Case Law Details
Navneet Dutta Vs ACIT (ITAT Delhi)
The case of Navneet Dutta Vs ACIT was heard by the Income Tax Appellate Tribunal (ITAT) Delhi. The assessee filed an appeal against the disallowance of loss from house property and the rejection of the rectification application under Section 154 of the Income Tax Act. The ITAT allowed the rectification in the revised return, even though the original return was filed late. The issue was remitted to the Assessing Officer to consider the revised return and make an order in accordance with the law. This article provides an analysis of the case and its implications.
Analysis: The assessee filed a rectification application under Section 154 of the Income Tax Act, seeking to claim a loss from house property that was inadvertently not claimed in the original return. The assessee had filed a revised return to rectify the mistake, but the authorities rejected the claim, stating that it should have been made in the original return.
The ITAT noted that the only issue in this case was the inadvertent claim of lesser interest on a house property loan. The assessee attempted to rectify the mistake by filing a revised return. However, the authorities held that the claim could not be revised under Section 154 of the Act since it was not made in the original return.
In the interest of substantial justice, the ITAT referred to the decision of the Supreme Court in the case of Goetze (India) Ltd. vs. CIT and held that the powers of the ITAT to admit the claim otherwise than by a revised return were not impinged. Therefore, the ITAT allowed the rectification in the revised return and remitted the issue to the Assessing Officer to consider the revised return and make an order in accordance with the law.
Conclusion: The ITAT Delhi, in the case of Navneet Dutta Vs ACIT, allowed the rectification in the revised return, despite the late filing of the original return. The ITAT referred to the powers of the ITAT to admit the claim and remitted the issue to the Assessing Officer for further consideration. This case highlights the importance of rectification provisions in correcting inadvertent errors in tax returns and the role of the ITAT in ensuring substantial justice is served.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is directed against the order of ld. CIT (Appeals)-21, New Delhi dated 31.01.2018 pertaining to the Assessment Year 2011-12.
2. The grounds of appeal taken by the assessee read as under :-
“1. The Ld. Assessing Officer CPC, has erred in law and on facts in making of disallowance of claim of Loss from House Property u/s 24 of Income Tax Act, 1961 of Rs.6,44,732/- and restricting the same to Rs. 1,50,00/- on account of consideration of property as a self occupied property.
The Ld. Assessing Officer Circle 67(1), has further failed to appreciate the correct claim of Loss from House Property u/s 24 of Income Tax Act, 1961 of Rs.6,44,732/- with considering the merits and documentary evidence of Income from House Property, thereby refusing rectification U/s 154 of the Income Tax Act, 1961, without any speaking orders.
The Ld. AO and Ld. CIT (A) both failed to ascertain the correct Income from House Property and only restricting the loss u/s 24 to the tune of Rs.1,50,000/- resulting in incorrect assessment on account of rental received by the assessee which was also declared as per Revised Income Tax Return.
Further the CIT (A) has further failed to appreciate that due to typographical error the Claim of Loss from House Property was restricted to Rs.1,50,000/- as in case of Self Occupied Property and further ignored that the Tax Computation made by the assessee was on account of the said claim of loss.
That the CIT (A) and AO both have failed to appreciate that due to typographical error the Claim of Loss from House Property was restricted to Rs.1,50,000/- as in case of Self Occupied Property and further ignored that the Tax Computation made by the assessee was on account of the said claim of loss.
The order of the CIT (A) and AO are bad in law and against the facts of the case.”
In this case, an order under section 154 of the Income-tax Act, 1961 (for short ‘the Act’) was passed by the AO which reads as under:-
“ The assessee has filed rectification application u/s 154 for the A.Y. 2011-12 on dated 12.02.2016, 21,04.2016 and 11.07.2016 submitting following points respectively :-
That the assessee filed his original return of income on 01.2012 declaring total income of Rs.40,22,587/-. In the said return due to clerical/typographical error, the assessee could not claim loss from house property.
Later on the assessee revised the return of income on 18.06.2012 declaring total income at Rs.36,87,455/- claiming loss from house property to the tune of Rs.4,85,132/- which resulted in refund of Rs.92,767.
On receipts of rectification applications, the record and details was duly perused & found that in the original return, which was filed after the due date of filing ITR i.e. on 10.01.2012, the assessee has not claimed loss from house property. Since the original returns was filed after the due date so the same cannot be revised. Hence, the loss from house property claimed in revised return is not tenable.”
Against the above order, assessee filed appeal before the ld. CIT (A). Ld. CIT (A) also rejected the assessee’s appeal on the ground that this revised claim should have been made by a proper return of income. Since it has not been done, he sustained the order of AO.
Upon careful consideration, we note that the only issue in this case is that assessee has inadvertently claimed lesser interest on house property loan. Assessee tried to rectify the mistake when he discovered the same by filing revised return but the same was not entertained by the authorities below and held that such claim cannot be revised u/s 154 of the Act as it was not made in the timely return of income filed. We note that Hon’ble Supreme Court in case of Goetze (India) ltd. vs. CIT 157 com 1 (SC) has held that their order in that case would not impinge upon the powers of the ITAT to admit the claim otherwise than by revised return. Hence, in the interest of substantial justice, this claim is admitted and we remit the issue to the file of AO to consider the revised return and pass an order in accordance with law.
In the result, this appeal filed by the assessee stands allowed for statistical purposes.
Order pronounced in the open court on this 12th day of April, 2023.
