MADHAV CONSTRUCTION, ULHASNAGAR V. PR CIT 3, THANE

ITA 3271/MUM/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9864 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 04-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANTANU SAIKIA
• Assessee Lawyers: DR P DANIELSHRI S M MAKHIJA
• Keywords: Opportunity of being heard; Retrospective amendment; Assessment record; Revised return
• Section: 43B; 143(3); 133A; 153A; 80IB; 263; 132; 10; 139

Judgement Text

1 MADHAV CONSTRUCTION IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH BMUMBAI BEFORE SHRI D.T. GARASIA (JUDICIAL MEMBER) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) ITA NO.3271 TO 3276/MUM/2017 (ASSESSMNT YEARS 2003-04 TO 2008-09) MADHAV CONSTRUCTION SHOP NO.2, C/13, ROOM NO.25 & 26, NETAJI CHOWK, ULHASNAGAR PAN : AAGFM6690L VS PRINCIPAL CIT-3, THANE APPELLANT RESPONDENT APPELLANT BY SHRI DR P DANIEL / SHRI S.M. MAKHIJA RESPONDENT BY SHRI SANTANU SAIKIA DATE OF HEARING 22 -06-2017 DATE OF PRONOUNCEMENT 06-2017 O R D E R PER BENCH : THESE ARE SIX APPEALS FILED BY THE ASSESSE DIRECTE D AGAINST THE SEPARATE BUT IDENTICAL ORDERS OF PRINCIPAL COMMISSIONER OF I NOCME-TAX-3, THANE U/S 263 OF THE INCOME-TAX ACT, 1961 FOR THE ASSESSMENT YEAR S 2003-04 TO 2008-09. SINCE COMMON FACTS ARE INVOLVED AND THE ISSUES ARE IDENTICAL, FOR THE SAKE OF CONVENIENCE, THESE APPEALS WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A PARTNERSHIP FIRM 2 MADHAV CONSTRUCTION ENGAGED IN THE BUSINESS OF BUILDERS AND DEVELOPERS AND GOVERNMENT CONTRACTORS. THE ASSESSEE HAS FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEARS 2003-04 TO 2008-09 U/S 139(1) OF THE INCOME-T AX ACT, 1961. THE ASSESSMENTS FOR THE ASSESSMENT YEARS 2003-04 TO 200 8-09 WERE COMPLETED U/S 143(3) MAKING CERTAIN ADDITIONS WHICH WERE ACCEPTED BY THE ASSESSEE. SUBSEQUENTLY, A SEARCH & SEIZURE OPERATION U/S 132 OF THE INCOME-TAX ACT, 1961 WAS CARRIED OUT AT THE RESIDENTIAL PREMISES OF THE MAIN PERSON OF THE GROUP AND SURVEY U/S 133A WAS CARRIED OUT AT ASSESS EES BUSINESS PREMISES ON 16-10-2008. CONSEQUENT TO SEARCH, NOTICES 153A OF THE ACT WERE ISSUED CALLING FOR RETURN OF INCOME FOR THE ASSESSMENT YEARS 2003- 04 TO 2008-09. THE ASSESSEE HAS FILED RETURNS OF INCOME IN RESPONSE TO NOTICES U/S 153A OF THE ACT. THEREAFTER, THE AO COMPLETED THE ASSESSMENTS U/S 14 3(3) R.W.S. 153A OF THE INCOME-TAX ACT, 1961 FOR ALL THE SIX ASSESSMENT YEA RS UNDER CONSIDERATION BY MAKING CERTAIN ADDITIONS. THE ASSESSEE PREFERRED A PPEALS BEFORE THE CIT(A) AGAINST THE ADDITIONS MADE BY THE AO. 3. THE ASSESSEE IS IN THE BUSINESS OF BUILDERS AND DEV ELOPERS. THE ASSESSEE HAS DEVELOPED A HOUSING PROJECT CALLED, MADHAV SRU SHTI, PHASE-I. THE ASSESSEE DID NOT CLAIM ANY DEDUCTION U/S 80IB(10) F OR ALL THESE ASSESSMENT YEARS EITHER IN THE ORIGINAL RETURNS OF INCOME FILE D U/S 139(1) OR IN THE RETURNS FILED IN PURSUANCE TO NOTICE U/S 153A OF THE INCOME -TAX ACT, 1961. THE 3 MADHAV CONSTRUCTION ASSESSEE DID NOT RAISE A CLAIM FOR DEDUCTION U/S 80 IB(10) BEFORE THE AO EITHER DURING THE ORIGINAL ASSESSMENT PROCEEDINGS OR DURIN G THE ASSESSMENT PROCEEDINGS U/S 153A OF THE INCOME-TAX ACT, 1961. THE ASSESSEE HAS MADE A CLAIM OF DEDUCTION U/S 80IB(10) FOR THE FIRST TIME BEFORE THE CIT(A)-I, BY WAY OF ADDITIONAL GROUND OF APPEAL RAISED ON THE BASIS OF JUDGEMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES 333 ITR 389 (BOM) ON THE GROUND THAT A HOUSING PROJECT APPROVED PRIOR TO 01- 04-2005 IS ELIGIBLE TO CLAIM EXEMPTION U/S 80IB(10) EVEN WITH A TOTAL COMMERCIAL AREA IN THE PROJECT EXCEEDING 5% OF THE TOTAL BUILT UP AREA OR 2,000 S Q.FT. OF THE TOTAL CONSTRUCTED AREA, WHICHEVER IS LESS. BEFORE THE CIT(A), THE AS SESSEE CONTENDED THAT IT WAS ENTITLED TO GET A DEDUCTION U/S 80IB(10) IN RESPECT OF ITS HOUSING PROJECT, M/S MADHAV SRUSHTI, PHASE-I. THE CIT(A), WHILE DECID ING THE APPEAL DID NOT ADMIT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE AND RE JECTED THE CLAIM OF THE ASSESSEE TOWARDS DEDUCTION CLAIMED U/S 80IB(10) ON THE GROUND THAT THE ASSESSEE DID NOT MAKE ANY CLAIM EITHER IN THE ORIGI NAL RETURNS OF INCOME FILED U/S 139(1) OR IN THE REVISED RETURNS FILED U/S 153A OF THE ACT. 4. THE ASSESSEE PREFERRED APPEALS AGAINST THE ORDERS O F THE CIT(A) BEFORE ITAT. THE ITAT, B-BENCH, MUMBAI, VIDE ITS CONSOLID ATED ORDER DATED 13-03- 2013 FOR THE ASSESSMENT YEARS 2003-04 TO 2008-09 RE STORED THE MATTER TO THE FILE OF THE AO AND DIRECTED THE AO TO VERIFY THE CL AIM OF THE ASSESSEE IN THE 4 MADHAV CONSTRUCTION LIGHT OF PROVISIONS OF SECTION 80IB(10) BY OBSERVIN G THAT THE HOUSING PROJECT DEVELOPED BY THE ASSESSEE BY NAME MADHAV SRUSHTI, PHASE-I MAY BE ENTITLED FOR DEDUCTION U/S 80IB(10) IN VIEW OF THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES (SUPRA). 