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Attitude who cares for instructions or advice of the highest authority is very common when it comes about relief to be allowed to taxpayer. A discussion with reference to related issues and some judgments

Attitude ‘who cares for instructions or advice of the highest authority’ is very common when it comes about relief to be allowed to taxpayer. A discussion with reference to related issues and some judgments - Income Tax - By: - CA DEV KUMAR KOTHARI - Dated:- 1-5-2017 Last Replied Date:- 30-12-1899 - Some of relevant links and references: The CBDT Circular No.14 of 1955 dated 11.04.1955 - this must be followed by all tax authorities, unfortunately many CIT(A) also do not care and follow Circulars .....

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partment must not take advantage of ignorance of an assessee as to his right. It is one of their duties to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs and in this regard the Officers should take initiative in guiding a taxpayer where 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 .....

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efs. Therefore, The CBDT being highest authority, vide S. 116 and 119, has long ago adopted taxpayer friendly approach, in the matter of allowing relief and benefits which are available to any assessee as per proceedings, documentsand details available in relevant records which include assessment records, appeal records, records relevant to any other petition or proceedings. Ground reality: There are very few tax authorities who work in desirable manner as per above circular or even otherwise as .....

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han 99% situation is in favour of assessee, many tax authorities would prefer to deny the relief. This is the reason that there is lot of litigation because tax authorities force tax payers to indulge into litigation to get relief. From the circular : No. 14(XL-35), dated 11-4-1955. Ground reality and observations of 1. The Board have issued instructions from time to time in regard to the attitude which the Officers of the Department should adopt in dealing with assessees in matters affecting th .....

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ent in granting refunds and giving reliefs due to assessees under the Act. Dilatoriness or indifference in dealing with refund claims (either under section 48 or due to appellate, revisional, etc., orders) must be completely avoided so that the public may feel that the Government are actually prompt and careful in the matter of collecting taxes and granting refunds and giving reliefs. Except the cases of system generated orders and refunds the experience is not good. Even in some system generate .....

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ecuring reliefs and in this regard the Officers should take the initiative in guiding a taxpayer where 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 assessee on whom it is imposed by law, officers sho .....

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want to follow judgments of the Supreme Court in hope that there will be a retrospective amendment. The judgment of the Supreme Court in case of Goetz India Ltd. is used frequently to deny relief not claimed in return, even if clearly allowable. 4. Public Relation Officers have been appointed at important centres, but by the very nature of their duties, their field of activity is bound to be limited. It is very difficult to contact PRO and to get proper guidance. The following examples (which a .....

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] - The officer should in every appropriate case bring to the assessee s notice the possibility of obtaining a certificate authorising deduction of income-tax at a rate less than the maximum or deduction of super tax at a rate lower than the flat rate, as the case may be. Rarely (3) Section 25(3) and 25(4) of the 1922 Act - The mandatory relief about exemption from tax must be granted whether claimed or not ; the other relief about substitution, if not time barred, must be brought to the notice .....

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r thinks that an assessment should be revised, must be brought to the notice of the Commissioner of Income-tax. We have seen many cases of initiatives by AO for initiation of revision proceedings u/s 263 but not a single one u/s 264,as per experience of many known assesses and practioners . (6) Section 35 of the 1922 Act [sections 154 and 155 of the 1961 Act] - Mistakes should be rectified as soon as they are discovered without waiting for an assessee to point them out. Rarely a rectification in .....

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e in various forms, they should not themselves make any in them on their behalf. Where such advice is given, it should be clearly explained to them that they are responsible for the entries made in any form and that they cannot be allowed to plead that they were made under official instructions. This equally applies to the Public Relation Officers. It is very difficult and time consuming to get such opportunities. So these become theoretical. 6. The intention of this circular is not that tax due .....

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und, the refund may be denied on ground that it is admitted tax paid how you can claim refund without filing a revised return of income. There are lot of limitations if originally a relief is not claimed. The above circular has been referred to by Tribunals and courts and relief has also been allowed keeping in mind the spirit of better tax administration and service to taxpayers and also binding nature of circular. Binding nature of circular lose its significance because of disobedience of tax .....

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to exempted long-term capital gains in the Return of Income. Assessee made a rectification petition, which was rejected by the AO for want of some information and documents and may be some other reasons like no claim in ROI ( it is not clear from reported judgment). (from reported judgment) It is not clear whether AO asked assessee to furnish such details and documents, and whether reasonable opportunity was allowed or not) or any other ground to reject claim was taken by AO. This is because usu .....

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and High Courts that appellate authority can entertain a claim even if made for first time in some circumstances. Appeal before Tribunal: In above circumstances , the assessee had to approach, Tribunal by filing an appeal. The Tribunal considered all relevant facts, orders of the AO and CIT(A). The paragraph 6 of the order which contains reasoning and order of Tribunal is reproduced below (highlights added by author): 6. I have heard the rival submissions. The CBDT Circular No.14 of 1955 dated .....

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Hon ble supreme Court in the case of Goetz (India) Ltd. (supra) for sustaining the order of the AO u/s 154 of the Act. The Hon ble Supreme Court in it s decision rendered in the case of Goetze (India) Ltd vs CIT has clarified that the appellate authorities under the Act have the power to consider the claim even if the business** of the revised return of income. In my view, therefore, the claim of the assessee that Long Term Capital Gain is exempt u/s 10(38) of the Act has to be examined by the .....

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claim. It is not clear whether AO asked assessee to furnish such details and documents, and whether reasonable opportunity was allowed or not). However, as per general practice it is likely that the AO did not ask the assessee to furnish such details or documents by way of an effective and adequate opportunity. The judgment relied on by CIT(A) is not applicable on him. He could have entertained the claim in view of judgments applicable in case of appellate authorities as well as the circular. H .....

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l provisions also make it difficult for assessee to prefer claim in ROI on contentious issues. In the E-ITR forms there is no space provided for preferring further claims for consideration of the AO. Therefore, many times claims are not made in ROI. An illustration of difficulty in claiming relief in ROI: On contentious issues, there is always difficulty in making claim due to difference of opinion, different judgments prevailing, absence of precedence, difficulty in decision making by managemen .....

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ies: Author at first reading of provisions of S.43 (6) some time in 1983, Circular relating to tea companies about investment allowance, development rebate, and many judgments of the Supreme Court on issue of WDV and depreciation actually allowed was convinced that only 40% of notional depreciation computed at prescribed rates is actually allowed when taxable income is computed U/R 8. Therefore only 40% of notional depreciation should be deducted from cost of block of assets to determine WDV for .....

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