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2018 (10) TMI 1403 - AT - Income TaxRectification of mistake u/ 154 - Claim of benefit of section 40(b) being HUF as a working partner in the partnership firm - due date of filing of return in case of HUF claiming partner in the firm whose accounts are liable to be audited - filling of belated return - Held that:- We observe that the assessee has claimed HUF as a working partner which is not correct as per many judicial precedents as relied by the ld. CIT(A) in the impugned order. This issue has been settled in Coal India Ltd. vs. M/s. Continental & Eastern Agency (RFA) OS [2011 (12) TMI 711 - DELHI HIGH COURT] considered the earlier judgments and concluded that the HUF itself cannot become a working partner in the partnership firm. Therefore, there is no question for the HUF to become a working partner. The due date of filing of return of income will be 31st July of the relevant assessment year as per section 139 of the Act and the due date for filing of return for working partner has been mentioned in Section 139(1) Explanation 2(iii). The benefit of extended date by the CBDT will not help the assessee as contended by him that due date for filing of income-tax return cannot be 15th October, 2010. In our considered opinion, AO has rightly invoked section 154 because the assessee wanted to take benefit of the notification issued by the CBDT. In the present case, as per judicial precedents, the HUF itself cannot become a partner in the partnership firm and as such the HUF can also not be a working partner in partnership firm as defined u/s. 40(b) Expln. 4 of the IT Act. The due date of filing of IT return will be 31st July and in the given case, the assessee has filed his return on 01.10.2010 which has been later on revised and claimed deduction u/s. 80C of ₹ 1 lakh which was accepted by the Assessing Officer in the original assessment proceedings. The return cannot be revised because the assessee had filed belated return. Therefore, there was a mistake apparent from the record. Accordingly, this issue is rejected. Disallowance of deduction claimed u/s. 80C - Held that:- Assessing Officer is always required to assess correct income of the assessee even if the claim was not made in the original return. For this, he has referred to CBDT circular No. 14 dated 11.04.1955 and also relied on the decision of Co-ordinate Bench of Delhi Tribunal in the case of ACIT vs. Technofab Engineering Ltd. (2009 (7) TMI 1345 - ITAT DELHI). He has also relied on a judgment in the case of CIT vs. Remco International, [2008 (12) TMI 413 - PUNJAB AND HARYANA HIGH COURT] and decision of Goetz India Ltd.[2006 (3) TMI 75 - SUPREME COURT]. Respectfully following the above judgments, cited by the assessee, we allow the appeal of the assessee and the assessee will get deduction of ₹ 1 lakh claimed u/s. 80C of the Act. - Decided in favour of assessee.
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