5. THEREAFTER, IN PURSUANCE TO THE ORDER PASSED BY THE ITAT, THE AO ISSUED A LETTER TO THE ASSESSEE CALLING UPON IT TO FURNISH V ARIOUS DETAILS IN RESPECT OF DEDUCTION CLAIMED U/S 80IB(10) ESPECIALLY WITH REFE RENCE TO THE OBSERVATIONS OF THE ITAT WITH REGARD TO THE ELIGIBILITY OF THE A SSESSEE FOR SUCH CLAIM. IN RESPONSE TO THE AOS NOTICES, THE ASSESSEE FURNISHED DETAILS IN RESPECT OF THE PROJECT MADHAV SRUSHTI, PHASE-I INCLUDING COPY OF AGREEMENT FOR ACQUISITION OF LAND, COPIES OF BUILDING PLANS, COPY OF COMPLETI ON CERTIFICATE AND COPY OF CERTIFICATE FROM ARCHITECT SURVEYING THE BUILT UP A REA OF EACH OF THE RESIDENTIAL HOUSES TO PROVE THAT EACH UNITS BUILT UP AREA IS L ESS THAN 1,500 SQ.FT. SO AS TO PROVE THE ELIGIBILITY OF THE ASSESSEE FOR DEDUCTION CLAIMED U/S 80IB(10) OF THE ACT. THE AO, AFTER CONSIDERING THE DETAILS FURNISH ED BY THE ASSESSEE AND ALSO TAKING INTO ACCOUNT THE DIRECTIONS GIVEN BY THE ITA T IN THE LIGHT OF DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF M/S BRAHMA ASSOCIATES ALLOWED THE DEDUCTION CLAIMED U/S 80IB(10) OF THE INCOME-TAX AC T, 1961 FOR THE ASSESSMENT YEARS 2003-04 TO 2008-09. 6. SUBSEQUENT TO THAT, THE PRINCIPAL CIT-3, THANE ISSU ED A SHOW CAUSE NOTICE 5 MADHAV CONSTRUCTION DATED 16-02-2016 AND ASKED TO EXPLAIN AS TO WHY THE ASSESSMENT ORDES PASSED BY THE AO U/S 143(3) R.W.S. 254 OF THE INCOME-TAX A CT, 1961 SHALL NOT BE REVISED UNDER THE PROVISIONS OF SECTION 263 OF THE ACT. TH E PRINCIPAL CIT PROPOSED TO REVISE THE ASSESSMENT ORDERS FOR THE REASON THAT ON EXAMINATION OF ASSESSMENT RECORDS IT WAS NOTICED THAT THE AO HAS ALLOWED DEDU CTION CLAIMED U/S 80IB(10) EVEN THOUGH THE ASSESSEE HAS NOT MADE ANY CLAIM IN THE ORIGINAL RETURNS FILED U/S 139(1) OR IN THE REVISED RETURNS FILED IN PURSU ANCE TO NOTICE U/S 153A OF THE ACT, 1961. THE PRINCIPAL CIT FURTHER OBSERVED THAT AS PER THE PROVISIONS OF SECTION 80A(5) OF THE INCOME-TAX ACT, 1961, WHERE T HE ASSESSEE FAILS TO MAKE A CLAIM IN HIS RETURN OF INCOME FOR ANY DEDUCTION UND ER ANY PROVISIONS OF THIS CHAPTER UNDER THE HEAD C: DEDUCTIONS IN RESPECT OF CERTAIN INCOMES NO DEDUCTION SHALL BE ALLOWED TO HIM THEREUNDER, NO D EDUCTION CAN BE ALLOWED. THE CIT(A) FURTHER OBSERVED THAT THE PROVISIONS OF SECTION 80A(5) WERE INSERTED BY THE FINANCE ACT, 2009 WITH RETROSPECTIVE EFFECT FROM 01-04-2003 AND ACCORDINGLY, IT IS APPLICABLE FROM THE A.Y. 2003-04 AND ONWARDS. THE AO HAS ALLOWED DEDUCTION CLAIMED BY THE ASSESSEE U/S 80IB( 10) IN CONTRAVENTION OF THE SPECIFIC PROVISIONS PROVIDED BY WAY OF SECTION 80A(5) WHICH MANDATES THE ASSESSEE TO CLAIM ANY DEDUCTION IN THE RETURN OF IN COME. THOUGH ASSESSEE HAS NOT MADE ANY CLAIM IN THE RETURN OF INCOME, THE AO HAS ALLOWED THE BENEFIT OF DEDUCTION WHICH CAUSED PREJUDICE TO THE INTEREST OF THE REVENUE. THEREFORE, 6 MADHAV CONSTRUCTION HE OPINED THAT THE ASSESSMENT ORDER PASSED BY THE A O U/S 143(3) R.W.S. 254 IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTER EST OF THE REVENUE AND ACCORDINGLY ISSUED A NOTICE TO THE ASSESSEE. 7. IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE SUBMITTED THAT THE ASSESSMENT ORDERS PASSED BY THE AO U/S 143(3) R.W.S . 254 NEITHER ARE ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE RE VENUE AS THE AO HAS ALLOWED THE CLAIM OF DEDUCTION U/S 80IB(10) AS PER THE SPEC IFIC DIRECTIONS GIVEN BY THE ITAT. THE ASSESSEE FURTHER SUBMITTED THAT ONCE THE AO HAS PASSED THE ASSESSMENT ORDER AS PER THE DIRECTIONS OF THE ITAT, THE ORDER OF ITAT IS MERGED IN THE ASSESSMENT ORDERS AND, THEREFORE, IT IS BEYO ND THE SCOPE OF THE JURISDICTION OF PRINCIPAL CIT U/S 263 OF THE ACT. THE ASSESSEE FURTHER SUBMITTED THAT THE DEPARTMENT HAS FILED FURTHER APPEALS AGAIN ST THE ORDER OF THE ITAT BEFORE THE HONBLE BOMBAY HIGH COURT AND HAS TAKEN A SPECIFIC GROUND IN REGARD TO SECTION 80A(5). THE HONBLE BOMBAY HIGH COURT HAS NOT ENTERTAINED THE APPEALS OF THE DEPARTMENT IN RESPECT OF THE PRO VISIONS OF SECTION 80A(5). THEREFORE, IT IS INCORRECT TO SAY THAT THE AO HAS I GNORED THE PROVISIONS OF SECTION 80A(5) BEFORE ALLOWING THE CLAIM OF THE ASS ESSEE U/S 80IB(10) OF THE ACT. IN SUPPORT OF HIS ARGUMENTS, HE RELIED UPON T HE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF RANKA JEWELLERS VS ACIT 328 ITR 148 (BOM) AND CIT VS K SERA SERA PRODUCTIONS LTD (2015) 374 I TR 503 (BOM). THE ASSESSEE 7 MADHAV CONSTRUCTION FURTHER RELIED UPON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS SHETH DEVELOPERS PVT LTD 254 CTR 127 (BOM) TO ARGUE THAT THERE WAS NO ERROR IN THE ASSESSMENT ORDERS PASSED BY THE AO IN ALLOWING THE CLAIM OF DEDUCTION U/S 80IB(10) WITHOUT CONSIDERING THE PROV ISIONS OF SECTION 80A(5) OF THE INCOME-TAX ACT, 1961. 