Madras High Court
Cit vs Pioneer Press (P) Ltd. on 3 September, 1998
Equivalent citations: (2001)170CTR(MAD)152
Author: R. Jayasimha Babu
Bench: R. Jayasimha Babu
JUDGMENT R. Jayasimha Babu, J.
Revenue is aggrieved by an order of the Tribunal which is fair and just and which merely upheld the order of the Commissioner (Appeals) who had accepted the assessees submission that it had not made a claim before the Income Tax Officer for deduction under section 80HH of the Income Tax Act as according to the computation made by the assessee in its return, the income was not sufficient to absorb the deduction, but in view of the disallowance made by the Income Tax Officer, there was scope for that deduction to be absorbed and, therefore, the assessee should be permitted to make its claim for those deductions. The Income Tax Officer was directed to consider that claims and allow the claims to the extent admissible in law. By that order, the interest of revenue was not in anyway prejudiced. The assessee was not conferred any undue benefits. The assessee was merely enabled to obtain a benefit which the law conferred. The reason for not making the claim for deduction in the original return had been found to be bona fide and for an acceptable reason.
2. The assessee is a printing press. The claim made by it was for the assessment year 1980-81.
3. Learned counsel for the revenue referred to the decision of the Supreme Court in the case of Jute Corporation of India Ltd. v. CIT (1991) 187 ITR 688 (SC) wherein the court held that even where a deduction of purchase-tax liability had not been claimed by an assessee in the return initially filed by it, it was permissible for the Appellate Assistant Commissioner to allow that claim to be raised, in view of the fact that there was no dispute that purchase-tax liability had in fact been incurred by the assessee. The court referred to and explained the earlier decision of the court in the case of Addl. CIT v. Gurjargravures (P) Ltd. (1978) 111 ITR 1 (SC) and pointed out that, that decision was based on the facts evident in that case which showed that there was no material on record before the authorities, on basis of which a point which had not been raised could be allowed to be raised. The court had in (1978) 111 ITR 1 (SC) (supra) also held that the Appellate Assistant Commissioner had no power to interfere with the order of assessment made by the Income Tax Officer on a new ground not raised before the Income Tax Officer. The court in the case of Jute Corporation (supra) held that the view taken by the two Judge Bench of the Supreme Court appeared to be in conflict with the view taken by the three Judge Bench of the Apex Court in CIT v. Kanpur Coal Syndicate (1964) 53 ITR 225 (SC). The court noted that from the report of the decision in the (1978) 111 ITR 1 (SC) (supra), it was evident that the three Judge Bench decision in Kanpur Coal Syndicate case (supra) was not brought to the notice of the Bench in the Gurjargravures (P) Ltd. (supra). It had been held in the case of Kanpur Coal Syndicate (supra) that the Appellate Assistant Commissioner had no power to interfere with the order of assessment made by the Income Tax Officer and that the scope of his power is co-terminus with that of the Income Tax Officer and that he can do what the Income Tax Officer can do and also direct him to do what he has failed to do. The latter judgment in the Jute Corporation of India Ltd. (supra) case reiterated the law laid down in the case of Kanpur Coal Syndicate (supra).
4. The amplitude of the power of the Appellate Assistant Commissioner is as extensive as that of Income Tax Officer. It was therefore, well within his powers to have allowed the assessee to raise its claim for deduction under section 80HH of the Act and further directing the Income Tax Officer to examine the case and allow that claim to the extent admissible in law.
5. The question referred to us namely, "Whether the assessee could put forward a claim for relief under section 80HH of the Income Tax Act, 1961, before the Appellate Assistant Commissioner and whether the Appellate Assistant Commissioner could direct the Income Tax Officer to consider that claim when the assessee has not put forward any material before the Appellate Assistant Commissioner ?"
is, therefore, answered in favour of the assessee and against the revenue. The assessee shall be entitled to costs in the sum of Rs. 1,500.