TMI Blog2012 (7) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... ing modification of the order of assessment passed by the Income Tax Officer - The appellate authorities have the discretion whether or not to permit such additional claims to be raised. The conclusion that the error in not claiming the deduction in the return of income was inadvertent cannot be faulted for more than one reason. It is a finding of fact which cannot be termed perverse. There is nothing on record that militates against the finding. The appellant has not suggested, much less established that the omission was deliberate, mala-fide or even otherwise. The inference that the omission was inadvertent is, therefore, irresistible - INCOME TAX APPEAL NO. 3908 OF 2010 - - - Dated:- 21-6-2012 - S.J. VAZIFDAR, M.S. SANKLECHA, JJ. Mr. Vimal Gupta with Ms. Padma Divakar for the Appellant. Mr. J.D. Mistri, senior counsel - amicus curiae, for the Respondent. ORAL JUDGMENT. : [Per S.J. Vazifdar, J.] 1. This is an appeal under section 260-A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal (hereinafter referred to as the Tribunal ), dismissing the appellant's appeal against the order of the Commissioner of Income T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.10,00,000/- each paid on 16th July, 2004 and 29th April, 2004 i.e. during the financial year 2004-05, relevant to assessment year 2005-06. Thus, admittedly, for the relevant assessment year viz. 2004-05, the respondent was not entitled to a deduction in respect of the said payments. 5. The respondent, in the course of the proceedings before the Assessing Officer, stated that the claim was made through inadvertence. The respondent, however, made a claim of Rs.40,00,000/- under section 43-B also being payment of the SEBI fees but made on 9th May, 2003 i.e. in the assessment year in question. The respondent, in its response to the AO, stated inter-alia, as under : Further the assessee company had made another payment of SEBI fees of Rs.40,00,000/- on 09.5.2003 which pertains to provisions made for the F.Y. 2001- 02 and should be allowed on payment basis. However, during the assessment year 2004-05, by inadvertence the assessee company claimed a deduction of Rs.20,00,000/- only as against the correct claim of Rs.40,00,000/-. Therefore, in A.Y. 2004-05 the assessee company is entitled to a total deduction of Rs.40,00,000/- as against Rs.20,00,000/- claimed by the assessee in it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... book filed in the appeal. This meets Mr. Gupta's contention on behalf of the appellant that in any event, the fact of payment of Rs.40,00,000/- had neither been stated by the respondent nor considered in the impugned order. The operative part of the order of the CIT(A) reads as under :- 3.8 As the amount of Rs.40 lacs has been paid as Fee to SEBI during F.Y. 03-04 and the provisions of sec.43B clearly states that such payments are to be allowed only on actual payment, the sum of Rs.40 lacs, is, therefore, allowable. The A.O. is directed to allow the deduction of Rs.40 lakhs u/s.43B of the I.T.Act. 4. The appeal is allowed. It is also important to note that in the appeal filed by the appellant before the Tribunal, there is no challenge to the CIT(A) having entertained the respondent's claim for deduction on the ground that the appellate authority had no jurisdiction to do so. Even if such a contention had been raised, it would make no difference. (B) The Tribunal disposed of the appellant's appeal by the impugned order dated 24th November, 2009. 9. The order of the CIT(A) and the order of the Tribunal impugned in this appeal have held in favour of the respondent by gran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act describes the powers of the Appellate Assistant Commissioner in such an appeal. Under Section 31(3)(a) in disposing of such an appeal the Appellate Assistant Commissioner may, in the case of an order of assessment, confirm, reduce, enhance or annul the assessment; under clause (b) thereof he may set aside the assessment and direct the Income Tax Officer to make a fresh assessment. The Appellate Assistant Commissioner has, therefore, plenary powers in disposing of an appeal. The scope of his power is co-terminus with that of the Income-tax Officer. He can do what the Income-tax Officer can do and also direct him to do what he has failed to do. (emphasis supplied) 6. The above observations are squarely applicable to the interpretation of Section 251(1)(a) of the Act. The declaration of law is clear that the power of the Appellate Assistant Commissioner is coterminus with that of the Income Tax Officer, if that be so, there appears to be no reason as to why the appellate authority cannot modify the assessment order on an additional ground even if not raised before the Income Tax Officer. No exception could be taken to this view as the Act does not place any restriction or li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iscretion in accordance with law and reason. He must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The satisfaction of the Appellate Assistant Commissioner depends upon the facts and circumstances of each case and no rigid principles or any hard and fast rule can be laid down for this purpose. [emphasis supplied] 13. The underlined observations in the above passage do not curtail the ambit of the jurisdiction of the appellate authorities stipulated earlier. They do not restrict the new/additional grounds that may be taken by the assessee before the the appellate authorities to those that were