8. THE PRINCIPAL CIT, AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE HELD THAT THE ASSESSMENT ORDER PASSED BY THE AO U/S 143( 3) R.W.S. 254 OF THE ACT IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE AS THE AO HAS NOT CONSIDERED THE PROVISIONS OF SECTION 80A(5) BEFORE ALLOWING THE CLAIM OF DEDUCTION U/S 80IB(10). THE AO WAS DUTY BOUND TO T AKE INTO ACCOUNT THE PROVISIONS OF SECTION 80A(5) WHILE CONSIDERING THE PROVISIONS OF SECITON 80IB(10). THE AO ALLOWED THE CLAIM OF THE ASSESSEE EVEN THOUGH THE SAME WAS NOT CLAIMED IN THE RETURN OF INCOME BY MISINTERPRET ING THE ORDER OF THE ITAT. THE ITAT HAS NOT GIVEN ANY FINDING AS TO THE ALLOWA BILITY OF DEDUCTION CLAIMED U/S 80IB(10), BUT ONLY RESTORED THE MATTER TO THE F ILE OF THE AO FOR FURTHER ENQUIRIES WITH REFERENCE TO THE PROVISIONS OF SECTI ON 80IB(10). THE DEDUCTION PROVIDED IN SECTION 80IB(10) IS ALLOWABLE ONLY WHEN SUCH CLAIM IS MADE IN THE RETURN OF INCOME. IN THIS CASE, THE ASSESSEE DID N OT MAKE ANY CLAIM EITHER IN THE ORIGINAL RETURN FILED U/S 139(1) OR IN THE RETU RN FILED U/S 153A OF THE ACT. THE AO WITHOUT CONSIDERING THE PROVISIONS OF SECTIO N 80A(5) WHICH MANDATES 8 MADHAV CONSTRUCTION THE ASSESSEE TO BE ELIGIBLE FOR CLAIMING DEDUCTION U/S 80IB(10) ONLY WHEN SUCH CLAIM IS MADE IN THE RETURN OF INCOME, ALLOWED THE DEDUCTION WHICH CAUSED PREJUDICE TO THE INTEREST OF THE REVENUE, THEREFORE , THE PRINCIPAL CIT SET ASIDE THE ORDER PASSED BY THE AO AND DIRECTED THE AO TO R EDO THE ASSESSMENT AFTER CONSIDERING THE PROVISIONS OF SECTION 80A(5) OF THE INCOME-TAX ACT, 1961. AGGRIEVED BY THE ORDER OF PRINCIPAL CIT, THE ASSESS EE IS IN APPAL BEFORE US. 9. THE LD.AR FOR THE ASSESSEE SUBMITTED THAT THE LD. P RINCIPAL CIT WAS ERRED IN INVOKING JURISDICTION U/S 263 TO REVISE THE ASSE SSMENT ORDERS PASSED BY THE AO U/S 143(3) R.W.S 254 WITHOUT APPRECIATING THE FA CT THAT THE SAID ORDERS WERE NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST O F THE REVENUE BUT WAS PASSED IN ACCORDANCE WITH THE DIRECTIONS OF THE ITAT AND A S SUCH, IT WAS BEYOND THE PURVIEW OF SECTION 263 OF THE INCOME-TAX ACT, 1961. THE LD.AR FURTHER SUBMITTED THAT THE ORDERS PASSED BY THE AO HAD MERG ED IN THE ORDER OF ITAT GIVING SPECIFIC DIRECTIONS TO THE AO TO VERIFY THE CLAIM OF THE ASSESSEE IN THE LIGHT OF PROVISIONS OF SECTION 80IB(10) AND THUS, T HE AO WAS BOUND TO FOLLOW THE SAID DIRECTIONS. THE AR FURTHER SUBMITTED THAT THE LD.PRINCIPAL CIT WAS ERRED IN SIMULTANEOUSLY FILING REVIEW PETITIONS BEF ORE HONBLE HIGH COURT AS WELL AS INVOKING THE PROVISIONS OF SECTION 263 IN R ESPECT OF THE SAME POINT BEING AGITATED WHICH MAKES IT CLEAR THAT THE ORDER PASSED BY THE TRIBUNAL WAS IN THE KNOWLEDGE OF THE PRINCIPAL COMMISSIONER, THE REFORE, THE INVOCATION OF 9 MADHAV CONSTRUCTION JURISDICTION U/S 263 BY THE PRINCIPAL COMMISSIONER IS NOT SUSTAINABLE IN THE EYES OF LAW. THE LD.AR REFERRING TO THE DECISIONS OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS K. SERA SERA PRODU CTIONS LTD (SUPRA) AND ALSO RANKA JEWELLERS VS ADDL.CIT (SUPRA) SUBMITTED THAT ONCE THE ISSUES WHICH ARE SUBJECT MATTER OF APPEALS BEFORE THE HIGHER AUTHORI TIES AND WHICH HAS BEEN ADJUDICATED BY HIGHER AUTHORITIES, THEN THE CIT CAN NOT INVOKE JURISDICTION U/S 263 FOR RE-CONSIDERING THE ISSUE / ISSUES. IN THIS CASE, THE ISSUE OF CLAIM OF DEDUCTION U/S 80IB(10) WAS SUBJECT MATTER OF APPEAL BEFORE THE CIT(A) AS WELL AS THE HONBLE ITAT HAVE CONSIDERED THE ISSUE AND A FTER TAKING INTO ACCOUNT THE FACTS OF THE CASE AND ALSO THE PROVISIONS OF SECTIO N 80A(5) HAS DIRECTED THE AO TO EXAMINE THE ISSUE OF DEDUCTION CLAIMED U/S 80IB( 10). THEREFORE, THE PRINCIPAL CIT CANNOT REVISE THE ASSESSMENT ORDERS O N THIS ISSUE. IN SUPPORT OF HIS ARGUMENTS, HE RELIED UPON CERTAIN JUDICIAL PREC EDENTS INCLUDING THE DECISION OF HONBLE HIGH COURT OF MADRAS IN THE CASE OF CIT VS ABHINITA FOUNDATION PVT LTD IN TCA NO. 811 OF 2016 DATED 06-06-2017. 10. ON THE OTHER HAND, THE LD.DR STRONGLY SUBMITTED THA T THE ORDERS PASSED BY THE AO ARE ERRONEOUS INSOFAR AS THEY ARE PREJUDI CIAL TO THE INTEREST OF THE REVENUE BECAUSE THE AO HAS NOT CONDUCTED REQUIRED E NQUIRY BEFORE ALLOWING THE DEDUCTION CLAIMED U/S 80IB(10) OF THE ACT WHICH CAUSED PREJUDICE TO THE INTEREST OF THE REVENUE. THE LD.DR FURTHER SUBMITT ED THAT THE PROVISIONS OF 10 MADHAV CONSTRUCTION SECTION 80A(5) MAKES IT MANDATORY FOR THE ASSESSEE TO CLAIM THE DEDUCTION IN THE RETURN ITSELF TO BE ELIGIBLE FOR ANY DEDUCTION CLAIMED. HOWEVER, THE AO ALLOWED THE CLAIM EVEN THOUGH NO SUCH CLAIM HAS BEE N MADE EITHER IN THE ORIGINAL RETURN FILED OR REVISED RETURN FILED IN PU RSUANCE TO NOTICE U/S 153A OF THE ACT. THE ORDER PASSED BY THE AO IS ERRONEOUS I NSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND HENCE THE PRINCIPAL CIT HAS RIGHTLY ASSUMED JURISDICTION TO REVISE THE ASSESSMENT ORDERS AND HI S ORDER SHOULD BE UPHELD. 11. