DR. DANIEL DEVAPRASATH JEYASEKHARAN,SWAGATH vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE -1, TIRUNELVELI, TIRUNELVELI

The Assessee raised the following grounds of appeal : “1. The Commissioner of Income Tax Appeals went wrong in dismissing the appeal. 2. Commissioner of Income Tax Appeals ought to have accepted the claim of the assesse that his share of income from the trust should not taxed in his hand and as well as in the Trust also. 3. Commissioner of Income Tax Appeals ought to have deleted Rs. 19,19,456/- already assessed in the hands of the Trust. For these and other grounds which may be submitted at the time of personal hearing the appeal be allowed and render justice.” 3. Briefly the facts of the case are that the appellant is an Individual. He is one of the beneficiaries of a Private Trust namely Dr.Jeyasekharan Medical Trust. The Return of Income for the Assessment Year 2017-18 was filed on 13.10.2017 disclosing income of Rs.68,82,050/-, the same was revised on 23.10.2017, 24.03.2018 and 26.03.2018 respectively. Against the said return of income, the assessment was completed by the Assistant Commissioner of Income Tax, Circle-1, Nagercoil Range, Nagercoil (hereinafter called ‘AO’) vide order dated 20.12.2019 passed u/s.143(3) of the Income Tax Act, 1961 at a total income of Rs.68,82,050/-. While doing so, the Assessing Officer had not taken the cognizance of the revised return of income as the original return of income was not filed within the due date prescribed u/s.139(1) of the Act.

Being aggrieved, appellant filed before the ld.CIT(A) contending that share income received from private trust of Rs.19,19,486/- cannot be taxed again in the hands of the beneficiary. However, ld.CIT(A) confirmed the action of the Assessing Officer by holding that the appellant has not made any claim for exemption of income received from private trust in the return of income filed.

Being aggrieved, the appellant is in appeal before us in the present appeal. The ld.AR submitted that income cannot be taxed which is not liable to tax despite the fact that the appellant had offered tax wrongly in the return of income, as what can be taxed is only real income.

On the other hand, ld.Sr.DR vehemently opposed the above submission.

We heard rival submissions and perused the material available on record. We find from the material on record that the appellant had not filed the original return of income within the due date prescribed u/s.139(1) of the Income Tax Act. The appellant is one of the beneficiaries of private trust namely Dr.Jeyasekharan Medical Trust-the appellant had offered the share of income received from the said trust in the original return of income filed. However, the same was sought to be excluded by following revised return of income. However, the Assessing Officer had not taken cognizance of revised return of income since the original return of income was not filed within the due date prescribed u/s.139(1) of the Act. We do not find any illegality in the action of the Assessing Officer in not taking cognizance of revised returns of income. However, it is the duty of the Assessing Officer to compute the correct taxable income in the hands of the assessee in accordance with the provisions of Income Tax Act, 1961. It is well settled position of law merely an assessee offers income under wrong opinion that it is taxable. The Assessing Officer is duty bound to compute the correct taxable in accordance with provisions of the Act. Therefore, we are of the considered opinion that the Assessing Officer in error not considering the claim of the appellant on the merits. Therefore, the matter is restored to the file of Assessing Officer to decide the taxability of share of income received from the private trust on merits. We make it clear that we had not expressed any opinion on the merits of the claim made by the assessee. Accordingly, we restore the matter to the file of Assessing Officer for denovo assessment in accordance with law after affording an opportunity of being heard to the appellant.

In the result, appeal of the assessee is partly allowed for statistical purpose. Order pronounced in the open Court on 5th May, 2026.