing. Thus we are inclined to hold that the AO s order is erroneous and prejudicial to the interest of the Revenue. CIT looking at the lack of inquiries, instead of disallowing the claim outright should have set aside the erroneous issue back to the file of the AO to properly conduct inquiries and decide the merits of the claim. Consequently, we uphold the order of the ld. CIT but we modify the order by a direction of setting aside the issue to the file of the AO to decide it afresh after conducting proper inquiries in accordance with law by providing reasonable opportunity of being heard to the assessee. Thus the appeal of the assessee is partly allowed. - ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f income on 12.02.2013 which was not accepted by the Aayakar Seva Kendra and AO as the revised return was beyond the time limit stipulated in Sec. 139(5) of the Act. Assessee relied on the Board s Circular No.14(XI-35) of 1955 dated 11.04.55 claiming that AO can not take advantage of the ignorance of the assessee and he is duty bound to allow such a relief suo moto. Since, there was no time limit available to the assessee to file a revised return u/s 139(5), it was impossible for the assessee to comply with the law laid down the Hon ble Supreme Court in the case of Goetze (India) Ltd. Ld. A.R. relied on various court decisions to argue that benevolent circular of the Board is binding on the Assessing Officer. Hence, the deduction u/s 54F allowed by the AO on the basis of revised computation of income filed during the assessment proceedings was in accordance with the Board s Circular and the assessment order was neither erroneous nor prejudicial to the interest of revenue. He, therefore, requested to drop the proceedings initiated u/s 263 of the Act. 2.4 The ld. CIT rejected assessee's explanation by following observations. 3.1 I have d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said Board s Circular nowhere suggested that AO should entertain a claim of assessee for any relief which has become time barred or which is otherwise not allowable under the Act. The facts relating to fresh claim of deduction u/s 54 were not available on record before AO as the same were not filed with the return of income. Hence, as per return of income filed by assessee, no deduction u/s 54F was allowable to assessee. It is one thing to say that assessee was eligible for deduction on the basis of facts available on record and it is a different this to allow the assessee to file new facts before AO during assessment proceedings and make a fresh claim on that basis. In the case of assessee, fact of purchase of new residential house was not disclosed in the return of income. Hence, claim of deduction u/s 54F on the basis of such investment was not allowable in the absence of revised return as held by Apex Court. 4. Considering all the facts and circumstances of the case as discussed above, I hold that the assessment order dated 19.02.2013 for A.Y. 2010-11, was erroneous in so far as prejudicial to the interest of revenue in terms of sec. 263 of the IT Act. AO ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejudicial to the interest of revenue. Consequently the provisions of sec. 263 have been rightly applied by ld. CIT. ( ii) The facts relating to fresh claim have not been referred or placed on record before the AO. ( iii) Except making casual reference to the revised computation, not a word of observation has been mentioned by the AO in his order regarding the merits of eligibility of claim u/s 54F qua the acquisition of house property of ₹ 1.30 crores to be set off Long term capital gain offered by the assessee Thus the order of the AO is erroneous prejudicial to the interest of the revenue on these three counts, therefore, ld. CIT properly exercising his statutory power u/s 263 revised the order in a justifiable manner which deserves to be upheld. 2.7 We have heard the rival contentions and perused the materials available on record. It is a settled law that income tax assessment shall be fair and reasonable; the valid claim which are due to the assessee should be allowed to it. However hon'ble Apex Court in the case of Goetz (India) Ltd. (supra) held as under:- The dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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