DINMAHMAD HAJIBHAI MOMIN,AHMEDABAD V. THE ITO, WARD-3(2)(1), AHMEDABAD

ITA 1010/AHD/2025

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The case involves Dinmahmad Hajibhai Momin, the assessee, who appealed against the decision of the Commissioner of Income Tax (Appeals) and the Assessing Officer regarding the non-consideration of an additional claim under section 54B of the Income Tax Act, 1961. The assessee had initially omitted to claim a deduction for the purchase of agricultural land in his return filed in response to a notice under section 148, which was later rectified through a revised computation. However, the Assessing Officer did not consider this revised claim during the reassessment proceedings. The Tribunal found that the additional claim was supported by evidence and should be examined on merits, thus restoring the matter to the Assessing Officer.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 787535 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2018-2019
• Appeal Filed On: 06-05-2025
• Other Referred Cases: Goetze (India) Ltd. v. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UMESH KUMAR AGRAWAL
• Assessee Lawyers: RUSHIN PATEL
• Keywords: Set aside; Opportunity of being heard; Revised return; Reassessment proceedings; Corroborative evidences; Capital Gains; Rectification of order; Assessment record
• Section: 147; 148; 154; 54B

Judgement Text

"आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण,अहमदाबाद \bयायपीठ अहमदाबाद \bयायपीठ अहमदाबाद \bयायपीठ अहमदाबाद \bयायपीठ ‘C’ अहमदाबाद। अहमदाबाद। अहमदाबाद। अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD ]BEFORE MS. SUCHITRA R. KAMBLE, JUDICIAL MEMBER AND MAKARAND V.MAHADEOKAR, ACCOUNTANT MEMBER ITA No.1010/Ahd/2025 Asstt.Year : 2018-19 Dinmahmad Hajibhai Momin 702, Momn Vas Shela, Ahmedabad. PAN : BCMPM 1298 P Vs. ITO, Ward-3(2)(1) Vejalpur Ahmedabad. (Applicant) (Responent) Assessee by : Shri Rushin Patel, AR Revenue by : Shri Umesh Kumar Agrawal, Sr.DR सुनवाई क तारीख/Date of Hearing : 18/11/2025 घोषणा क तारीख /Date of Pronouncement: 19/11/2025 आदेश आदेश आदेश आदेश/O R D E R PER MAKARAND V.MAHADEOKAR, AM: This appeal by the assessee arises from the order dated 11.03.2025 passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”], under section 250 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”], whereby the learned CIT(A) upheld the rectification order passed by the Assessing Officer under section 154 dated 05.04.2024. The rectification proceedings were initiated in relation to the reassessment order passed under section 147 r.w.s. 144B dated 19.02.2024 for the assessment year 2018–19. 2. Facts of the Case 2.1 Information was received by the Assessing Officer from internal risk parameters of the Department that the assessee had undertaken Printed from counselvise.com ITA No.1010/Ahd/2025 2 substantial financial transactions during the relevant year in the nature of purchase and sale of immovable properties aggregating to Rs.29,86,15,000/-, although no return of income had been filed. Based on such information, the Assessing Officer issued notice under section 148 on 08.04.2022. In response to the notice issued under section 148, the assessee filed a return of income on 03.06.2022 declaring total income of Rs. 2,90,63,110/-. The declared income mainly comprised long term capital gains arising from sale of certain parcels of agricultural land together with income from other sources. Along with the return, the assessee claimed deduction under section 54B amounting to Rs. 1,66,79,520/- for purchase of agricultural land at Survey No. 643, Village Shela. 2.2 During the reassessment proceedings, the assessee produced details of sale of the relevant agricultural lands and also furnished documentary evidences in respect of purchases of new agricultural properties. The assessee’s submissions included a further revised computation dated 12.12.2023 wherein it was disclosed that one additional parcel of agricultural land situated at Survey No. 21/1, Village Shela, had also been purchased after the sale of original agricultural land. The value of such additional investment was Rs.25,41,885/-. This amount had been inadvertently omitted at the time of filing return in response to notice under section 148. The revised computation therefore reflected an enhanced aggregate claim under section 54B amounting to Rs. 1,92,21,405/-. 2.3 The assessment order passed under section 147 r.w.s. 144B dated 19.02.2024 records that the Assessing Officer examined the details of sale of agricultural lands, the evidences of purchase of four properties, and the claim of deduction under section 54B as originally made in the return filed in response to notice under section 148. The assessment order specifically notes that the claim of Rs. 1,66,79,520/- under section 54B was examined and found correct. However, although the revised computation filed by the assessee on 12.12.2023 formed part of the electronic assessment record, the Assessing Officer did not deal with the enhanced claim of Printed from counselvise.com ITA No.1010/Ahd/2025 3 Rs.25,41,885/- relating to Survey No. 21/1, nor did he record any finding regarding its admissibility or otherwise. The assessment was concluded by accepting the total income returned by the assessee at Rs.2,90,63,110/-. 