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIA LS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES B ELOW. THE PRINCIPAL CIT ASSUMED JURISDICTION TO REVISE THE ASSESSMENT ORDER S ON THE GROUND THAT THE AO HAS NOT CONDUCTED PROPER ENQUIRY BEFORE COMPLETI ON OF ASSESSMENTS, THEREBY THE ASSESSMENT ORDERS PASSED BY THE AO U/S 143(3) R.W.S. 153A ARE ERRONEOUS INSOFAR AS THEY ARE PREJUDICIAL TO THE IN TEREST OF THE REVENUE. THE PRINCIPAL CIT REVISED THE ASSESSMENT ORDER ON THE G ROUND THAT THE AO HAS ALLOWED DEDUCTION U/S 80IB(10) WHICH IS OTHERWISE N OT ALLOWABLE TO THE ASSESSEE BECAUSE THE ASSESSEE HAS NOT MADE ANY CLAI M FOR DEDUCTION IN THE RETURNS OF INCOME FILED U/S 139(1) OR IN THE REVISE D RETURNS FILED U/S 153A OF THE ACT. ACCORDING TO THE PRINCIPAL CIT, THE AO MISCON STRUED THE ORDER OF ITAT TO UNDERSTAND THAT ITAT HAS GIVEN ANY SPECIFIC FINDING AS TO THE ALLOWABILITY OF DEDUCTION CLAIMED U/S 80IB(10). BUT, THE ITAT HAS O NLY SET ASIDE THE ISSUE TO 11 MADHAV CONSTRUCTION THE FILE OF THE AO FOR FURTHER VERIFICATION WITH RE FERENCE TO THE PROVISIONS OF SECTION 80IB(10) OF THE ACT, THEREFORE, HE OPINED T HAT THE ORDERS PASSED BY THE AO ARE ERRONEOUS INSOFAR AS THEY ARE PREJUDICIAL TO THE INTEREST OF THE REVENUE. 12. THE PRINCIPAL CIT HAS POWER TO REVISE THE ASSESSMEN T ORDER U/S 263 OF THE ACT, BUT TO INVOKE THE PROVISIONS OF SECTION 263, T HE TWIN CONDITIONS MUST BE SATISFIED, I.E. I) THE ORDER OF THE AO SHOULD BE ER RONEOUS; AND (II) IT MUST BE PREJUDICIAL TO THE INTEREST OF THE REVENUE. UNLESS BOTH THESE CONDITIONS ARE SATISFIED, THE PRINCIPAL CIT CANNOT ASSUME JURISDIC TION TO REVISE THE ASSESSMENT ORDER. IT IS NOT NECESSARY THAT EVERY ORDER WHICH IS ERRONEOUS MAY BE PREJUDICIAL TO THE INTEREST OF THE REVENUE OR VICE VERSA. IN SOME CASES, THE ORDER PASSED BY THE AO MAY BE ERRONEOUS BUT IT MAY NOT BE PREJUDICIAL TO THE INTEREST OF THE REVENUE OR VICE VERSA. UNLESS THE ORDER PASSED BY THE AO IS ERRONEOUS AND ALSO PREJUDICIAL TO THE INTEREST OF T HE REVENUE, THE PRINCIPAL CIT CANNOT ASSUME JURISDICTION TO REVISE THE ASSESSMENT ORDER, THIS IS BECAUSE THE TWIN CONDITIONS I.E. I) THE ORDER OF THE AO SHOULD BE ERRONEOUS; AND (II) IT MUST BE PREJUDICIAL TO THE INTEREST OF THE REVENUE ARE C O-EXIST. 13. IN THIS FACTUAL BACKGROUND, LET US EXAMINE WHETHER THE ASSESSMENT ORDER PASSED BY THE AO IS ERRONEOUS. THE PRINCIPAL CIT W AS OF THE OPINION THAT THE ASSESSMENT ORDER PASSED BY THE AO IS ERRONEOUS AS T HE AO OUGHT TO HAVE CONDUCTED CERTAIN ENQUIRIES BEFORE ALLOWING DEDUCTI ON U/S 80IB(10) WHICH HE 12 MADHAV CONSTRUCTION DID NOT DO WITH REFERENCE TO THE PROVISIONS OF SECT ION 80A(5) AND 80IB(10) OF THE ACT. WE DO NOT FIND ANY MERIT IN THE FINDINGS OF THE PRINCIPAL CIT FOR THE REASON THAT THE AO HAS PASSED THE ASSESSMENT ORDERS BY GIVING EFFECT TO THE ORDER OF ITAT, AND HAS PASSED THE ORDERS ON THE ISS UE OF ADDITIONAL GROUND RAISED BY THE ASSESSEE MAKING A FRESH CLAIM OF DEDU CTION U/S 80IB(10) WHICH WAS ADMITTED AND ADJUDICATED IN THE LIGHT OF DECISI ON OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS BRAHMA ASSOCIATES (SUPRA) WHEREIN THE HONBLE HIGH COURT HELD THAT AS FAR AS DEDUCTION U/ S 80IB(10) IN RESPECT OF HOUSING PROJECT WHICH HAS BEEN APPROVED BY THE APPR OPRIATE AUTHORITY BEFORE 01-04-2005, THE LIMIT OF 5% OF THE TOTAL BUILT UP A REA OR 2000 SQ.FT. WHICHEVER IS LESS, IS NOT APPLICABLE AND IRRESPECTIVE OF THE COM MERCIAL AREA OF HOUSING PROJECT ASSESSEE WAS ENTITLED TO DEDUCTION U/S 80IB (10) OF THE ACT. THE ITAT BY FOLLOWING THE DECISION OF JURISDICTIONAL HIGH COURT ADMITTED THE ADDITIONAL GROUND RAISED BY THE ASSESSEE AND RESTORED THE ISSU E TO THE FILE OF THE AO FOR FURTHER VERIFICATION OF OTHER CONDITIONS PRESCRIBED U/S 80IB(10). THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT ONCE THE ADDITIONAL GROUND RAISED BY THE ASSESSEE HAS BEEN ADMITTED FOR ADJUDICATION, IT IS PRESUMED THAT THE PROVISIONS OF SECTION 80A(5) IS WITHIN THE KNOWLEDGE OF THE IT AT AND ALSO IT HAS CONSIDERED SUCH PROVISIONS BEFORE ALLOWING THE CLAIM OF THE AS SESSEE. HENCE, WE ARE OF THE VIEW THAT THE PRINCIPAL CIT WAS INCORRECT IN OB SERVING THAT THE PROVISIONS OF 13 MADHAV CONSTRUCTION SECTION 80A(5) ARE NOT WITHIN THE KNOWLEDGE OF THE ITAT AND THE ITAT HAS NOT CONSIDERED SUCH PROVISIONS AND ONLY ADMITTED ADDITI ONAL GROUND WITHOUT CONSIDERING THE PROVISIONS, IS INCORRECT. 14. THE AO HAS PASSED ASSESSMENT ORDERS U/S 143(3) R.W. S. 254 AS PER THE SPECIFIC DIRECTIONS GIVEN BY THE ITAT WITH REFERENC E TO THE ELIGIBILITY OF DEDUCTION U/S 80IB(10) OF THE ACT. THE AO, AFTER S ATISFYING WITH THE OTHER CONDITIONS PRESCRIBED U/S 80IB(10) HAS ALLOWED THE CLAIM OF DEDUCTION. THEREFORE, THE PRINCIPAL CIT CANNOT SAY THAT THE AO HAS NOT CONSIDERED THE PROVISIONS OF SECTION 80A(5) BEFORE ALLOWING THE DE DUCTION CLAIMED U/S 80IB(10) OF THE ACT. WE FURTHER OBSERVE THAT THE H ONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS K SERA SERA PRODUCTIONS LTD ( SUPRA) HAS OBSERVED THAT THE CIT HAS NO POWER TO REVISE THE ASSESSMENT ORDER ON THE ISSUES WHICH WERE CONSIDERED AND DECIDED IN APPEAL BY THE CIT(A). A SIMILAR VIEW HAS BEEN EXPRESSED BY THE HONBLE BOMBAY HIGH COURT IN THE C ASE OF RANKA JEWELLERS (SUPRA) WHEREIN IT HAS BEEN CATEGORICALLY HELD THAT SUBJECT MATTER WHICH HAS BEEN DECIDED IN APPEAL CANNOT BE SUBJECT MATTER OF REVISION U/S 263 OF THE ACT. