Commissioner Of Income Tax,Chennai v. M/S. Perlo Telecommunication And Electronic Components India P Ltd.,Special Electronic Zone,Sipcot Indl. Park

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMAND THE HONOURABLE MR.JUSTICE SATHI KUMAR SUKUMARA KURUP T.C.A.NO.413 OF 2014 Commissioner of Income Tax,Chennai... Appellant/Respondent -vs- M/s. Perlo Telecommunication and Electronic Components India P Ltd.,Special Electronic Zone,SIPCOT Indl. Park, Phase III, Sriperumbudur,Chennai – 602 105... Respondent/Appellant Appeal filed under Section 260-A of the Income Tax Act,1961, as against the order of the Income Tax Appellate Tribunal,Madras 'A' Bench, dated 18.11.2013 in I.T.A. No. 1037/Mds/2013for the assessment year 2008-2009, against the order of theCommissioner of Income Tax (appeals)-V, Chennai dated 28.02.2013in I.T.A. No. 327/2011-2012 pertaining to assessment year 2008-2009 against the order of the Assistant Commissioner of IncomeTax, Company circle V(1) Chennai-34 dated 23.12.2011 inPan No/GIR No.AADCP9246K. (Delivered by T.S.Sivagnanam, J.) This appeal filed by the Revenue under Section 260-A of theIncome Tax Act, 1961 is directed against the order dated18.11.2013 passed by the Income Tax Appellate Tribunal, Madras'A' Bench (the Tribunal) in ITA. No.1037/Mds/2013 for theassessment year 2008-09. 2.We have heard Mr. T.Ravi Kumar, Learned Senior StandingCounsel appearing for the appellant-Revenue. Though the Assesseehas been served and their name has also been printed in the https://hcservices.ecourts.gov.in/hcservices/ cause list, none appeared on behalf of the assessee. 3.This appeal had been filed by the Revenue raising thefollowing substantial questions of law :- 1.Whether under the facts and circumstances of the case,the Income Tax Appellate Tribunal was right in holdingthat assessing officer should have considered rectifiedcomputation of income submitted the assessee during thecourse of assessment proceedings and allowed the claimfor deduction expenditure made through such revisedcomputation and not through a revised return of income?2.Whether under the facts and circumstances of the case,the Income Tax Appellate Tribunal was right in holdingthat the assessee did not claim additional deduction orexemption or made a fresh claim for deduction, byfiling a revised computation and claiming deductionunder section 37(1)? 4.The short issue, which travelled up to the Tribunal, waswhether the claim of loss made by the assessee, as against theoriginal loss claimed in the original return could have beenentertained by the Assessing Officer. Admittedly, no revisedreturn of income was filed by the assessee, but, when the casewas discussed, while taking up the scrutiny assessment, theassessee filed a revised computation of income and claimedfurther loss. This was denied by the Assessing Officer byplacing reliance on the decision of the Hon'ble Supreme Court inGoetze India Limited Vs. CIT reported in [284 ITR 323 (SC)]. Theassessee carried the matter in appeal to the Commissioner ofIncome Tax(Appeals)-V(CIT), Chennai, who by order dated28.02.2013 dismissed the appeal. Aggrieved by the same, theassessee has approached the Tribunal, which allowed assessee'sappeal. 5.Mr. T.Ravi Kumar, Learned Senior Standing Counsel is rightin sofar as the effect of the decision of the Hon'ble SupremeCourt in Goetze India Limited Vs. CIT reported in [284 ITR 323(SC)]. In no uncertain terms, it has been that the claim for thededuction not made in the original return cannot be entertainedby the Assessing Officer otherwise than by filing a revisedreturn of income. 6.We note that the paragraph 4 of the judgment of the Hon'bleSupreme Court made it clear that the issue in the said case(Goetze India Limited Vs. CIT) is limited to the power of theAssessing Officer and does not impinge on the power of theIncome-Tax Appellate Tribunal under Section 254 of the Act. 5.Mr. T.Ravi Kumar, Learned Senior Standing Counsel is rightin sofar as the effect of the decision of the Hon'ble SupremeCourt in Goetze India Limited Vs. CIT reported in [284 ITR 323(SC)]. In no uncertain terms, it has been that the claim for thededuction not made in the original return cannot be entertainedby the Assessing Officer otherwise than by filing a revisedreturn of income. 6.We note that the paragraph 4 of the judgment of the Hon'bleSupreme Court made it clear that the issue in the said case(Goetze India Limited Vs. CIT) is limited to the power of theAssessing Officer and does not impinge on the power of theIncome-Tax Appellate Tribunal under Section 254 of the Act. 7.For the same proposition, the Learned Senior StandingCounsel appearing for the Revenue placed reliance on thedecision in Commissioner of Income Tax(CIT) -vs- Jai ParabolicSprings Ltd reported in [2008] 306 ITR 42 (Delhi) and Nagarajand Co. (P.) Ltd. -vs- Assistant Commissioner of Income Tax,Circle-IV(4), Chennai, reported in [2020] 425 ITR 421 (Madras). 