INCOME TAX ACT, 1961

Section 250

Appeal [CIT(A)] - Claim first time made before CIT(A) - Admissibility -

The assessee filed the original return of income which contained certain typographical errors in Schedule-BP. The assessee had entered 'NIL' in item No.1 instead of Rs. 2,52,18,534. It was further submitted that against this item, the assessee was eligible to claim exemption under section 10(23C)(iiib) of the Act or deduction under section 80P of the Act and the exemption was to be filled in item No. 5 of Schedule-BP. It was further submitted that the CPC while processing the return of income made an addition of Rs. 2,95,98,463 under the head 'income from business or profession'. It was also pointed out that the CPC has only considered the item in lieu of 'NIL' in item No.1 of Schedule BP and has not considered the exemption under section 10(23C)(iiib) or deduction under section 80P, for which the assessee is eligible. It was further submitted that for the first time, the revenue has raised a contention with regard to eligibility of the assessee to claim exemption/deduction as the same was not claimed in the original return of income and assessee had not filed a revised return of income to make such a claim. It was also argued that the addition was made by the CPC and not by the AO during the course of assessment proceeding. It was also pointed out that the process is automated and assessee was not provided with any opportunity to make a fresh claim by way of revised return before CPC. Therefore, the assessee claimed the same in an appeal and contended that there was a typographical error in the return of income. It was submitted that without prejudice to the aforesaid submissions, the assessee was eligible to make a claim before the appellate authority even if the same is not claimed in the original return of income or a revised return of income. Held: In the instant case, the claim for eligibility with regard to deduction under section 80P of the Act was entertained by the CIT(A) as the assessee did not have the opportunity to raise the contention before the assessing officer as the order of assessment was passed by the CPC and therefore, the assessee had no opportunity to make a fresh claim by way of revised return before the CPC as the process is automated. The claim of the assessee was allowed by the AO by placing reliance on the assessee's own case for the assessment year 2005-06. Appellate authority is empowered to entertain such a claim in the absence of such a claim being made in the original return or in the revised return.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2010-11

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