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TMI Blog2022 (7) TMI 1489X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee while filing his return of income for assessment year 2014-15 offered Long Term Capital Gains ('LTCG' for short) of Rs.1.346 crores. The return of assessee was processed under section 143(1) by Central Processing Centre (CPC) Bengaluru and was accepted. The assessee thereafter filed on-line application under section 154 for rectification of assessment order before CPC, Bengaluru. The application of assessee was transferred to ACIT / Assessing Officer. In the application for rectification, the assessee contended that in the return of income, the assessee has shown LTCG on sale of agricultural land. The said agricultural land is situated outside the Municipal limit having population of less than 10,000. The assessee furnished the certificate of Talati and claimed that he was not liable to pay tax on capital gains as the land / asset sold by him was an agricultural land. The application of assessee was not accepted by Assessing Officer by holding that no prima facie adjustment can be made nor any addition of income can be made by Assessing Officer during the processing of return under section 143(1) of the Act. Further, the Assessing Officer cannot go beyond the return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not a capital asset within the meaning of Section 2(14) of the Act. 3. The Ld. AR for the assessee submits that Central Board of Direct Tax (CBDT) in its Circular No.14(XL-35) dated 11.04.1955 clarified that it is the duty of Assessing Officer not to take advantage of ignorance of an assessee as to his rights rather their duties to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs and in this regard and 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 which would inspire confidence the benefit the department to inspire the general public / taxpayer. The Ld. AR for the assessee by referring the para -6 of the said Circular, he submits that intention of this circular is not that due should not be charged or that any favour should be shown to anybody in the matter of assessment / or that where investigation are called for, they should not be made. Whatever the legitimate tax, it must be assessed and must be collected. The purpose of the Circular is merely to emphasise that the officer should not take advantage of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st the column "whether the Trust is registered under section 12A/12AA?" The return of income was processed under section 143(1) and the exemption available to the trust was withdrawn and demand was created. The assessee filed rectification application or e-portal of CPC, Bengaluru to rectify the order. The application of assessee was rejected and the action of Assessing Officer. The order of assessing officer was upheld by Ld. CIT(A). However, on further appeal before Tribunal the matter was restored back for afresh adjudication of application on merit and as per due process of law. The Ld. AR for the assessee submits that he has a limited prayer that the application of assessee under section 154 of the Act, for rectification of mistake may be restored to the file of Assessing Officer to adjudicate the same on merit on the fresh claim raised by assessee. The assessee may be granted liberty to prove his case as the assessee is not liable to pay tax on LTCG as the same is exempted. To support his contention, all submission, Ld. AR for the assessee relied upon the following decisions: * CBDT Circular No.14(XL-35) Dated 11.04.1955 * CIT vs. Ahmedabad Keiser-E-Hind Mills Co. Ltd. (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... griculture land is not falls under the definition of capital asset. The said application of assessee was dismissed by Assessing Officer by holding that in the order under section 143(1) no prima facie adjustment can be made nor any levy of additional income can be made by the Assessing Officer. The Assessing Officer cannot visit beyond that return except to compute tax or interest after adjustment of prepaid taxes. The Assessing Officer have no power to disturb the income disclosed in the return of income. And the assessee has failed to furnish any revised return, after taking into consideration all the facts of the case. The Ld. CIT(A) confirmed the action of Assessing Officer with the observation that the "mistake is by the appellant in computation of income". 9. Now before us, the Ld. AR for the assessee vehemently relying upon the CBDT Circular No.14(XL-35) dated 11.04.1955 and submitted that though the assessee committed mistake which was realized later on, however, it was the duty of officer of the Department not to take the advantage of ignorance of as about his right. The Ld. AR for the assessee submits that the CBDT's Circular dated 11.04.1955 has not been withdrawn till ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this restriction is not impinge on the power of Tribunal under section 254. Further Hon'ble jurisdictional High Court in the case of CIT vs Mitesh Impex 367 ITR 85 (Guj), Hon'ble Bombay High Court in the case of CIT Vs Pruthvi Broker & Shareholders Pvt. Ltd. 349 ITR 236 (Bom), Hon'ble Delhi High Court in the case of CIT Vs Sam Global Securities Ltd. (2013) 360 ITR 682 (Delhi), wherein it was held that Ld. CIT(A) as well as Tribunal have jurisdiction to consider additional claim. It was also held that such claims need not be those which became available on account of change of circumstances of law but which were even available when return of income was filed. (emphasis added by us). 13. As we have admitted such claim, thus, the issue is restore back to the file of assessing officer to adjudicate the same in accordance with law. The Assessing Officer to examine the fact that whether the LTCG earned on sale of such agricultural land, is exempt or not as the assessee claimed that the agriculture land sold by the assessee does not fall within the definition of asset as define section 2(14) of the Act. 14. In the result, the appeal of the assessee is allowed for statistical ..... X X X X Extracts X X X X X X X X Extracts X X X X
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