Case Law Details

Case Name : Madhabi Nag Vs ACIT (ITAT Kolkata)
Appeal Number : ITA No.512/Kol/2015
Date of Judgement/Order : 09/12/2015
Related Assessment Year : 2008-09
Courts : All ITAT (1730) ITAT Kolkata (111)

CA Prarthana Jalan

Hon’ble Kolkata ITAT has in its judgement of Madhabi Nag v/s ACIT has placed reliance on The CBDT Circular No.14 of 1955 dated 11.04.1955 and has taken a view that the officers of the department must not take advantage of ignorance of the assessee about his rights and it is their duty to assist the tax payer in every reasonable way particularly in the matter of claiming and securing reliefs.

Brief facts of the case were that The assessee for the A.Y.2005-06  had filed the return of income declaring Long Term Capital Gain on sale of shares of Rs.12,32,025/-. The AO issued an intimation u/s 143(1) of the Income Tax Act, 1961 (Act) dated 03.02.2010 accepting the income returned by the assessee.
The assessee filed an application u/s.154 of the Act before AO pointing out that the Long Term Capital Gain on sales of shares was wrongly offered to tax and that the same was exempted u/s 10(38) of the Act. The assessee prayed that apparent error u/s 10(38) of the Act be rectified. The AO, however, did not accept the contention of the assessee and neither was it accepted by the Ld CIT(A) on the pretext that no revise return was filed. Whereas the Hon’ble ITAT has held that the department cannot take the benefit of the ignorance of the assessee and should help the taxpayer for claiming and securing reliefs.
The operational part of the Hon’ble ITAT verdict is as under:
“I have heard the rival submissions. The CBDT Circular No.14 of 1955 dated 11.04.1955 has taken a view that the officers of the department must not take advantage of ignorance of the assessee about his rights and it is their duty to assist the tax payer in every reasonable way particularly in the matter of  claiming and securing reliefs. In my view therefore the revenue authorities ought not to have rejected the application u/s 154 of the Act on the ground that the assessee has not filed the revised return of income. The CIT(A) has placed reliance on the decision of the Hon’ble supreme Court in the case of Goetz (India) Ltd. (supra) for sustaining the order of the AO u/s 154 of the Act. The Hon’ble Supreme Court in it’s decision rendered in the case of Goetze (India) Ltd vs CIT has clarified that the appellate authorities under the Act have the power to consider the claim even if the business of the revised return of income. In my view, therefore, the claim of the assessee that Long Term Capital Gain is exempt u/s 10(38) of the Act has to be examined by the AO. It is seen from  the order of AO u/s 154 of the Act that the AO wanted details of acquisition and proof of payment of STT. I therefore set aside the order of CIT(A) and remand the question of exemption of Long Term Capital Gain u/s 10(38) of the Act to the AO for fresh consideration. The assessee is directed to file necessary evidences before the AO to substantiate his claim.”

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Category : Income Tax (20862)
Type : Judiciary (8910)