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF GARDE N SILK MILLS VS CIT 221 ITR 861 (GUJ) OBSERVED THAT THE CIT CANNOT SET ASIDE T HE ASSESSMENT ORDER PASSED BY THE AO GIVING EFFECT TO THE DIRECTIONS OF THE TR IBUNALS. IN THIS CASE, ON THE ISSUE OF DEDUCTION U/S 80IB10), THE ITAT HAS ALREAD Y GIVEN A DIRECTION TO THE AO 14 MADHAV CONSTRUCTION TO CONSIDER THE CLAIM OF THE ASSESSEE WITH REFERENC E TO THE PROVISIONS OF SECTION 80IB(10) AND HENCE, WE ARE OF THE CONSIDERE D VIEW THAT IT IS NOT WITHIN THE SCOPE AND POWERS OF THE COMMISSIONERS U/S 263 O F THE ACT. THEREFORE, WE ARE OF THE VIEW THAT THE ORDER PASSED BY THE AO IS NOT ERRONEOUS WITHIN THE MEANING OF SECTION 263 OF THE ACT. 15. HAVING SAID SO, LET US EXAMINE WHETHER THE ORDER PA SSED BY THE AO IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE PR INCIPAL CIT WAS OF THE OPINION THAT THE ASSESSMENT ORDER PASSED BY THE AO IS PREJU DICIAL TO THE INTEREST OF THE REVENUE AS THE AO HAS ALLOWED DEDUCTION CLAIMED U/S 80IB(10) EVEN THOUGH SUCH CLAIM WAS NOT MADE U/S 139 OR IN THE REVISED R ETURNS FILED U/S 153A OF THE ACT. THE PRINCIPAL CIT FURTHER WAS OF THE OPINION THAT ANY DEDUCTION CLAIMED U/S 80IB(10) IS ONLY ALLOWED WHEN SUCH CLAIM IS MA DE IN THE RETURN OF INCOME AS PER THE PROVISIONS OF SECTION 80A(5) OF THE ACT. IN THIS BACKGROUND, LET US EXAMINE WHETHER THE ASSESSEE IS ELIGIBLE FOR DEDUCT ION U/S 80IB(10) OR NOT. THERE IS NO DISPUTE WITH REGARD TO THE ENTITLEMENT OF DEDUCTION U/S 80IB(10) AS THE ASSESSEE HAS SATISFIED ALL THE CONDITIONS PRESC RIBED U/S 80IB(10) EXCEPT MAKING A CLAIM IN THE RETURN OF INCOME. THEREFORE, ONE HAS TO EXAMINE WHETHER DEDUCTION U/S 80IB(10) CAN BE ALLOWED EVEN THOUGH SUCH CLAIM IS NOT MADE IN THE RETURN OF INCOME. NO DOUBT, THE PROVIS IONS OF SECTION 80IB(10) R.W.S. 80A(5) MAKES IT MANDATORY TO MAKE SUCH CLAIM S IN THE RETURN OF INCOME 15 MADHAV CONSTRUCTION TO BE ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE AC T. SECTION 80IB(10) IS AN INCENTIVE PROVISION WHICH PROVIDES FOR DEDUCTION FO R PROFITS AND GAINS DERIVED FROM ELIGIBLE HOUSING PROJECTS ON FULFILLMENT OF CE RTAIN CONDITIONS PRESCRIBED. IN THIS CASE, THE ASSESSEE HAS FULFILLED ALL THE CO NDITIONS PRESCRIBED U/S 80IB(10) WHICH IS PROVED FROM THE FACT THAT NEITHER THE AO N OR THE PRINCIPAL CIT HAS NOT DISPUTED THE FACT THAT THE ASSESSEE IS NOT ELIGIBLE FOR CLAIMING DEDUCTION U/S 80IB(10) OF THE ACT. THE ONLY DISPUTE IS WITH REGA RD TO NON MAKING OF SUCH CLAIMS IN THE RETURNS OF INCOME. NO DOUBT, ANY INC ENTIVE OR BENEFICIAL PROVISIONS HAS TO BE INTERPRETED IN A MANNER SO AS TO ADVANCE THE ECONOMIC ACTIVITY OF THE REGION OR THE BUSINESS AND NOT TO D ENY THE BENEFIT OF SUCH DEDUCTION ON TECHNICAL GROUNDS, I.E. NON FILING OF RETURN OR NON CLAIMING OF SUCH BENEFIT IN THE RETURNS OF INCOME. THE ASSESSEE CLA IMS THAT WHEN ORIGINAL RETURNS OF INCOME FILED U/S 139(1) OR REVISED RETUR N FILED U/S 153A, THE ASSESSEE WAS NOT ELIGIBLE TO CLAIM DEDUCTION U/S 80IB(10) BE CAUSE THE COMMERCIAL AREA IN THE HOUSING PROJECT IS MORE THAN THE PRESCRIBED LIMIT PROVIDED U/S 80IB(10) OF THE ACT. BUT WHILE THE APPEALS WERE PENDING BEF ORE THE CIT(A), THE HONBLE HIGH COURT HAS RENDERED JUDGEMENT WHEREIN IT HAS B EEN HELD THAT SO FAR AS DEDUCTION U/S 80IB(10) IN RESPECT OF HOUSING PROJEC T WHICH HAS BEEN APPROVED BY THE APPROPRIATE AUTHORITY BEFORE 01-04-2005, THE LIMIT OF 5% OF THE BUILT UP AREA OR 2000 SQ.FT. WHICHEVER IS LESS IS NOT APPLIC ABLE AND THE ASSESSEE IS 16 MADHAV CONSTRUCTION ENTITLED FOR DEDUCTION U/S 80IB OF THE ACT. RELYIN G UPON THE JUDGEMENT OF THE JURISDICTIONAL HIGH COURT, THE ASSESSEE FILED AN AD DITIONAL GROUND OF APPEAL MAKING THE CLAIM BEFORE THE LD.CIT(A). THOUGH THE LD.CIT(A) DID NOT ALLOW THE CLAIM OF THE ASSESSEE, THE ITAT HAS ADMITTED THE AD DITIONAL GROUND FILED BY THE ASSESSEE AND DIRECTED THE AO TO EXAMINE THE OTHER CONDITIONS PRESCRIBED U/S 80IB(10). THE AO, AFTER SATISFYING WITH THE OTHER CONDITIONS, HAS ALLOWED THE CLAIM OF THE ASSESSEE TOWARDS DEDUCTION U/S 80IB(10 ) OF THE ACT. THEREFORE, WE ARE OF THE VIEW THAT THE CLAIM MADE BY THE ASSES SEE U/S 80IB(10) IS IN ACCORDANCE WITH LAW AND THE AO HAS RIGHTLY ALLOWED THE CLAIM MADE BY THE ASSESSEE. ACCORDINGLY, THE ORDER PASSED BY THE AO IS NOT PREJUDICIAL TO THE INTEREST OF THE REVENUE. 16. NOW IT IS PERTINENT TO DISCUSS THE CASE LAWS RELIED UPON BY THE ASSESSEE. THE ASSESSEE RELIED UPON THE DECISION OF HONBLE HI GH COURT OF MADRAS IN THE CASE OF CIT VS M/S ABHINITA FOUNDATION PVT LTD IN T CA NO.811 OF 2016 DATED 06-06-2017. THE HONBLE HIGH COURT OF MADRAS UNDER SIMILAR CIRCUMSTANCES, WHILE ANSWERING THE QUESTION RAISED BY THE REVENUE WITH REGARD TO THE CLAIM MADE U/S 80IB EVEN THOUGH THE ASSESSEE DID NOT MAKE ANY SUCH CLAIM IN THE RETURN OF INCOME AFTER CONSIDERING THE JUDGEMENTS R ENDERED BY THE SUPREME COURT IN GOETZ INDIA LTDS CASE AND NATIONAL THERMA L POWER CO LTDS CASE HELD THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80I B(10) EVEN IF THE CLAIM MADE 17 MADHAV CONSTRUCTION BY THE ASSESSEE DOES NOT FORM PART OF THE ORIGINAL RETURN OR EVEN IN THE REVISED RETURN. IT COULD STILL BE CONSIDERED IF THE RELEVA NT MATERIAL WAS AVAILABLE ON RECORD EITHER BY THE APPELLATE AUTHORITY. THE RELE VANT PORTION OF THE ORDER IS EXTRACTED BELOW:- W HAVE HEARD THE LEARNED COUNSEL FOR THE PARTIES A ND PERUSED E RECORD. 