M/S AGNUS HOLDINGS PVT LTD ,BANGALORE vs. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-1(1)(1), BANGALORE

The appeal filed by the assessee is directed against the order dated 19-01-2017 passed by Ld CIT(A)-1, Bangalore and it relates to the assessment year 2012-13. The assessee is aggrieved by the decision of Ld CIT(A) in rejecting the ground raised by the assessee in respect of disallowance made u/s 14A of the Act.

We heard the parties and perused the record. The assessee, initially, disallowed a sum of Rs.1,92,86,469/- u/s 14A of the Act. Later, it was noticed by the assessee that the above said disallowance was computed erroneously by considering certain items of investments, which should not be considered for computing average value of investments. Some of the items mentioned in the order of Ld CIT(A) were convertible debentures, share application money and National Savings certificate. Hence the assessee re-computed the disallowance u/s 14A at Rs.1,18,27,082/- and requested the AO to adopt the same by filing a letter before the AO. However, the assessing officer did not consider the said letter. The Ld CIT(A) confirmed the order of the AO by observing that the assessee itself has worked out the disallowance at Rs.192.86 lakhs. Aggrieved, the assessee has filed this appeal.

We notice that the assessee has noticed the errors before the completion of assessment proceeding and hence it has furnished revised computation of disallowance u/s 14A through a letter. However, the AO did not consider the same. Normally the mistakes committed in filing return of income are to be corrected only by filing revised return of income as held by Hon’ble Supreme Court in the case of Goetz India Ltd (284 ITR 323). However, the Hon’ble Supreme Court has also held in the above said case, that its order does not impinge the power of the Tribunal.

We notice that the mistakes/errors pointed out by the assessee are genuine one. It is well settled proposition of law that there is no estoppel against law. Hence, we are of the view that the claim of the assessee should be admitted. Accordingly, we are of the view that the Ld CIT(A) was not justified in rejecting the plea of the assessee on the reasoning that the assessee itself has disallowed a sum of Rs.192.86 lakhs u/s 14A of the Act. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to examine the revised computation filed the assessee for disallowance to be made u/s 14A of the Act. After affording adequate opportunity of being heard to the assessee, the AO may take appropriate decision.

In the result, the appeal filed by the assessee is treated as allowed for statistical purposes.