Case Law Details
Addl. CIT Vs Mayur Batra (ITAT Delhi)
When the taxable income of the tax-payer has to be computed on the basis of partial information in Return and remaining on queries put by the Ld AO during assessment, then in the next place the sum payable by assessee, on the basis of such computation has to be determined and which certainly includes taking into consideration, if the income so assessed is exempt or subject to any deductions and only then a notice of demand in the prescribed form specifying the sum so payable can be served upon the taxpayer. In the case in hand, when Ld. AO has taking into consideration the information like cost of construction and other costs, provided by assessee to index the income and calculate the capital gains, then the Ld. AO could not have left the assessment half way by not inquiring into the deduction if any claimed as applicable. It was in fact duty of Ld AO to take the assessment to its logical end. As some of the information available with the return of income was considered to call for further information and same was relied to make assessment of income then not extending benefit of deduction of exempt income to assessee in regard to that income, would be against principles of natural justice and assessment cannot be said to be completed in accordance with law.
Accordingly the facts before the Ld. AO were different from those in Goetze (India) Ltd. vs. CIT [(supra) as in that case the return of income was filed on 30.11.1995 by the assessee for the assessment year 1995-96 and on 12.01.1998 a claim of deduction was made by way of letter which was disallowed by Ld. AO observing that there was no provision under the Act to make amendment in the return of income by modifying an application at the assessment stage without revising the return also. There was no case of a scrutiny assessment of the issue for which the assessee had furnished partial information and was seeking a deduction. Similarly in National Thermal Power Company Ltd. vs. CIT 229 ITR 383 infact the claim was made for the first time in appeal.
Even otherwise there is no error in the findings of ld. CIT(A) as he did not as such distinguish the case of assessee or the law laid down in Goetze India Ltd.(supra) but he only went ahead with further in accordance with law that even if the claim is not part of original return or the revised return, the same can be considered by appellate authorities while exercising appellate powers. In this regard even if by judgment of Hon’ble Supreme Court in Goetze India Ltd.(supra) is considered the same also recognizes the powers of appellate authority and the restriction if any was limited to the power of assessing authority.
Hon’ble Delhi High Court in the case of Jai Parabolic Springs Ltd. [2008] 172 Taxman 258 (Delhi), having considered judgment in National Thermal Power Company Ltd. and Goetze (India) Ltd. (supra) has held that there is no restrictions in the powers of Appellate Authorities to entertain an additional ground. Hon’ble Delhi High Court has referred to judgment of Hon’ble Supreme Court in Jute Corporation of India Ltd. vs. CIT (1991) 187 ITR 688.
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