INCOME TAX ACT, 1961

Section 250(1)

Appeal [CIT(A)] - Additional ground - CIT(A) rejected assessee's claim of deduction merely on the ground that for necessary relief assessee ought to have appealed against assessment order passed under section 143(3) and not in appeal against order seeking rectification under section 154 -

Assessee while filing return of income failed to claim deduction under section 80JJAA. It made claim of deduction before AO at the time of assessment proceedings AO while passing order under section 143(3) did not consider assessee's claim under section 80JJAA. In fact, there was no reference in the assessment order of assessee's claim of deduction lodged at the time of assessment proceedings. Thereafter, assessee filed rectification petition under section 154 for considering claim of deduction under section 80JJAA. The AO in proceedings under section 154 rejected assessee's claim on the ground of jurisdiction assessee filed appeal against the order passed under section 154 before CIT(A) who rejected assessee's claim of deduction merely on the ground that for necessary relief assessee ought to have appealed against assessment order passed under section 143(3) and not in appeal agianst order seeking rectification under section 154. Held: A perusal of assessment order revealed that AO had not made mention of assessee's claim of deduction in the assessment order, as claim was ostensibly received after passing of order. AO considered the claim of assessee in proceedings under section 154 and rejected the same on the ground of jurisdiction. The cause of action arose to assessee only when its claim was considered and rejected by AO. In the back drop of these facts, view of CIT(A) for rejecting assessee's claim of deduction at the outset by taken by CIT(A) pedantic and hyper-technical approach could not be upheld. As assessee failed to make claim of deduction under section 80JJAA in the return of income, AO was justified in rejecting assessee's claim, however, CIT(A) was not precluded from entertaining assessee's fresh claim not made in the return of income and assessee was entitled to raise before appellate authorities additional claims not made in the return of income. Taking into consideration entirety of facts assessee's claim of deduction under section 80JJAA deserved to be admitted for consideration and matter was restored to AO for adjudication.

Supported by:CIT. Central-I v. Pruthvi Brokers & Shareholders (P) Ltd. (2012) 349 ITR 233 (Bom) : 2012 TaxPub(DT) 2671 (Bom-HC).

REFERRED : Goetze (India) Limited v. CIT (2006) 284 ITR 323(SC) : 2006 TaxPub(DT) 1528 (SC).

FAVOUR : In assessee's favour.

A.Y. : 2011-12

INCOME TAX ACT, 1961

Rule 34(5)(c)

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