not available when the return was filed or even when the assessment order was made. The sentence read as a whole entitles an assessee to raise new grounds/make additional claims :- if the ground so raised could not have been raised at that particular stage when the return was filed or when the assessment order was made.... or if the ground became available on account of change of circumstances or law The appellate authorities, therefore, have jurisdiction to deal not merely with additional grounds, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs justifying the raising of a new plea in appeal and each case must be considered on its own facts. However, such cases include those, where the ground though available when the return was filed or the assessment order was made, was not taken or raised for reasons which the appellate authorities may consider valid. In other words, the jurisdiction of the appellate authorities to consider a fresh or new ground or claim is not restricted to cases where such a ground did not exist when the return was filed and the assessment order was made. 16(A). A Full Bench of this Court in Ahmedabad Electricity Limited v. Commissioner of Income-tax, (1993) 199 ITR 351 considered a similar situation. In that case, the appellant/assessee did not claim a deduction in respect of the amounts it was required to transfer to contingencies reserve and dividend and tariff reserve either before the Income Tax Officer or before the Appellate Assistant Commissioner in appeal. Subsequently, this Court had, in Amalgamated Electricity Company Limited v. Commissioner of Income-tax, (1974) 97 ITR 334, held that such amounts represented allowable deductions on revenue account. The appellant, therefore, raised a n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eclaration of the law. The assessee could have raised the ground in its return itself. It did not have to await a decision of a court in that regard. Indeed, even if a judgment is against an assessee, it is always open to the assessee to claim the deduction and carry the matter higher. The words could not have been raised , therefore, cannot be read strictly. Neither the Supreme Court nor the Full Bench of this Court meant them to be read strictly. They include cases where the assessee did not raise the claim for a reason found to be reasonable or valid by the appellate authorities in the facts and circumstances of a case. 17. The next judgment to which our attention was invited by Mr. Mistri is the judgment of a Bench of three learned Judges of the Supreme Court in National Thermal Power Company Limited v. Commissioner of Income-tax, (1997) 7 SCC 489 = (1998) 229 ITR 383. In that case, the assessee had deposited its funds not immediately required by it on short term deposits with banks. The interest received on such deposits was offered by the assessee itself for tax and the assessment was completed on that basis. Even before the Commissioner of Income-tax (Appeals), the inclus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is found that a non-taxable item is taxed or a permissible deduction is denied, we do not see any reason why the assessee should be prevented from raising that question before the Tribunal for the first time, so long as the relevant facts are on record in respect of that item. We do not see any reason to restrict the power of the Tribunal under Section 254 only to decide the grounds which arise from the order of the Commissioner of Income Tax (Appeals). Both the assessee as well as the Department have a right to file an appea1/crossobjections before the Tribunal. We fail to see why the Tribunal should be prevented from considering questions of law arising in assessment proceedings although not raised earlier. 18. In the case before us, the CIT(A) and the Tribunal have held the omission to claim the deduction of Rs.40,00,000/- to be inadvertent. Both the appellate authorities held, after considering all the facts, that the assessee had inadvertently claimed a deduction of Rs.20,00,000/- paid after the end of the year in question. We see no reason to interfere with this finding. We see less reason to interfere with the exercise of discretion by the appellate authorities in permi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities. The deduction was disallowed by the Assessing Officer on the ground that there was no provision under the Act to make an amendment in the return of income by modifying an application at the assessment stage without revising the return. The Commissioner of Income-tax (Appeals) allowed the assessee's appeal. The Tribunal, however, allowed the department's appeal. In the Supreme Court, the assessee relied upon the judgment in National Thermal Power Company Limited contending that it was open to the assessee to raise the points of law even before the Tribunal. The Supreme Court held :- 4. The decision in question is that the power of the Tribunal under section 254 of the Income-tax Act, 1961, is to entertain for the first time a point of law provided the fact on the basis of which the issue of law can be raised before the Tribunal. The decision does not in any way relate to the power of the Assessing Officer to entertain a claim for deduction otherwise than by filing a revised return. In the circumstances of the case, we dismiss the civil appeal. However, we make it clear that the issue in this case is limited to the power of the assessing authority and does not impinge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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