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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: SHRI C.M.GARG & SHRI O.P.MEENAShri Rajesh Hasmukhlal Shah,
आदेश /O R D E R PER O. P. MEENA, ACCOUTANT MEMBER: 1. This appeal by the Assessee is directed against the order of learned Commissioner of Income tax (Appeals)-II, Surat (in short “the CIT (A)”) dated 12.12.2014 pertaining to Assessment Year 2011-12, which in turn has arisen from the order passed by the Income Tax Officer, Ward- 3(4) Surat (in short “the AO”) dated 10.02.2014 under section 150(1) of Income Tax Act,1961 (in short ‘the Act’). 2. Ground No. 1 and 2 states that Ld. CIT (A) erred in confirming the order of ITO ward 3(4) in denying the claim of
Rajesh Hasmukhlal Shah v. ITO 3(4) Surat /I.T.A. No. 517/Ahd/2015/A.Y.:11-12 Page 2 of 9 deduction of Rs.20,00,000 being investment made in NHAI Bonds eligible for deduction under section 54EC of the Act by overlooking the facts detailed submissions, and statement of facts submitted along with memorandum of appeal, explanation substantiated by documents and evidence placed in Paper Book.
Brief facts are that the assessee has furnished e–return on 03.08.2011 showing total taxable income at Rs. 89,210 under the head business income. However, while processing at CPC Bangalore, the income under the head capital gains was erroneously computed at Rs.19,62,238/- instead of Nil. Aggrieved by intimation under section 143(1), the assessee went in appeal before CIT (A). Ld. CIT (A) directed the Assessing Officer (AO) to verify the claim of deduction under section 54EC from income-tax return. However, while verifying return of income, the AO noted that the assessee himself has shown long-term capital gain of Rs.19,62,238/- under the head capital gains and he at his own calculated tax at Rs.4,31,975/- in his return of income. The AO, therefore, held that there is no mistake in processing of return. 4. Being aggrieved, the assessee filed an appeal before the ld. CIT (A). Ld. CIT (A) has called for records and found that the assessee has shown long-term capital gain of Rs.19,62,238/- in
Rajesh Hasmukhlal Shah v. ITO 3(4) Surat /I.T.A. No. 517/Ahd/2015/A.Y.:11-12 Page 3 of 9 Column 4(b)(c) of part- B of e-return and no claim of deduction under section 54EC has been made. Therefore, such claim not made in return of income cannot be accepted unless it is made by way of filing of revised return of income under section 139(5) of the Act. The AO had no power to entertain fresh claim made by the assessee after filing of return other than by filing of revised return. Thus, the claim of the assessee was denied.
Being, aggrieved the assessee filed this appeal before the Tribunal. The learned counsel for the assessee took us through ITR- V., and ITR-4 together with XML file of computation of income uploaded by tax consultant on 02.08.2011 (PB-15 to 36) and submitted that the appellant has claimed deduction under section 54EC towards investment made in NHAI Bonds for Rs.40,00,000/- and Rs.20,00,000/- within specified period of six months against long-term capital gain earned on sale of agricultural land. It was contended that this fact is very much evident for XML file of computation of income which has been uploaded in ITR-4 by the tax consultant on 02.08.2011 and this is the very reason that while uploading the XML file, even though there is an obvious and inadvertent computer software generated errors, the net tax
Rajesh Hasmukhlal Shah v. ITO 3(4) Surat /I.T.A. No. 517/Ahd/2015/A.Y.:11-12 Page 4 of 9 payable comes to Rs. 0. The learned counsel for the assessee, further, submitted that in spite of total income seen at Rs.20,51,448/-, in ITR-V, (PB-15 &37), the net tax payable is shown as at Rs. 0. The computation of income placed at Paper Book Page No. 35-36. The assessee has made claim of deduction under section 54EC at Rs.40,00,000/- invested on 19.02.2011 in NHAI Bonds and Rs.20,00,000/- invested in NHAI Bonds on 02.04.2011 and deduction under section 54F at Rs.14,21,191/- invested in purchase of flat and thus, long-term capital gain computed at Rs. 73,83,429 has been set-off against deduction of Rs.74,21,191/-. Accordingly, long-term capital gain computed at Rs. Nil and tax payable on Rs. 89,210 has been computed at Rs. Nil. The learned counsel for the assessee further, submitted that investment in NHAI Bonds of Rs. 40 Lakh was made on 19.02.2011 and Rs. 20 Lakh was made on 02.04.2011 which is supported by allotment of Bonds (appeal papers -30-34) and bank statement of Dena bank (Appeal papers 35-37). It was submitted that mismatch in XML file and ITR- 4 and online processing return of income under section 143(1) of the Act has been emerged only because of the software generated error. The CIT (A) vide order dated 21.03.2013 has directed the AO to verify these facts from income-tax return and make
Rajesh Hasmukhlal Shah v. ITO 3(4) Surat /I.T.A. No. 517/Ahd/2015/A.Y.:11-12 Page 5 of 9 necessary rectification. However, the AO did not follow the direction in its spirit and present CIT (A) has dismissed the appeal merely on the ground that the AO has no power to entertain fresh claim. It was contended that there was no failure on the part of the assessee to claim deduction as the claim is duly supported by XML file containing computation of income and making claim o deduction under section 54EC at Rs.60,00,000/- and investment in NHAI Bonds has been made well before filing of return of income on 02.08.2011. The learned counsel for the assessee place reliance in the case of CIT V. B. G. Shirke Construction Technology[2017] 79 taxmann.com 306 (Bombay) wherein it was held that even if claim made by the assessee does not form part of original return or even revised return, the Appellate Authorities including Tribunal have power to consider the claim supported by documentary evidence. Similarly Jurisdictional High Court of Gujarat in Pr. CIT v. UTI Bank Ltd. [Tax Appeal No. 382 to 384 of 2016 dtd. 13 June 2016] following its decision in the case of CIT v. Mitesh Impex [2014] 225 Taxman 168 (Mag) / 46 taxmann.com 30 (Guj) has decided that tribunal can entertain new claim even if revised return not filed.
