PR. COMMISSIONER OF INCOME TAX-6 vs. UMABEN SEETHARAM GANNAVARAM

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TAXAP/665/2018HC GujaratGJHC24035697201826 June 2018Bench: HONOURABLE MR. JUSTICE M.R. SHAH,HONOURABLE MR. JUSTICE A.Y. KOGJE3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the learned Tribunal had not committed any error in allowing the deduction under Section 10AA. The reasoning was based on the facts that similar deductions were allowed for previous and subsequent assessment years, and in the year under consideration, the omission to claim the deduction in the original return was due to a technical mistake, possibly related to newly launched e-filing software. The deduction was immediately claimed via a rectification application under Section 154, which was allowed. The Court noted that it was not the Revenue's case that the assessee was not entitled to the deduction. Therefore, no substantial question of law arose, and the appeal was dismissed. The ratio is that a deduction under Section 10AA, if otherwise eligible, can be claimed through a Section 154 rectification application if the omission in the original return was due to a technical error, especially when the assessee is otherwise entitled to it and similar claims were allowed in other years.

What were the facts?

The Revenue is in appeal against an order of the Income Tax Appellate Tribunal (ITAT) for Assessment Year 2008-2009. The ITAT had dismissed the Revenue's appeal, upholding the deduction allowed by the CIT (Appeals) under Section 10AA of the Income Tax Act, 1961. The assessee, Umaben Seetharam Gannavaram, had initially not claimed the deduction in its return filed under Section 139(1). However, a deduction under Section 10AA was claimed via a rectification application under Section 154 of the Act, which was allowed. Similar deductions were allowed for previous and subsequent assessment years. The Revenue's grievance is that the deduction should have been claimed by filing a revised return, not through a Section 154 application.

What were the issues?

1. Whether the Appellate Tribunal has erred in law while allowing deduction under Section 10AA of the Income Tax Act, 1961, through filing an application under Section 154 of the Act, when the claim ought to have been made by filing a revised return of income, as the claim was not originally made in the return filed under Section 139(1)? Assessee's contentions: The judgment does not record any specific contentions made by the assessee before the High Court. However, the ITAT and CIT (Appeals) had allowed the deduction. Revenue's contentions: The Revenue argued that the deduction under Section 10AA could only be claimed by filing a revised return of income, as it was not originally claimed in the return filed under Section 139(1). They contended that a rectification application under Section 154 was not the appropriate procedure for claiming a deduction that was not originally made.

Which sections of the Income-tax Act were involved?

Section 10AA,Section 154,Section 139(1)

AI-generated summary — verify with the full judgment below

C/TAXAP/665/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 665 of 2018 ================================================================ PR. COMMISSIONER OF INCOME TAX-6 Versus UMABEN SEETHARAM GANNAVARAM ================================================================ Appearance: MRS MAUNA M BHATT(174) for the PETITIONER(s) No. 1 for the RESPONDENT(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE A.Y. KOGJE

Date : 26/06/2018

ORAL ORDER (PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1. Feeling aggrieved and dissatisfied by the impugned judgment and order passed by the learned Income Tax Appellate Tribunal (ITAT), Ahmedabad “B” Bench, Ahmedabad passed in ITA No.3414/Ahd/2015 for the Assessment Year 2008-2009, by which the learned Tribunal has dismissed the Appeal preferred by the Revenue allowing the deduction by the learned CIT (Appeals), under Section 10AA of the Income Tax Act, 1961, the Revenue has preferred the present Tax Appeal with the following proposed question of law :- Page 1 of 3

C/TAXAP/665/2018 ORDER “Whether the Appellate Tribunal has erred in law while allowing deduction u/s. 10AA through filing application u/s. 154 of the Act, whereas the claim ought to have been made by filing revised return of income, when the claim was not originally made in the return of income filed u/s. 139(1)?” 2. We have heard learned Advocate Mrs. Mauna M. Bhatt appearing on behalf of the appellant – Revenue and have considered the impugned judgment and order passed by the ITAT as well as CIT (Appeals). 3. At the outset, it is required to be noted that in the present Tax Appeal and as observed by the ITAT and the learned Tribunal, a similar deduction under Section 10AA of the Act was allowed in favour of the assessee for the previous Assessment Year and also for the subsequent Assessment Year. However, in the year under consideration, due to a technical mistake, more particularly, on account of newly launched software of e- filing, a mistake had occurred in claiming the deduction under Section 10AA of the Act. However, immediately the deduction was claimed by way of a rectification application under Section 154 of the Act, which was allowed. Page 2 of 3

C/TAXAP/665/2018 ORDER 4. Considering the aforesaid facts and circumstances, more particularly, when it is not the case of the Revenue that the Assessee was not entitled to deduction under Section 10AA of the Act, it cannot be said that the learned Tribunal has committed any error. No substantial question of law arises in the present Appeal and therefore, the present Appeal deserves to be dismissed and is accordingly dismissed. Sd/- (M.R. SHAH, J) Sd/- (A.Y. KOGJE, J) CAROLINE Page 3 of 3

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