TMI Blog2021 (7) TMI 1140X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has not made such claims before the AO by filing a revised return as per the provisions of section 139(5) of the Act. We, therefore, deem it proper to restore the issue to the file of the CIT(A) with a direction to admit the additional ground. - ITA No. 3618/Del/2017 - - - Dated:- 28-7-2021 - SHRI R. K. PANDA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER Assessee by : Shri Ajay Wadhwa, Advocate Revenue by : Shri Shashi Bhusan Shukla, CIT, DR ORDER PER R.K. PANDA , AM : This appeal filed by the assessee is directed against the order dated 21st February, 2017 of the CIT(A)-38, New Delhi relating to assessment year 2003-04. 2. Grounds raised by the assessee are as under:- On the facts and circumstances of the case and in law, the learned Assessing Officer ( AO ) has erred in passing the assessment order under section 143(3) of the Income- tax Act, 1961 ( the Act ) after considering the adjustments proposed by the learned Transfer Pricing Officer ( TPO ) in his order passed under section 92CA(3) of the Act and subsequently confirmed by the learned Commissioner of Income-tax (Appeals) - 38 [ CIT(A) ] under section 250(6) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 139(5)of the Income-tax Act, 1961. Those claims were (i) Inadvertent disallowance taken in the return of income under the mistaken belief that freight expenses of ₹ 73,42,630/- were debited to the Profit Loss A/c, whereas said freight expenses were not at all debited to the Profit Loss A/c of that year; (ii) Allowance of deduction not taken in the return of income u/s 43B amounting to ₹ 80,19,029/- in respect of employee contribution to gratuity fund of AY 2002-03 paid during AY 2003-04; (iii) Allowance of deduction not taken u/s 43B amounting to ₹ 51,20,457 in respect of bonus and commission of AY 2002-03 paid during AY 2003-04; (iv) Excess disallowance taken of ₹ 21,00,000 u/s 43B towards bonus and commission incurred and remaining unpaid for AY 2003-04. 6. The learned AO has erred in initiating penalty proceedings under section 271(1)(c) of the Act. 7. The learned AO has erred in law in charging interest u/s 234B of the Act. The appellant craves leave to add, amend, alter, delete, rescind, forgo or withdraw any of the above grounds of appeal either before or during the course of the proceedings before the Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revised in that year itself meaning that the expenses were never booked in this year for the first place. To support the above contention, the assessee company also filed an affidavit of Shri Sudhir Singhal, Dy. General Manager (Accounts) dated 23rd October, 2007. It was submitted that out of the above a sum of ₹ 73,42,630/- has been charged to the Profit Loss Account for the year ended 31st March, 2003 as there was a disagreement with the supplier over who is to bear the freight. Ultimately, in the next F.Y. i.e., 2003-04, these expenses were debited and were reversed in the books of account of Xerox India Ltd., with the result that the company has not booked any expense ever with respect the above invoice of the debit notes. The assessee relied upon the CBDT Circular No.14 dated 11th April, 1995 and various decisions to support the contention that additional claim raised at appellate stage should be allowed if the same is on account of error/omission and is patently allowable by law and on import. 6. Based on the arguments advanced by the assessee, the ld.CIT(A) called for a remand report from the AO who opposed the admission of the additional ground on the plea that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 43B of ₹ 80,19,029/- pertaining to employee s contribution to gratuity fund for A.Y. 2002-03, claim of deduction u/s 43B of ₹ 51,20,457/- pertaining to bonus and commission for A.Y. 2002-03 paid during this year and claim of excess disallowance of ₹ 21 lakhs u/s 43B towards bonus and commission incurred and remained unpaid for A.Y. 2003- 04 by holding that there is no provision in the Act which permits additional claims being raised otherwise than u/s 139(5) i.e., by way of filing of a revised return. 9. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal. 10. The ld. counsel for the assessee, at the time of hearing, drew the attention of the Bench to para 4.8.8 of the order of the CIT(A) and submitted that although the ld.CIT(A) has given a finding that the assessee has filed evidences before the AO in remand proceedings to show that the claims were otherwise factually correct, she rejected the same on the ground that the assessee has not filed any revised return as per the provisions of section 139(5) of the IT Act. He submitted that the ld.CIT(A) while deciding the issue against the assessee has relied upon the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the said decision has held that even if a claim made by assessee company does not form part of original return or even revised return, it can still be considered by Assessing Officer as well as appellate authorities in case relevant material is available on record. 13. Referring to the decision of the Hon ble Delhi High Court in the case of CIT vs. Sam Global Securities Ltd., reported in 38 taxmann.com 129, he submitted that the Hon ble High Court in the said decision has held that the Tribunal has comprehensive jurisdiction which gives discretion to allow a new ground to be raised. It has been held that the IT Department is not expected to raise revenue from an ignorant assessee and the AO is obliged to extend relief to such an assessee. Referring to the decision of the Hon ble Madras High Court in the case of Ramco Cements Ltd. vs. DCIT reported in 373 ITR 146, he submitted that the Hon ble High Court in the said decision has held that additional grounds claiming market development/advertisement expenses raised by the assessee before appellate fora being bona fide required to be considered on merit. Referring to the decision of the Hon ble Delhi High Court in the case of CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar that the issue in the case was limited to the power of the assessing authority and that the judgment does not impinge on the power of the Tribunal under section 254. 24. A Division Bench of the Delhi High Court dealt with a similar submission in Commissioner of Income-tax v. Jai Parabolic Springs Limited, (2008) 306 ITR 42. The Division Bench, 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 Division Bench 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. 16. We find, the Hon ble Madras High Court in the case of Abhinitha Foundation (P) Ltd. (supra) has held that even if a claim made by assessee company does not form part of original return or even revised return, it can still be considered by the Assessing Officer as well as appellate authorities in case relevant materia ..... X X X X Extracts X X X X X X X X Extracts X X X X
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