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TMI Blog2022 (4) TMI 577X X X X Extracts X X X X X X X X Extracts X X X X ..... A) erred in confirming the action of the Ld. AO in rejecting the assessee's rectification petition filed u/s 154 claiming the Subsidy received by the assessee as Industrial Promotion Assistance (IPA) from the state Govt, under West Bengal Industrial Promotion (Assistance to Industrial Units) Scheme, as Capital Receipt in place of Revenue Receipt. The claim of the assessee was rejected by the Ld. AO as well as the Ld. CIT(A) on the ground that the same cannot be claimed by the assessee in the rectification petition u/s 154 since the same was not claimed in the return of income filed by the assessee in view of the decision of Hon'ble Apex Court in case of Goetze India Ltd. vs CIT in 157 Taxman 1. The Ld. CIT(A) did not consider the fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffered the same for taxation in the return of income and the assessment was accordingly framed by the Assessing Officer u/s 153A r.w.s. 143(3) of the Income Tax Act vide order dated 29.12.2016. However, subsequently the assessee realized that the said amount offered by the assessee as income, in fact did not fall in the category of taxable income of the assessee, rather, the same, as settled by the various High Courts as well as by the Hon'ble Apex Court of the country, was non-taxable capital receipt. The assessee moved an application u/s 154 of the Act for rectification and pleaded that the amount of subsidy was wrongly offered for taxation under a mistaken belief, whereas, the same did not constitute taxable income of the assessee. It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the AO on this decision is correct and in light of said decision the AO has rightfully rejected the rectification petition of the assessee. Therefore, in my view, the AO's order is correct and needs to be upheld relating to rejection of rectification petition in light of decision of SC in the case of Goetze India Ltd. (supra)." 4. Being aggrieved by the said order, the assessee has come before us. 4.1. We have heard the rival contentions of the ld. representatives of both the parties and gone through the records. So far as the claim of the assessee on merits is concerned, the ld. DR has been fair enough to admit that as per the settled position of law by the Hon'ble Supreme Court in the case of CIT vs Ponni Sugars & Chemicals Ltd. [200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim of deduction etc. before the Assessing Officer. What the assessee has pleaded is that, in fact, the income returned by the assessee did not fall in the definition of income as per the provisions of the Income Tax Act. The said receipt of the assessee was non-taxable at all. It is not a case of making any fresh claim rather it is a plea of inadvertently offering for taxation a capital receipt which was non-taxable at all. The taxation of a capital receipt which did not constitute income of the assessee, in our view would constitute a mistake apparent on record. The Hon'ble Delhi High Court in the case of Vijay Gupta vs Commissioner of Income Tax WP(C) 1572/2013 vide order dated 23rd March, 2016 has deliberated upon various case laws a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of the Article 265 of the Constitution, tax can be levied only if it is authorized by law. The taxing authority cannot collect or retain tax that is not authorized. Any retention of tax collected, which is not otherwise payable, would be illegal and unconstitutional. 18. The Supreme Court of India in CIT v. Shelly Products and another 261 ITR 367 held that if the assessee has by mistake or inadvertence or on account of ignorance, included in his income any amount which is exempted from payment of income-tax or is not income within the contemplation of law, the assessee may bring the same to the notice of the assessing officer, which if satisfied, may grant the assessee necessary relief and refund the tax paid in excess, if any. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g reliefs and in this regard the officers should take the initiative in guiding a tax payer where proceedings or other particulars before them indicate that some refund or relief is due to him. This attitude would, in the long run, benefit the department, for it would inspire confidence in him that he may be sure of getting a square deal from the department. Although, therefore, the responsibility for claiming refunds and reliefs rests with the assesses on whom it is imposed by law, officers should - (a) draw their attention to any refunds or reliefs to which they appear to be clearly entitled but which they have omitted to claim for some reason or other; (b) freely advise them when approached by them as to their rights and liabilitie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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