8.In fact, the Tribunal took note of these decisions and hadplaced reliance on the decision in Commissioner of Income TaxVs. Pruthvi Brokers & Shareholders Pvt. Ltd., reported in [2012]349 ITR 336 (Bombay) and noted that even if a claim is not madebefore the Assessing Officer, it can be made before theappellate authorities and the jurisdiction of the appellateauthorities to entertain such a claim has not been negated bythe Hon''ble Supreme Court in Goetze India Limited Vs. CIT andin fact, the Supreme Court made it clear that the issue in thesaid case was limited to the power of the assessing authorityand that the judgment does not impinge on the power of theTribunal under Section 254 of the Act. 9.Thus, the power of the Tribunal cannot be curtailed, basedupon the dictum of the Hon'ble Supreme Court in Goetze IndiaLimited Vs. CIT. After noting this legal position, theexamination is as to whether the Tribunal has recorded a factualfinding that claim made by the assessee, when the case wasdiscussed by the Assessing Officer during the scrutinyassessment by filing a computation, which is not a fresh claim.Further, the Tribunal held that the assessee is only claimingexpenditure, which was left out at the time of filing oforiginal income tax return and in any event, the AssessingOfficer has power to make upward or downward adjustments in theincome returned filed by the assessee and when the assessee hadnot claimed certain expenditures clearly evident from therecords and it comes to the knowledge of the Assessing Officerat the time of assessment proceedings, the Assessing Officershould grant relief to the assessee. 10.The Tribunal took note of the Circular issued by CBDT dated11.04.1955, wherein the Board ordered that the officers of theIncome Tax should not take advantage of ignorance of an assesseeas to his rights. It is one of their duties to assist thetaxpayers in every reasonable way, particularly in the matter ofclaiming and securing reliefs and in this regard, the officershould take the initiative in guiding a taxpayer, whereproceedings or other particulars before them indicate that somerefund or relief is due to him.11.Further, the Circular states that department should freelyadvise the assessee, when approached by them as to their rightsand liabilities and as to the procedure to be adopted forclaiming refunds and reliefs. It may be true that the Circular 10.The Tribunal took note of the Circular issued by CBDT dated11.04.1955, wherein the Board ordered that the officers of theIncome Tax should not take advantage of ignorance of an assesseeas to his rights. It is one of their duties to assist thetaxpayers in every reasonable way, particularly in the matter ofclaiming and securing reliefs and in this regard, the officershould take the initiative in guiding a taxpayer, whereproceedings or other particulars before them indicate that somerefund or relief is due to him.11.Further, the Circular states that department should freelyadvise the assessee, when approached by them as to their rightsand liabilities and as to the procedure to be adopted forclaiming refunds and reliefs. It may be true that the Circular is of the year 1955. Nevertheless, as per the recentnotification issued by the Income Tax Department as to how thedepartment has to approach the assessee, the Board has beenconsistent to state that the department should adopt an assesseefriendly approach. In any event, on facts, the Tribunal wasconvinced that the claim made by the assessee towardsexpenditure was not a fresh claim. Therefore, the Tribunal hadexercised its powers conferred under Section 254 of the Act,which cannot be found fault with. 12.We find from the penaltimate paragraph of the order passedby the Tribunal dated 18.11.2013 that the assessee's appeal hasbeen allowed and but no consequential direction was issued tothe Assessing Officer, which was required to be done. This isbecause the Assessing Officer non suited the assessee on atechnical ground that such a claim for expenditure cannot beentertained, without filing a revised return.13.The Tribunal having held that the claim is not a fresh claimand the computation given by the assessee can be considered,necessarily the matter has to go back to the Assessing Officerto consider the claim on merits. Since the Tribunal has notissued consequential direction, we are inclined to do so. 14.In the result, the Tax Case Appeal is dismissed and thesubstantial questions of law are answered as against the Revenueand the matter is remanded to the Assessing Officer to considerthe assessee's claim of expenditure on merits and in accordancewith law, after affording opportunity of personal hearing to theassessee, because the assessment is of the year 2008-09. Nocosts. Sd/- Assistant Registrar(CS III) //True Copy// Sub Assistant Registrar Sp/Maya To 1. The Income Tax Appellate Tribunal, Madras 'A' Bench Chennai. https://hcservices.ecourts.gov.in/hcservices/ 2. The Commissioner of Income Tax,(Appeals V) Chennai. 3. The Assistant Commissioner of Income Tax, Company circle V (1) Chennai-34. +1cc to Mr. T. Ravikumar, Advocate, S.R.No.48284 T.C.A.No.413 of 2014 SRA(CO)PM/01/11/2021