TMI Blog2016 (4) TMI 207X X X X Extracts X X X X X X X X Extracts X X X X ..... filed was not in accordance with the law or if some income was wrongly offered to tax, which was as per law, not liable to tax, or if the assessee finds that there was omission to make a claim in the return of income. The only precaution to be taken here would be that fresh claim of the assessee should be strictly within the four corners of law. If it is so, the claim made even for the first time during the assessment proceedings should not be rejected. In our view, there are no estoppels on legal issues under the income tax law. Even if, assessee agrees or consents for something contrary to law, the A.O. is obliged under the law, to discharge his duty of making fair assessment of income and to compute amount of tax payable as per law. As per Article 265 of the Constitution of India, "No tax can be collected except by authority of law". Hon'ble Supreme Court in the case of Ramlal vs Rewa Coalfield Ltd (1961 (5) TMI 54 - SUPREME COURT ), held that the state authorities should not raise technical pleas if the citizens have a lawful right, which is being denied to them merely on technical grounds. The state authorities cannot adopt the attitude which private litigants might adopt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee was rejected by the AO in view of the judgment of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. v. CIT, 284 ITR 323. Being aggrieved, the assessee filed an appeal before the Tribunal, wherein the claim of the assessee on account of bad debts made during the course of the assessment proceedings was allowed on the ground that the aforesaid judgment of the Hon'ble Supreme Court was not applicable on the appellate authority. The CIT(A) also relied upon the circular issued by the Central Board of Direct Taxes no. 14 dt. 11.4.1955, wherein it was guided by the Board to the revenue officers of the Income Tax Department that they must not take advantage of the ignorance of the assessee and that it was one of the duties of the officers to assist the tax payers in determination of correct amount of tax payable, as per law. Ld. CIT(A) also followed the judgment of Mumbai Bench of ITAT in Chicago Pneumatic (India) Ltd. v. DCIT, 15 SOT 252, wherein relying upon the said circular the Hon'ble Bench had observed that assessing authorities are bound to compute the correct income, and merely for a procedural lapse on technicalities, the assessee should not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y by filing a revised return within the time allowed. In the same decision, it was made clear that the power of the Tribunal to admit an additional ground under s. 254 is not affected by its decision. It was however clarified that the case was concerned with only the power of the assessing authority and not the appellate authority. Under s. 250(5), the CIT(A) has the power to allow the appellant to go into any ground of appeal not specified in the grounds of appeal if he satisfied that the omission of the ground from the form of appeal was not willful and unreasonable. Dealing with such a power, the Bombay High Court in CIT v. Prabhu Steel Industries (P) Ltd. (1988) 171 ITR 530 (Bom), held that where a claim for special deduction was made by the assessee not in his return but in the course of the assessment proceedings and the ITO failed to consider the same, it was open to the AAC to entertain the claim. In CIT v. Kanpur Coal Syndicate (1964) 53 ITR 225 (SC), it was held by the Supreme Court that the powers of the CIT(A) of income and it was merely enlarged to 40 per cent on the footing that the assessee was running the trucks on hire. It cannot be said to be an entirely new claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utedly eligible for the claim. The only hurdle created by the AO was that since the claim was not made in the return of income, therefore, the claim could not have been allowed to the assessee. We do not respectfully agree with the views of the AO. In our considered view, if the assessee is entitled for a deduction, as per law and facts, same should not have been denied to itr merely because the claim was not made in the return of income. That would, in our considered opinion, amount to collecting taxes without authority of law. It is further noted by us that it is well settled position of law that assessee can resile from its return of income during the course of assessment proceedings if he is able to show that the return filed was not in accordance with the law or if some income was wrongly offered to tax, which was as per law, not liable to tax, or if the assessee finds that there was omission to make a claim in the return of income. The only precaution to be taken here would be that fresh claim of the assessee should be strictly within the four corners of law. If it is so, the claim made even for the first time during the assessment proceedings should not be rejected. 7. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quired to assist him and ensure that only legitimate taxes due are collected. 9. In the case of Snehlata 192 CTR 50, Hon'ble J K High Court held that when the substantive law confers a benefit on the assessee under a statute, it cannot be taken away by the adjudicatory authority on mere technicalities. It is settled proposition of law that no tax can be levied or recovered without authority of law. Article 265 of the Constitution of India and section 114 of the State (J K) Constitution imposes an embargo on imposition and collection of tax if the same is without authority of law. 10. Lastly, we find it useful to refer to judgment of Hon'ble Bombay High Court in the case of Central Provinces Manganese Ore 112 ITR 734, holding that, the mere fact that a deduction was not claimed before the Income-tax Officer, was not of much importance, since if the liability arises then a claim can be made in a bonafide manner at any stage before the higher authority, who is competent to grant relief. 11. As far as the judgment of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. v. CIT (supra) is concerned, it is respectfully stated that it has been observed in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ictions 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 is no good reason to justify curtailment of the power of the AAC in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the ITO. This Court further observed that there may be several factors justifying the raising of a new plea in an appeal and each case has to be considered on its own facts. The AAC must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The AAC should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reason. The same observations would apply to appeals before the Tribunal also. 17. In Goetze (India) Ltd. vs. CIT (2006) 204 CTR (SC) 182 : (2006) 284 ITR 323 (SC), wherein deduction claimed by way of a letter before AO, was disallowed on the ground that there was no provision under the Act to make amendment in the ret ..... X X X X Extracts X X X X X X X X Extracts X X X X
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