TMI Blog2017 (2) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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. - I.T.A. No.556/Mum/2015 - - - Dated:- 30-11-2016 - SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI ASHWANI TANEJA (ACCOUNTANT MEMBER) For The Appellant : Dr. K Shivram For The Respondent : Miss Rampriya Raghavan ORDER Per ASHWANI TANEJA, AM: This appeal has been filed by the assessee against the order of Commissioner of Income-tax (Appeals)-20, Mumbai [hereinafter called CIT(A)] dated 17-10-2014 passed against the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder:- Dear Sir, With reference to above we are in receipt of Assessment order passed u/s 143(3) of the Income Tax Act 1961 for the above year, we write to you as under :- Without prejudice to our contention in the appeal filed against the above order we have to request you to kindly pass an order rectifying the mistake apparent from record as stated below and oblige. Sir, while treating the Income from Mutual Fund as Income from Other Sources of ₹ 76,40,047/-, out of which the deduction of ₹ 48,90,114/- for being dividend on units of Mutual Fund which is exempted is not considered for exemption. 4. Being aggrieved, the assessee filed appeal before the Ld. CIT(A) wherein it was submitted that the assessee is eligible for exemption u/s 10(35) on the amount of dividend income received from mutual funds which the AO ought to have allowed himself while re-computing the income of the assessee and taxing the aforesaid income as Income from other sources . But, Ld. CIT(A) was not satisfied with the submission of the assessee and he rejected the submissions on the ground that no relief could have been provided to the assessee u/s 154. Being aggriev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ignorance of the assessee and the income of the assessee should be assessed strictly in accordance with law after granting proper relief due to the assessee as per law. 6. Per contra, the Ld. DR relied upon the orders of the lower authorities. She further submitted that there was a technical lapse on the part of the assessee, thus claim made u/s 154 has rightly been rejected by the lower authorities. 7. We have gone through the facts of the case and arguments made by both the sides and also the orders passed by lower authorities. The only dispute which is required to be addressed by us is that if the assessee is eligible for the benefit of exemption u/s 10(35) upon the dividend income received from mutual funds during the year amounting to ₹ 48,90,114/-, then whether the same 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. 8. We have analysed full facts of this case and also examined legal position under the income tax law as would be applicable under such situations, as has been explained by various courts in o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not adjudicated upon by the Tribunal. Thus, it was open before the AO to assess the income as per law after granting requisite exemption. 10. The second obstacle mentioned by the AO for giving relief to the assessee was that no such relief could have been given u/s 154, since only a mistake apparent on record could have been rectified and not any debatable issue. In this regard, it has been brought to our notice that AO had himself carried out rectification u/s 154 vide his order dated 10-06- 2008 for A. Y. 2005-06 wherein benefit of exemption has been granted upon the identical amount of dividend income received from mutual funds. Relevant part of the order passed by Ld. AO u/s 154 for AY 2005-06 reads as under:- ORDER UNDER SECTION 154 OF THE INCOME TAX ACT, 1961 The assessee's representative, M/s. Shamit Majumdar Associates, C.As., vide letter dated.18.2.2008 has stated that during the course of assessment proceedings u/s. 143(3), while. treating the income from Mutual Fund as lncome 'from other sources of ₹ 11,08,963/-, out of which 'the deduction of ₹ 7,79,674/- for being dividend on units of Mutual Fund which is exempted is not consid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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