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2017 (2) TMI 171 - ITAT MUMBAIRectification of mistake - eligibility for the benefit of exemption u/s 10(35) upon the dividend income received from mutual funds - whether claim can be denied to the assessee, if the claim of such benefit was not made in the original return, but made through petition u/s 154 only when its need arose as a result of re-computing of income by the AO? - Held that:- AO had himself granted the benefit of exemption and that too u/s 154. Thus, the AO was very much aware of this fact that dividend income of the assessee is eligible for the benefit of exemption u/s 10(35). In our considered view, not granting similar relief by the AO in the year before us, under these circumstances, constitutes a mistake apparent on records. Further, courts have time and again held that if technical considerations are pitted against the substantive justice, it is the latter which prevails. Moreover, article 265 of the Constitution of our country clearly stipulates that no tax can be collected except with the authority of law. Thus, main object of the income tax proceedings is to enable the AO to compute the taxable income and tax payable thereon in accordance with law. The role assigned to the AO by the legislature is quite onerous. Therefore, the AO should not take undue advantage of ignorance of the assessee and should follow a fair approach by allowing legitimate claims of the assessee so that only that amount of tax is recovered from the assessee which is due as per law. The impugned income has been received by the assessee from Kotak Mutual Fund which is duly eligible for the benefit of exemption u/s 10(35). No doubts were raised by the Ld. DR also in this regard before us. Under these circumstances, in our considered opinion, the AO should have granted benefit of exemption to the assessee. - Decided in favour of assessee.
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