TMI Blog2013 (2) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... 11, 1955. CIT(A) has to be decide as to whether the asset on which depreciation is claimed is a business asset and if so, to allow the claim of the assessee in accordance with law. Remand back to revenue - ITA No.1025/Bang/2011 - - - Dated:- 24-8-2012 - George K and Jason P Boaz, JJ. Appellant Rep by: Shri Raghavendra Chakravarthy, CA Respondent Rep by: Smt Susan Thomas Jose, JCIT ORDER Per: George K: This appeal instituted by the assessee is directed against the order of the CIT(A), Mysore dated 26/8/2011. The relevant assessment year is 2007-08. 2. The assessee has raised four grounds in the Memorandum of Appeal. Ground no.1 and 4 are general in nature and no specific adjudication is called for; hence, the same are dismissed. 3. Ground no.2 and 3 reads as follows:- 2) The learned CIT(A) is not justified in holding that the claim made by the appellant in the return of income filed in course of assessment proceedings cannot be allowed as the revised return of income cannot be acted upon by the learned Assessing Officer under the facts and in the circumstances of the appellant s case. 3) The authorities below are not justified in not allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nha v CIT 220 ITR 67. Further, the CIT(A), relying on the judgement of the Hon ble Supreme Court in the case of Goetze (India) Ltd. v CIT reported in 284 ITR 323, held that the assessee could not make a claim for deduction other than by filing revised return. The CIT(A) concluded that in view of the above said judgements of Supreme Court, the assessee could only claim additional expenditure by way of revised return under section 139(5) and when the original return is not filed within the time prescribed under section 139(1) or 139(2), the assessee cannot file a revised return under section 139(5) of the Act. 7. The assessee being aggrieved is in appeal before us. 8. The learned AR submitted that the depreciation claim to the tune of Rs.3,86,934/- was on the Benz Car, which was used only for the purpose of business. It was contended that the depreciation is a specific relief and allowance be given to the assessee under section 32 of the Act for the use of the asset in the business. Drawing reference to Explanation 5 to section 32(1), it was contended that whether the assessee claimed depreciation or not, the Assessing Officer is duty bound to grant depreciation. The learned AR a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd the officers should take the initiative in guiding a taxpayer where the 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 assessee on whom it is imposed by the 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 liabilities and as to the procedure to be adopted for claiming refunds and reliefs . 10.2 In view of Explanation 5 to section 32(1), the Assessing Officer was duty bound to grant depreciation allowance, whether the same is claimed by the assessee or not, provided the conditions mentioned under section 32 are satisfied. The controversy could be examined from another angle. No doubt, the revised return cannot be taken cognizance of since the original return was filed bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a fresh assessment, The AAC has, therefore, plenary powers in disposing of an appeal. The scope of his power is co-terminus with that of the ITO. He can do what the ITO can do and also direct him to do what he has failed to do . 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 co-terminus with that of the ITO, 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 ITO. No exception could be taken to this view as the Act does not place any restriction or limitation on the exercise of appellate power. Even otherwise an Appellate Authority while hearing appeal against the order of a subordinate authority may have in deciding the question before it subject to the restrictions or limitations if any prescribed by the statutory provisions. In the absence of any statutory provision the Appellate Authority is vested with all the plenary powers which the subordinate authority may have in the matter. There appears to be no good rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. The Full Bench held:- Thus, the Appellate Assistant Commissioner has very wide powers while considering an appeal which may be filed by the assessee. He may confirm, reduce, enhance or annul the assessment or remand the case to the Assessing Officer. This is because, unlike an ordinary appeal, the basic purpose of a tax appeal is to ascertain the correct tax liability of an assessee in accordance with law. Hence an Appellate Assistant Commissioner also has the power to enhance the tax liability of the assessee although the Department does not have a right of appeal before the Appellate Assistant Commissioner. The Explanation to sub-section (2), however, makes it clear that for the purpose of enhancement, the Appellate Assistant Commissioner cannot travel beyond the proceedings which were originally before the Income Tax Officer or refer to new sources of income which were not before the Income Tax Officer at all. For this purpose, there are other separate remedies provided under the Income-tax Act . 10.5 The Hon ble Supreme Court in the case of National Thermal Power Company Limited v CIT (1998) 229 ITR 383 was considering a case where the assessee had deposited its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est possible terms. The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it 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. 10.6 The Hon ble Supreme Court in the case of Goetze (India) Limited v. Commissioner of Income-tax (supra) relied on by the CIT is distinguishable on the facts. The question before the Court was w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court judgement in the case of Goetze (India) Ltd. (Supra). The Hon ble Delhi High Court, in paragraph 17 of the judgment held that the Supreme Court dismissed the appeal making it clear that the decision was limited to the power of the assessing authority to entertain a claim for deduction otherwise than by a revised return and did not impinge on the powers of the Tribunal. In paragraph 19, the Hon ble High Court held that there was no prohibition on the powers of the Tribunal to entertain an additional ground which, according to the Tribunal, arises in the matter and for the just decision of the case. 10.9 In the instant case, the CIT(A) has not examined the issue in correct perspective taking into consideration the Explanation 5 to section 32(1) of the Act and the Board s Circular mentioned supra. The CIT(A) is empowered to consider additional claim made before him, though not made in the return filed. Therefore, in the interest of justice and equity, the case is restored to the file of the CIT(A) to consider the issue afresh and decide as to whether the asset on which depreciation is claimed is a business asset and if so, to allow the claim of the assessee in accordance with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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