9.ACCORDING TO US, WHAT CLEARLY EMERGES UPON PERUSA L OF THE CORD AND, IN PARTICULAR, THE IMPUGNED JUDGMENT AND ORDER OF THE IBUNAL, IS AS FOLLOWS: I. THAT, IN THE ORIGINAL RETURN AS FILED BY THE ASS ESSEE COMPANY, NO CLAIM FOR DEDUCTION UNDER SECTION 80 LB (10) OF THE ACT HAD BEEN MADE. II. THAT THE ASSESSEE COMPANY, AS OBSERVED IN PARAG RAPH 3 OF THE IMPUGNED JUDGMENT AND ORDER OF THE TRIBUNAL, HAD MADE A CLAIM FOR DEDUCTION UNDER SECTION 80 LB (10) OF THE ACT AT THE STAGE, WHEN, THE ASSESSMENT PROCEEDINGS WERE ON. AT THAT POINT IN TIME, DETAILS WITH REGARD TO T HE PROJECT, QUA WHICH, CLAIM WAS MADE, WERE FILED ALON G WITH REQUISITE INFORMATION, IN THE PRESCRIBED FORMA T, I.E., FORM 1OCCB. III. THE CIT(A), EVEN WHILE RECOGNIZING THE FACT TH AT THE CLAIM 80 LB (10) OF THE ACT HAD BEEN ALLOWED BOTH IN THE PRECED ING AND SUCCEEDING YEARS, REJECTED THE SAME, SOLELY, ON THE GROUND THAT IT DID NOT FORM PART OF THE ORIGINAL RE TURN. 10.HAVING REGARD TO THE AFORESAID FACTS, WHAT IS RE QUIRED TO BE CONSIDERED IS : WHETHER THE CONCLUSION REACHED B Y THE TRIBUNAL THAT THE APPELLATE AUTHORITIES, (WHICH INC LUDED THE CIT (A) AND ITSELF), HAD THE NECESSARY POWER TO CONSIDER TH E CLAIM FOR DEDUCTION, IF, THE ASSESSEE COMPANY WAS OTHERWISE ENTITLED TO IN LAW, GIVEN THE FACT THAT THE RELEVANT MATERIAL WAS ALREADY AVAILABLE ON RECORD. 18 MADHAV CONSTRUCTION 11.MR.RAVIKUMAR, IN SUPPORT OF THE APPEAL, CONTENDED TO THE CONTRARY AND IN THIS BEHALF, PLACED GREAT EMPHA SIS ON THE JUDGMENT OF THE SUPREME COURT IN GOETZE'S CASE. A PERUSAL OF THE SAID JUDGMENT WOULD SHOW THAT THE IS SUE WHICH AROSE FOR CONSIDERATION BEFORE THE SUPREME CO URT, WAS, AS TO WHETHER A CLAIM FOR DEDUCTION COULD BE M ADE BY WAY OF A LETTER BEFORE THE ASSESSING OFFICER, IF , IT DID NOT FORM PART OF THE ORIGINAL RETURN. THE SUPREME COURT RULED AND, WHILE DOING SO, TO OUR MINDS, CAREFULLY NOTED THAT, THOUGH THE ASSESSING OFFICER DID NOT HAVE THE POWER TO ENTERTAIN THE CLAIM FOR DEDUCTION MADE AFTER THE RETURN WAS F ILED, OTHERWISE THAN BY FILING A REVISED RETURN, IT DID NOT EXCLUDE THE POWER OF THE TRIBUNAL TO CONSIDER T HE CLAIM IN EXERCISE OF ITS APPELLATE POWER UNDER SECTION 25 4 OF THE ACT. THIS ASPECT OF THE MATTER IS QUITE CLEARLY BRO UGHT TO LIGHT IN THE OPERATIVE PARAGRAPH OF THE JUDGMENT, I .E., PARAGRAPH 4. 11.1.FOR THE SAKE OF CONVENIENCE, THE SAID OBSERVAT IONS ARE EXTRACTED HEREAFTER: '4. THE DECISION IN QUESTION IS THAT THE POWER OF T HE TRIBUNAL UNDER S.254 OF THE IT ACT, 1961, IS TO ENTERTAIN FO R THE FIRST TIME A POINT OF LAW PROVIDED THE FACT ON THE BASIS OF WHIC H THE ISSUE OF LAW CAN BE RAISED BEFORE THE TRIBUNAL. THE DECISION DOES NOT IN ANY WAY RE/ATE TO THE POWER OF THE AG TO ENTERTAIN A CLAIM FOR DEDUCTION OTHERWISE THAN BY FL/MG A REVISED RETURN. IN THE CIRCUMSTANCES OF THE CASE, WE DISMISS THE CIVIL APP EAL. HOWEVER, WE MAKE IT CLEAR THAT THE ISSUE IN THIS CASE IS LIMITE D TO THE POWER OF THE ASSESS ING AUTHORITY A ND DOES NOT IMPINGE ON THE POWER OF THE TRIBUNAL UNDER S.254 OF THE IT ACT, 1961. THERE SHA LL BE NO ORDER AS TO COSTS.' (EMPHASIS IS OURS) 12.TO BE NOTED, THE SUPREME COURT, WHILE RENDERING ITS JUDGMENT IN THE CASE OF GOETZE, HAD NOTICED ITS OWN JUDGMENT IN NATIONAL TERMAL CO. LTD. VS CIT, (1998) 229 ITR 383 (SC). IN THE SAID CASE, THE SUPREME COURT WAS CALLED UPON TO ADJUDICATE AS TO WHETHER A CLAIM MAD E BY WAY OF A LETTER BEFORE THE TRIBUNAL FOR THE FIRST TIME COULD 19 MADHAV CONSTRUCTION HAVE BEEN ENTERTAINED BY THE TRIBUNAL. BRIEFLY, TH FACTS WHICH OBTAINED IN THE SAID CASE ARE AS FOLLOWS: 12.1.THE ASSESSEE, IN THAT CASE, HAD AVAILABLE WITH IT SURPLUS FUNDS, WHICH IT CHOSE TO DEPOSIT WITH BANKS ON A SHORT TERM BASIS. QU THE SAID SHORT TERM DEPOSITS, THE ASSESSEE EARNED INTEREST DURING TH RELEVANT PREVIOU S YEAR AMOUNTING TO RS 22,84,994/-. THE SAID INTEREST WAS OFFERED FOR LEVY TAX BY THE ASSESSEE, BASED ON WHICH, ASSCS SMER.: PROCEEDINGS WERE COMPLETED. THE ASSESSEE, HOWEVER, CHALLENGED THE ASSESSMENT ORDER BEFORE THE CIT (A) QUA GROUNDS OTHER THAN THE INCLUSION OF THE INTEREST EA RNED ON SHORT TERM DEPOSITS IN THE TOTAL INCOME. CONSEQU ENTLY THIS ASPECT OF THE MATTER WAS NOT CONSIDERED BY THE CIT (A) THE ASSESSEE, HOWEVER, CARRIED THE MATTER IN APPEAL TO THE TRIBUNAL. THE APPEAL, AS ORIGINALLY FILED WITH THE TRIBUNAL, DID NOT OBJECT TO THE INCLUSION OF INTEREST IN THE SUM OF RS.22,84,994/-. THE ASSESSEE, HOWEVER, AS INDICATED ABOVE, FOR THE FIRST TIME, BY WAY OF A LETTER DATED 16.07. 