INCOME TAX ACT, 1961

Section 254

Appeal (Tribunal) - Order - Raising of new claim before ITAT -

Assessee-firm made a claim before AO, to rectify the mistake committed while computing long-term capital gain from sale of land by way of revised calculation. However, the AO denied the assessee's claim. Before CIT(A), the assessee made detailed submission stating that such new claim could be considered by appellate authorities. However, the CIT(A) also upheld the action of the AO. He alleged that as the assessee had not filed its return on or before the due date prescribed under section 139(1), thus, it was precluded from filing a revised return under section 139(5) and therefore, it could not make claim for rectification of error committed, in the course of assessment proceedings or in the appellate proceedings. Held: It is settled position of law that even if a claim is not made before AO, it can be made before appellate authorities and further, the legal position that 'deduction not made in original return could not be entertained by the AO, otherwise than by filing a revised return of income' is limited to the power of the AO and the same does not impinge on the power of Tribunal under section 254. Accordingly, the matter was remanded to the AO for considering the claim of the assessee.

Followed:Goetze (India) Limited v. CIT (2006) 284 ITR 323 (SC) : 2006 TaxPub(DT) 1528 (SC) and CIT, Central-I v. Pruthvi Brokers & Shareholders Pvt. Ltd. (2012) 349 ITR 336 (Bom-HC) : 2012 TaxPub(DT) 2671 (Bom-HC).