2.4 On noticing that the Assessing Officer had not considered the revised computation reflecting the additional claim of deduction under section 54B, the assessee preferred an application under section 154 dated 07.03.2024. In the rectification application, the assessee specifically pointed out the inadvertent error in omitting the claim in the original return and submitted that the revised computation was already on record during reassessment. It was contended that non-consideration of the additional claim constituted a mistake apparent from the record. 2.5 The Assessing Officer, in the rectification order dated 05.04.2024, rejected the assessee’s application by observing that the enhanced claim under section 54B had not been made in the return filed in response to notice under section 148 and therefore could not be admitted by way of rectification under section 154. 2.6 Aggrieved by the rejection of the rectification petition, the assessee filed an appeal before the learned CIT(A). In the appellate proceedings, the assessee made detailed submissions explaining that the omission of the additional claim was inadvertent, that documentary evidences regarding the purchase of land at Survey No. 21/1 were furnished during assessment, and that the revised computation was admittedly part of reassessment records. The assessee relied upon judicial precedents holding that additional claims may be raised before appellate authorities despite absence of a revised return. 2.7 The learned CIT(A) dismissed the appeal. The learned CIT(A) concurred with the Assessing Officer that since the additional claim was not made in the original return, the same could not be admitted through rectification proceedings under section 154. The learned CIT(A) further held Printed from counselvise.com ITA No.1010/Ahd/2025 4 that the remedy of the assessee lay in preferring a separate appeal against the reassessment order under section 147 r.w.s. 144B if he sought admission of the fresh claim. While doing so, the learned CIT(A) did not adjudicate the allowability of the claim on merits and confined himself to the technical reasoning that there was no mistake apparent from the record. 3. The assessee is in further appeal before us and has raised the following specific grounds: 1.1 On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in not admitting and disallowing the appellant’s fresh claim of deduction under section 54B of the Act produced with documentary evidences at the time of reassessment proceedings, despite having the jurisdiction to do so. 1.2 On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding that the appellant should seek remedy by filing appeal against the order passed under section 147, without appreciating that the rectification order under section 154, which is subject matter of appeal, was passed in relation to the said reassessment order alone. The CIT(A) failed to recognise that the claim under section 54B, being part of the rectification context, was well within the scope of the present proceedings and could have been adjudicated therein. 1.3 Your appellant craves leave to allow addition, alteration, deletion and withdrawal of any of the grounds before the appeal is finally disposed off. The appellant respectfully prays that the fresh claim be allowed under this appeal or be set aside before the learned CIT(A) as the Hon’ble Tribunal may deem fit and just in the interest of justice. 3.1 During the course of hearing before us, the authorised representative of the assessee reiterated the factual background in detail and submitted that the revised computation dated 12.12.2023, containing the additional deduction under section 54B amounting to Rs.25,41,885 for the purchase of agricultural land at Survey No. 21/1, Village Shela, had been duly furnished during the reassessment proceedings and formed an integral part of the assessment record. It was submitted that the omission to claim this amount in the return filed in response to notice under section 148 was purely inadvertent and was subsequently rectified by furnishing the revised computation along with complete documentary evidences relating to the purchase of the said agricultural land. Printed from counselvise.com ITA No.1010/Ahd/2025 5 4. In reply, the learned Departmental Representative supported the orders of the lower authorities. 5. We have carefully considered the rival submissions and perused the material available on record. The short controversy in the present appeal is whether the assessee’s additional claim of deduction under section 54B, amounting to Rs.25,41,885 (Difference between deduction claimed u/s 54B in revised computation and claimed in return filed in response to notice u/s 148 Rs.19221405/- and Rs.16679520/-) for the purchase of agricultural land at Survey No. 21/1, Village Shela, can be admitted and adjudicated in appellate proceedings even though such claim was not made in the return of income filed in response to notice under section 148. It is an admitted position that the assessee furnished a revised computation during the reassessment proceedings on 12.12.2023 along with all primary evidences in support of the said purchase. It is also not disputed that these documents formed part of the assessment records at the time of completion of reassessment under section 147 r.w.s. 144B. The Assessing Officer, however, accepted only the claim originally made in the return and omitted to consider the enhanced claim for deduction under section 54B. The application for rectification under section 154 was also rejected on the ground that the claim had not been made in the return. 