1983, RAISED ADDITIONAL GROUNDS, WHEREBY, A CHALLENGE WAS LAID TO THE INCLUSION OF INTEREST IN THE TOTAL INCOME. T HE BASIS OF THE CHALLENGE WAS THAT, SINCE, THE SUM OF RS.22,84, 994/- HAD BEEN DEDUCTED FROM THE EXPENDITURE INCURRED DURING CONSTRUCTION PERIOD, IT COULD NOT HAVE BEEN INCLUDE D IN THE TOTAL INCOME. 12.2.THE SUPREME COURT, AFTER EXAMINING THE MATTER THREADBARE, MADE THE FOLLOWING OBSERVATIONS: 'UNDER SECTION 254 OF THE INCOME-TAX ACT, THE APPEL LATE TRIBUNAL MAY AFTER GIVING BOTH THE PARTIES TO THE APPEAL AN OPPORTUNITY OF BEING HEARD, PASS SUCH ORDERS THEREON AS IT THINKS FIT. THE POWER OF THE TRIBUNAL IN DEALING WITH APPEALS IS THUS EXPRES SED IN THE WIDEST POSSIBLE TERMS. THE PURPOSE OF THE ASSESSMEN T BEFORE THE TAXIG AUTHORITIES IS TO ASSESS. CORRECTL Y THE TAX LIABILITY OF AN ASSESSEE IN ACCORDANCE WITH LAW. IF FOR EXAMPLE, AS A RESULT OF A JUDICIAL DECISION GIVEN WHILE THE APPEA L IS PENDING BEFORE THE TRIBUNAL IT IS FOUND THAT A NON-TAXABLE ITEM I S TAXED OR A PERMISSIBLE DEDUCTION IS DENIED, WE DO NOT SEE ANY REASON WHY THE ASSESSEE SHOULD BE PREVENTED FROM RAISING THAT QUESTION BEFORE THE TRIBUNAL FOR THE FIRST TIME, SO LONG AS THE RELEVANT FACTS ARE ON RECORD IN RESPECT OF THAT ITEM. WE DO NOT SEE ANY REASON TO 20 MADHAV CONSTRUCTION RESTRICT THE POWER OF THE TRIBUNAL UNDER SECTION 25 4. ONLY TO DECIDE THE GROUNDS WHICH ARISE FROM THE ORDER OF THE COMM ISSIONER OF INCOME-TAX (APPEALS). BOTH THE ASSESSEE AS WELL AS THE DEPARTMENT HAVE A RIGHT TO . FILE AN APPEAL/CROSS-OBJECTIONS BEFORE THE TRIBUNA L. WE FAIL TO SEE WHY THE TRIBUNAL SHOULD BE PREVENTED FROM CONSIDERING QUESTIONS OF LAW ARISING IN ASSESSMENT PROCEEDINGS ALTHOUGH NOT RAISED EARLIER. IN THE CASE OF JUTE CORPORATION OF_INDIA LTD V. CIT (191). 187 ITR 688, THIS COURT, WHILE DEALING WITH THE POWERS OF THE APPELLATE ASSISTANT COMMISSIONER OBSERVED THAT AN A PPELLATE AUTHORITY HAS ALL THE POWERS WHICH THE ORIGINAL AUT HORITY MAY HAVE IN DECIDING THE QUESTION BEFORE IT SUBJECT TO THE R ESTRICTIONS OR LIMITATIONS. IF ANY, PRESCRIBED BY THE STATUTORY PR OVISIONS. IN THE ABSENCE OF ANY STATUTORY PROVISION THE APPELLATE AU THORITY IS VESTED WITH ALL THE PLENARY POWERS WHICH THE SUBORDINATE A UTHORITY MAY HAVE IN THE MATTER. THERE IS NO GOOD REASON TO JUSTIFY CURTAILMENT OF THE POWER OF THE APPELLATE ASSISTANT COMMISSIONE R IN ENTERTAINING AN ADDITIONAL GROUND RAISED BY THE ASS ESSEE IN SEEKING MODIFICATION OF THE ORDER OF ASSESSMENT PASSED BY T HE INCOME-TAX OFFICER. THIS COURT FURTHER OBSERVED THAT THERE MAY BE SEVERAL FACTORS JUSTIFYING THE RAISING OF A NEW PLEA IN AN APPEAL AND EACH CASE HAS TO BE CONSIDERED ON ITS OWN FACTS. THE APP ELLATE ASSISTANT COMMISSIONER MUST BE SATISFIED THAT THE GROUND RAIS ED WAS BONA FIDE AND THAT THE SAME COULD NOT HAVE BEEN RAISED EARLIE R FOR GOOD REASONS. THE APPELLATE ASSISTANT COMMISSIONER SHOUL D EXERCISE HIS DISCRETION IN PERMITTING OR NOT PERMITTING THE ASSE SSEE TO RAISE AN ADDITIONAL GROUND IN ACCORDANCE WITH LAW AND REASON . THE SAME OBSERVATIONS WOULD APPLY TO APPEALS BEFORE THE TRIB UNAL ALSO. THE VIEW THAT THE TRIBUNAL IS CONFINED ONLY TO ISSU ES ARISING OUT OF THE APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX (APPEA LS) TAKES TOO NARROW A VIEW OF THE POWERS OF THE APPELLATE TRIBUN AL (VIDE, E.G., CIT V. ANAND PRASAD (1981) 128 ITR 388 (DELHI), CIT V. KARAMCHAND PREMCHAND P. LTD. (1969) 74 ITR 254 (GUJ) AND CIT V . CELLULOSE PRODUCTS OF INDIA LTD. (1985) 151 ITR 499 (GUJ) (FB ). UNDOUBTEDLY, THE TRIBUNAL WILL HAVE THE DISCRETION TO ALLOW OR NOT A LLOW NEW GROUND TO BE RAISED. BUT WHERE THE TRIBUNAL IS ONLY RECJUIRED TONSIDER A QUESTION 21 MADHAV CONSTRUCTION OF LAW ARISING FROM THE FACTS WHICH ARE ON RECORD I N THE ASSESSMENT PROCEEDINGS WE FAIL TO TO SEE WHY SUCH A QUESTION S HOULD NOT BE ALLOWED TO BE RAISED WHEN IT IS NECESSARY TO CONSID ER THAT QUESTION IN ORDER TO CORRECTLY ASSESS THE TAX LIABI LITY OF AN ASSESSEE. (EMPHASIS IS OURS) 12.3.IN THE SAID JUDGMENT, THE SUPREME COURT ALSO N OTICED ITS OWN JUDGMENT IN THE CASE OF JUTE CORPORATION OF INDIA LTD. V. CIT (1991) 181 ITR 688. THIS VIEW HAS BEEN ADOPTED BY TWO DIVISION BENCHES OF THIS COURT IN TH E MATTER OF RAMCO CEMENTS LTD. VS. DOT (2015) 55 TAXMANN.COM 79 (MADRAS) AND, IN THE JUDGMENT RENDERED IN: T.C. (A) NO.878 OF 2014 DATED 18.11.2014, TITLED CI T VS. MALIND LABORATORIES P. LTD. AS A MATTER OF FACT, THE DELHI HIGH COURT HAS ALSO, IN TWO SEPARATE JUDGMENT S, COME TO THE SAME CONCLUSION. THESE JUDGMENTS ARE RENDERED IN: CIT VS. SAM GLOBAL SECURITIES LTD., (2013) 38 TAXMANN.COM 129 (DELHI) AND CIT VS. JAI PARABOLIC SPRINGS LTD., (2008) 306 ITR 42 (DELHI). 