Rajesh Hasmukhlal Shah v. ITO 3(4) Surat /I.T.A. No. 517/Ahd/2015/A.Y.:11-12 Page 6 of 9
Per contra, the ld. Sr. DR submitted that the assessee has himself shown long-term capital gain of Rs.19,62,238/-, hence, such fresh claim cannot be considered unless the assessee has made claim by way of filing of revised return under section 139(5) of the Act.
We have heard the rival submissions and perused the
relevant material on record. The perusal of XML file containing
computation of income (Appeal papers 28-29) from computerized
return filing software uploaded on e-filing portal of income-tax
Department for filing of return showed that the assessee has
claimed deduction of Rs.40 Lakh and Rs. 20 Lakh on account of
investment in NHAI Bonds under section 54EC of the Act and
Rs.14.21 Lakh under section 54F. The ITR-V being
acknowledgement of return dtd. 02.08.2011 also even though
showing total income at Rs. 20,51,448 but the same form shows
tax payable at Rs.0. If there had not been such claim of deduction
under section 54EC then, this acknowledgement should have
Rajesh Hasmukhlal Shah v. ITO 3(4) Surat /I.T.A. No. 517/Ahd/2015/A.Y.:11-12 Page 7 of 9
shown tax payable on returned income shown at Rs.4,31,975/- in
this ITR-V , which means that the assessee did make claim but due
to software generated error this claim is remained to be
considered in e- processing of return due to technical error or
software generated error in filing of e-return. The necessary
evidence filed by the assessee before Assessing Officer as well as
Ld. CIT (A) also evident the facts that the assessee has made
investment in NHAI Bonds for claiming deduction under section
54EC. We are of the view that the tax is leviable in accordance
with law as in force. The revenue cannot take advantage of
mistakes committed by the assessee. The tax cannot be collected
merely because of mistake in belief or due to error, the assessee
has failed offered or make such claim in the return or the assessee
has not filed the necessary claim of return of income properly. We
also find support from decision of Hon`ble Bombay High Court in
the case of Pruthvi Brokers & Shareholders Pvt. Ltd. (2012) 349
ITR 336 (Bom)/ 208 taxmann.com 498 (Bom) / 23 taxmann.com 23
Rajesh Hasmukhlal Shah v. ITO 3(4) Surat /I.T.A. No. 517/Ahd/2015/A.Y.:11-12 Page 8 of 9
(Bom) [ I.T.A. No. 3708 of 2010 Dated 21-06-2012] held that “An
assessee is entitled to raise before appellate authorities
additional grounds in terms of additional claims not made in
return filed by it. Similarly, the Hon`ble Bombay High Court in
the case of CIT V. B. G. Shirke Construction Technology [2017] 79
taxmann.com 306(Bombay) held that even if claim made by the
assessee does not form part of original return or even revised
return, the Appellate Authorities including Tribunal have power
to consider the claim supported by documentary evidence. Our
view is further, fortified with decision of Jurisdictional High Court
of Gujarat in Pr. CIT v. UTI Bank Ltd. [Tax Appeal No. 382 to 384
of 2016 dtd. 13 that June 2016] following its decision in the case
of CIT v. Mitesh Impex [2014] 225 Taxman 168 (Mag)/ 46
taxmann.com 30 (Guj) has decided that Tribunal can entertain
new claim even if revised return is not filed. In the light of above
facts and circumstances, we direct the AO to allow the claim of
the assessee of Rs. 20 Lakh made under section 54EC on account
Rajesh Hasmukhlal Shah v. ITO 3(4) Surat /I.T.A. No. 517/Ahd/2015/A.Y.:11-12 Page 9 of 9 of investment in NHAI Bonds. Accordingly, ground no. 1 and 2 of
appeal are allowed.
In the result, the appeal of the assessee is allowed.
The order pronounced in the open Court on 07.06.2018.
Sd/- Sd/- (सी.एम.गग�) /(C.M. GARG) (ओ.पी.मीना) /(O.P.MEENA) �याियक सद�य/JUDICIAL MEMBER लेखा सद�य/ ACCOUNTANT MEMBER सुरत/ Surat: �दनांक /Dated : 07June, 2018/opm Copy sent to- Assessee/AO/Pr. CIT/ CIT (A)/ ITAT (DR)/Guard file of ITAT. By order / / TRUE COPY / / Assistant Registrar, Surat