It has been observed that in many cases an assessee may wish to make a claim which was not made in the return of income filed under section 139. Where the assessee makes a claim of any expenditure or a deduction during the assessment proceedings which had not been made in the return of income filed the Assessing Officer does not entertain the claim.

The judicial interpretation in Goetze (India) Ltd. Vs. CIT (2006) 284 ITR 323 (SC) is that a fresh claim may be entertained by the appellate authorities but cannot be entertained by the Assessing Officer except by way of a revised return.

This interpretation has resulted in some practical difficulties and is perceived to go against the practice adopted by the income tax department itself. Taking a pragmatic and non-technical view, what is required to be determined is the taxable income of the assessee in accordance with the law. In this sense assessment proceedings are not adversarial in nature. It is therefore, proposed that the provision may be amended to provide an opportunity to the assessee to make a fresh claim during the assessment proceedings. However, such a claim should also be verified and any wrong claim made by the assessee should also be subject to penal provisions. The assessee should make a claim in a prescribed Form and verify that such a claim shall be deemed to have been made in the return of income filed by him.

2. It is therefore proposed that the following proviso be inserted under section 143(3):

“Provided that the Assessing Officer shall also take into consideration any claim for any exemption, deduction, set-off or any other relief made by the assessee in the prescribed Form and verified in the prescribed manner, which has been filed not later than thirty months from the end of the relevant previous year or before the completion of the assessment, whichever is earlier, and such claim shall be treated as having been made in the return of income for the purposes of this Act”.

Source- ​Draft Report of Justice R.V. Easwar (Retd) Committee to Simplify the provisions of Income-tax Act, 1961

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