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Income Tax Appellate Tribunal, MUMBAI BENCH “D” MUMBAI
Before: SHRI D.T. GARASIA & SHRI N.K. PRADHAN
ORDER PER N.K. PRADHAN, A.M. This is an appeal filed by the Revenue. The relevant assessment year is 2008-09. The appeal is directed against the order of the Commissioner of Income Tax (Appeals)-12, Mumbai and arises out of the assessment completed u/s 154 of the Income Tax Act 1961, (the ‘Act’). 2. The grounds raised by the Revenue in this appeal are (i) the Ld. CIT(A) erred in allowing assessee’s appeal without considering the decision in case of Goetze (India) Ltd and Pruthvi Brokers & Shareholders M/s Domex Technical Information Pvt. Ltd. (P) Ltd., both holding that the assessing officer cannot entertain such claims which were not made in original or revised return, (ii) the Ld. CIT(A) erred in allowing assessee’s appeal relying on the decision of Pruthvi Brokers & Shareholders (P) Ltd. holding that appellate authority is empowered to entertain fresh claim not made in return of income and (iii) the Ld. CIT(A) erred in not giving opportunity to AO under rule 46A.
3. Briefly stated, the facts of the case are that the assessee filed its return of income for the A.Y. 2008-09 on 13.08.2008 showing total income of Rs. 95,16,800/- . It had disclosed Rs.44,29,039/- as its dividend income claiming the same as exempt u/s 10 in Schedule E1. However, the same amount was wrongly shown as gross dividend in Schedule OS under the head ‘income from other sources’. The assessee had shown the above income of Rs.44,29,039/- in its return of income. The Ld. CIT(A) observed that this being the first year of the assessee filing its return of income electronically, a software glitch and a bona fide error has crept in. The AO has passed an order u/s 154 stating that the error cannot be rectified in view of the decision of the Hon’ble Supreme Court in the case of Goetz India. The Ld. CIT(A) following the decision of the Hon’ble Bombay High Court in Pruthvi Brokers & Shareholders (P) Ltd held that (i) the dividend income of Rs.44,29,039/- from equity oriented mutual fund is exempt u/s 10, (ii) Long Term Capital Gain (LTCG) of Rs.11,05,867/- is exempt u/s 10 and (iii) Short Terms Capital Gains of Rs.36,26,444/- is taxable at concessional rate of 10%.
M/s Domex Technical Information Pvt. Ltd. The Ld. CIT(A) following the Circular No. 14 issued by CBDT directed the AO to pass an order accordingly.
We have heard the rival submissions and perused the relevant materials on record. Now we advert to the decision relied on by the learned DR. In Goetze (India) Ltd. vs CIT (2006) 157 Taxman 1 (SC), it has been held that the assessee cannot amend a return filed by him before the AO for making a claim for deduction other than by filing a revised return. In CIT vs. Pruthvi Brokers & Shareholders (P) Ltd. (2012) 349 ITR 336 (Bom), relied on by the Ld. counsel of the assessee, the Hon’ble Bombay High Court held : “Thus, it is clear that the Supreme Court did not hold anything contrary to what was held in the previous judgements to the effect that even if a claim is not made before the Assessing Officer, it can be made before the appellate authorities. The jurisdiction of the appellate authorities to entertain such a claim has not been negated by the Supreme Court in this judgement. In fact the Supreme Court made it clear that the issue in the case was limited to the power of the assessing authority and that the judgement does not impinge on the power of the Tribunal under section 254.’’ 5. Thus the Ld. CIT(A) has rightly admitted such a claim of the assessee.
However, as per Rule 46A(3) of Income Tax Rules 1962, the Ld. CIT(A) should have given a reasonable opportunity to the AO to examine the relevant evidence/document. She has forgotten to do so.
M/s Domex Technical Information Pvt. Ltd.