5.1 The learned CIT(A) sustained this approach solely on the technical ground that a fresh claim cannot be allowed through rectification proceedings and that the assessee should have preferred a separate appeal against the reassessment order. The learned CIT(A) did not examine the allowability of the claim on merits, nor did he consider that all supporting evidences were placed before the Assessing Officer prior to completion of the assessment. 5.2 We note that the issue before us is not confined to the narrow scope of section 154. The present appeal is before the Tribunal under section 253 and is required to be adjudicated within the wider appellate jurisdiction conferred upon this forum. It is well settled that the appellate authorities Printed from counselvise.com ITA No.1010/Ahd/2025 6 under the Act, including the Tribunal, have jurisdiction to admit a legal claim of the assessee even if such claim was not made in the return, provided the relevant material is available on record. 5.3 At this stage, it is necessary to consider the decision of the Hon’ble Supreme Court in Goetze (India) Ltd. v. CIT reported in 284 ITR 323. In that case, the Hon’ble Supreme Court held that the Assessing Officer has no power to entertain a fresh claim for deduction which was not made in the return of income, except by way of a revised return. However, the Hon’ble Supreme Court expressly clarified in the concluding portion of the judgment that the restriction applies only to the jurisdiction of the Assessing Officer and does not impinge upon the powers of the appellate authorities. The Hon’ble Supreme Court stated as follows: “However, we make it clear that the issue in this case is limited to the power of the assessing authority and does not impinge on the powers of the Tribunal under section 254 of the Income-tax Act, 1961.” 5.4 This categorical clarification makes it abundantly clear that the decision does not curtail the Tribunal’s jurisdiction to entertain a legal claim which is otherwise supported by the record. The legal position emerging from subsequent judicial pronouncements is also consistent with the above view. High Courts across the country have held that appellate authorities are competent to admit additional claims when the relevant facts are already on record and no fresh investigation is required. In the present case, the assessee furnished documentary evidences of the purchase of the agricultural land at Survey No. 21/1 during the reassessment proceedings. The revised computation was part of the assessment folder. The Assessing Officer did not dispute the genuineness of the purchased property or the utilisation of the capital gain proceeds. The non-consideration of the claim occurred solely because the Assessing Officer confined himself to the amount claimed in the return. 5.5 Once the evidences were available on the assessment record, and once the assessee had brought to the notice of the Assessing Officer the Printed from counselvise.com ITA No.1010/Ahd/2025 7 enhanced claim before finalisation of assessment, the learned CIT(A) ought to have adjudicated the claim on merits. The direction of the learned CIT(A) that the assessee should file a separate appeal against the reassessment order is not tenable in the present factual matrix because the rectification application itself was filed to correct an omission in the reassessment order and the appeal before the learned CIT(A) was confined to this issue alone. 5.6 Considering the totality of facts, we are of the view that the assessee’s additional claim under section 54B requires to be examined on merits by the Assessing Officer. The denial of such examination merely because the claim was not part of the original return is not justified in the facts of this case, particularly when the supporting evidences were already on record during the assessment proceedings. 5.7 In the interest of justice, we therefore deem it appropriate to restore the matter to the file of the Assessing Officer with a direction to examine the assessee’s additional claim under section 54B amounting to Rs.25,41,885 in respect of the agricultural land purchased at Survey No. 21/1, Village Shela. The Assessing Officer shall verify the utilisation of capital gains, the nature of the land sold and purchased, the time period of investment, and all other statutory conditions prescribed under section 54B. The Assessing Officer shall then allow the claim to the extent it is found allowable under the law. The assessee shall be afforded reasonable opportunity of being heard. The Assessing Officer shall pass a speaking order in accordance with law. 6. In the result, the appeal of the assessee are allowed for statistical purposes. Order pronounced in the Court on 19th November, 2025 at Ahmedabad. Sd/- Sd/- (SUCHITRA R. KAMBLE) JUDICIAL MEMBER (MAKARAND V. MAHADEOKAR) ACCOUNTANT MEMBER Ahmedabad, dated 19/11/2025 Printed from counselvise.com "