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TMI Blog2022 (10) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment order shows that the case of assessee was selected for limited scrutiny under CASS for following reasons :- a. Sale consideration of property in ITR is less than sale consideration in Form 26QB. b. Tax credit claimed in ITR is less than tax credit available in 26AS. c. High income reported in the return and no entry in Schedule assets and Liabilities of return of income. d. Mismatch in sales turnover reported in Audit Report and ITR. e. Substantial increase in capital in a year. 2.1 During the assessment proceedings, Ld. AO vide note sheet entry dated 05.12.2016 asked the assessee to reply as to why sale consideration of Rs. 25,75,00,000/- as shown in 26AS was not shown in ITR and why no income was offered as capital gains. Assessee replied to the same submitting that the transaction of sale of property was inadvertently overlooked by the Accountant of the Assessee while filing the Income Tax Return and similarly the details of exemptions were also not disclosed inadvertently. However, since the Assessee has fulfilled all the conditions of exemption and the defect being only procedural in nature, it was submitted that the claim of exemption may kindly be gran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment. Further assessee's submission that the assessee has voluntarily placed all the documents on record during the course of the assessment proceedings is not true. Assessee furnished the details only when he was specifically asked vide note sheet entry dated 05.12.2016. Ld AO observed; "In the present case, ratio of judgment of Hon'ble Supreme court in the case of Goetze (India) Ltd. vs CIT, order dated 24th March, 2006 is applicable where Hon'ble Supreme Court while referring to its own earlier decision in National Thermal Power Company Limited Vs CIT 229 ITR 383, held that before the AO the assessee could not make a claim for deduction otherwise than by filing a revised return. Considering the above facts and discussion, Assessee's claim of deduction u/s 54 is hereby rejected. Hence, Long Term Capital Gain on sale of the property, as calculated below." 3. The Ld. CIT(A) dealt with the controversy by following observations : "5.7 The appellant averred that the learned AO has incorrectly applied the principle laid down by the Apex Court in the case of Goetze (India) Ltd. vs. CIT reported in 284 ITR 323. I find that the issue of allowability of deduction even without its c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time of hearing." 5. Heard and perused the record. 6. The Ld. DR submitted that Ld. CIT(A) has fallen in error in reversing the findings of ld. AO who had relied the judgment of Hon'ble Supreme Court of India in the case of Goetze (India) Ltd. vs. CIT [2006] 284 ITR 323 (SC) while holding that assessee cannot make a fresh claim of deduction during assessment proceedings otherwise then by filing revised return. It was submitted that the relevant material was not before Ld. AO and in any case if Ld. CIT(A) was taking into consideration fresh evidence then opportunity should have been given to the Ld. AO to rebut the same. It was submitted that the cases relied by Ld. CIT(A) in M/s. Abhinitha Foundation Pvt. Ltd. 2014 taxman is mis-construed as the facts were different. It was submitted that in the cases relied on behalf of the assessee, Ld. AO was made aware of the essential facts. It was submitted that in the case in hand facts like date of completion of house required examination and the also documentary evidences was not available with Ld. AO and he could not examine the same. 6.1 On the other hand, Ld. Sr. counsel representing the assessee took the bench through various portio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had made claim beyond his return. Assessment is not only of the income but also involves considering claim of the exemption or deduction which flow with the assessee's income. Reliance in this regard can be placed on Hon'ble Karnataka High Court judgment in Charles D'Souza vs Commissioner Of Income-Tax, decided on 27 January, 1984 (1984) 40 CTR Kar 353, where Hon'ble High court has explained the scope of assessment as follows. "14. Assessment as defined in s. 2(8) of the Act includes reassessment. The word "assessment" has a comprehensive meaning in the Act and includes all steps and proceedings taken for determination of the tax payable and for imposing liability on the taxpayer. 15. Assessment under the Act is done under s. 143/144 and the total income is assessed and the tax payable is determined. Assessment may be made on the basis of the return subject to adjustment provided under the Act. The assessment is completed after due enquiry under sub-s.(3)." 8.1 Similarly Hon'ble Bombay High Court in The Commissioner Of Income-Tax vs Khemchand Ramdas (1938) 40 BOMLR 854 has held; "20. In order to answer them, it is essential to bear in mind the method prescribed by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny claimed as applicable. It was in fact duty of Ld AO to take the assessment to its logical end. As some of the information available with the return of income was considered to call for further information and same was relied to make assessment of income then not extending benefit of deduction of exempt income to assessee in regard to that income, would be against principles of natural justice and assessment cannot be said to be completed in accordance with law. 10. Accordingly the facts before the Ld. AO were different from those in Goetze (India) Ltd. vs. CIT [(supra) as in that case the return of income was filed on 30.11.1995 by the assessee for the assessment year 1995-96 and on 12.01.1998 a claim of deduction was made by way of letter which was disallowed by Ld. AO observing that there was no provision under the Act to make amendment in the return of income by modifying an application at the assessment stage without revising the return also. There was no case of a scrutiny assessment of the issue for which the assessee had furnished partial information and was seeking a deduction. Similarly in National Thermal Power Company Ltd. vs. CIT 229 ITR 383 infact the claim was mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordinate authority may have in the matter. There is no good reason to justify curtailment of the power of the Appellate Assistant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the Income-tax Officer. 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 Appellate Assistant Commissioner must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons, The Appellate Assistant Commissioner 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." (p. 386)" 12.1 Then explanation attached to Section 251 describing powers of Commissioner (Appeals) specifically provided that : "Explanation - In disposing of an appeal, the [***] [Commissioner (Appeals)] may consider and decide any matter arising out of the proceedings in which the order appealed against was passed, notwithstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer to entertain a claim for deduction otherwise than by filing a revised return. In the circumstances of the case, we dismiss the civil appeal. However, we make it clear that the issue in this case is limited to the power of the assessing authority and does not impinge on the power of the Income-tax Appellate Tribunal under section 254 of the Income tax Act, 1961. There shall be no order as to costs." [emphasis supplied] 23. It is clear to us that the Supreme Court did not hold anything contrary to what was held in the previous judgments to the effect that even if a claim is not made before the assessing officer, it can be made before the appellate authorities. The jurisdiction of the appellate authorities to entertain such a claim has not been negated by the Supreme Court in this judgment. In fact, the Supreme Court made it clear 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 Div ..... X X X X Extracts X X X X X X X X Extracts X X X X
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