12.4.FURTHERRNORE, A DIVISION BENCH OF THE BOMBAY H IGH COURT HAS ALSO TAKEN THE SAME VIEW IN THE JUDGMENT RENDERED IN CIT VS. PRUTHVI BROKERS & SHAREHOLDERS P. LTD., (2012) 349 ITR 336 16 (BOM.). THE ISSUE, WITH WHICH, THE BOMBAY HIGH COURT WAS GRAPPLING WAS, THAT A CLA IM FOR DEDUCTION UNDER SECTION 43B OF THE ACT HAD NOT BEEN MADE QUA THE RELEVANT ASSESSMENT YEAR IN THE ORIGINAL RE TURN BUT WAS MADE VIA A LETTER. THE DIVISION BENCH OF TH E BOMBAY HIGH COURT HELD EVEN WHILE ASSUMING AND, IN THAT SENSE, ACCEPTING THE ARGUMENT OF THE REVENUE, THAT THOUGH, AN AMENDMENT TO THE ORIGINAL RETURN COULD N OT BE MADE BY FILING A LETTER - IT WOULD BE OPEN TO THE A PPELLATE AUTHORITIES TO CONSIDER THE CLAIM AND ADJUDICATE UP ON THE SAME. IN THIS BEHALF, THE BOMBAY HIGH COURT MADE TH E FOLIOWING OBSERVATIONS: 14. A LONG LINE OF AUTHORI TIES ESTABLISH CLEARLY THAT AN ASSESSEE IS ENTITLED TO RAISE ADDITIONAL GROUNDS NOT MERELY IN TERMS OF LEGAL SUBMISSIONS, BUT ALSO ADDITIONAL CLAIMS NOT MADE IN THE RETURN FILED BY IT. IT IS NECESSARY FOR US TO REFER TO SOME OF THESE DECISIONS ONLY TO DEAL WITH TWO SUBMISSION S ON BEHALF OF THE DEPARTMENT. THE FIRST IS WITH RESPECT TO AN 22 MADHAV CONSTRUCTION OBSERVATION OF THE SUPREME COURT IN JUTE CORPORATIO N OF INDIA LIMITED V. COMMISSIONER OF INCOME TAX, 1991 SUPP (2 ) SCC 744 = (1991) 187 ITR 688. THE SECOND SUBMISSION IS BASED ON A JUDGMENT OF THE SUPREME COURT IN GOETZE (INDIA) LIM ITED V. COMMISSIONER OF INCOME TAX, (2006) 157 TAXMAN 1. (A). IN JUTE CORPORATION OF INDIA LIMITED V. CIT, F OR THE ASSESSMENT YEAR 1974-75 THE APPELLANT DID NOT CLAIM ANY DEDUCT ION OF ITS LIABILITY TOWARDS PURCHASE TAX UNDER THE PROVISIONS OF THE BENGAL RAW JUTE TAXATION ACT, 1941, AS IT ENTERTAINED A BE LIEF THAT IT WAS NOT LIABLE TO PAY PURCHASE TAX UNDER THAT ACT. SUBSEQUE NTLY, THE APPELLANT WAS ASSESSED TO PURCHASE TAX AND THE ORDE R OF ASSESSMENT WAS RECEIVED BY IT ON 23RD NOVEMBER, 197 3. THE APPELLANT CHALLENGED THE SAME AND OBTAINED A STAY O RDER. THE APPELLANT ALSO FILED AN APPEAL FROM THE ASSESSMENT ORDER UNDER THE INCOME TAX ACT. IT WAS ONLY DURING THE HEARING OF T HE APPEAL THAT THE ASSESSEE CLAIMED AN ADDITIONAL DEDUCTION IN RES PECT OF ITS LIABILITY TO PURCHASE TAX. THE APPELLATE ASSISTANT COMMISSIONER (AAC) PERMITTED IT TO RAISE THE CLAIM AND ALLOWED T HE DEDUCTION. THE TRIBUNAL HELD THAT THE AAC HAD NO JURISDICTION TO ENTERTAIN THE ADDITIONAL GROUND OR TO GRANT RELIEF ON A GROUND WH ICH HAD NOT BEEN RAISED BEFORE THE INCOME TAX OFFICER. THE TRIB UNAL ALSO REFUSED THE APPELLANT APPLICATION FOR MAKING A REFE RENCE TO THE HIGH? COURT. THE HIGH COURT UPHELD THE DECISION OF THE TRIBUNAL AND REFUSED TO CALL FOR A STATEMENT OF CASE. IT IS IN T HESE CIRCUMSTANCES THAT THE APPELLANT FILED THE APPEAL BEFORE THE SUPR EME COURT. 15. THE SUPREME COURT HELD AS UNDER (PAGE 693) :- 'IN CIT V. KANPUR COAL SYNDICATE, A THREE JUDGE BEN CH OF THIS COURT DISCUSSED THE SCOPE OF SECTION 31(3)(A) OF TH E INCOME TAX ACT 1922 WHICH IS ALMOST IDENTICAL TO SECTION 251(1 )(A). THE C01111 HELD AS UNDER : (1TR P. 229) 'IF AN APPEAL LIES, SECTION 31 OF THE ACT DESCRIBES THE POWERS OF THE APPELLATE ASSISTANT COMMISSIONER MAY, IN THE CA SE OF AN 23 MADHAV CONSTRUCTION ORDER OF ASSESSMENT, CONFIRM, REDUCE, ENHANCE OR AN NUL THE ASSESSMENT; UNDER CLAUSE (B) THEREOF HE MAY SET ASI DE THE ASSESSMENT AND DIRECT THE INCOME TAX OFFICER TO MAK E A FRESH ASSESSMENT. UNDER 5ECTIUII 31 ( 3 )( A ) IN DISPOSING OF SUCH AN APPEAL THE APPELLATE ASSISTANT COMMISSIONER MAY, IN THE CASE OF AN ORDER OF ASSESSMENT, CONFIRM, REDUCE, ENHANCE OR ANNUL THE ASSESSMENT; UNDER CLAUSE (B) THEREOF HE MAY SET ASI DE THE ASSESSMENT AND DIRECT THE INCOME TAX OFFICER TO MAK E FRESH ASSESSMENT. THE APPELLATE ASSISTANT COMMISSIONER H AS, THEREFORE, PLENARY POWERS IN DISPOSING AN APPEAL. THE SCOPE OF HIS POWER IS CO-TERMINUS WITH THAT OF THE INCOME-TAX OFFICER. HE CAN DO WHAT THE INCOME-TAX OFFICER CAN DO AND A/SO DIRECT HIM TO DO WHAT HE HAS FAILED TO DO. ' (EMPHASIS SUPPLIED) THE ABOVE OBSERVATIONS ARE SQUARELY APPLICABLE TO T HE INTERPRETATION OF SECTION 251(1) ( A ) OF THE ACT. THE DECLARATION OF LAW IS C/EAR THAT THE POWER OF THE APPELLATE ASSIS TANT COMMISSIONER IS CO-TERMINUS WITH THAT OF THE INCOME -TAX OFFICER, IF THAT BE SO. THERE APPEARS TO BE NO REAS ON AS TO WHY THE APPELLATE AUTHORITY CANNOT MODIFY THE ASSESSMEN T ORDER ON AN ADDITIONAL GROUND EVEN IF NOT RAISED BEFORE T HE INCOME TAX OFFICER. NO EXCEPTION COULD BE TA,KCN TO THIS VIEW AS THE ACT DOES NOT PLACE ANY RESTRICTRION OR LIMITATION ON THE EX ERCISE OF APPELLATE POWER. EVEN OTHERWISE AN APPELLATE AUTHORITY , WHILE HEARING APPEAL AGAINST THE ORDER OF A SUBORDINATE AUTHORITY HAS ALL THE POWERS WHICH THE ORIGINAL AUTHORITY MAY HAVE IN DECIDING Q UESTION BEFORE IT SUBJECT TO THE RESTRICTIONS OR LIMITATIONS, IF ANY PRESCRIBED BY THE STATUTORY PROVISIONS. IN THE ABSENCE OF ANY STATUT ORY PROVISION THE APPELLATE AUTHORITY IS VESTED WITH ALL THE PLENARY POWERS WHICH THE SUBORDINATE AUTHORITY MAY HAVE IN THE MATTER. THER E APPEARS TO BE NO GOOD REASON AND NONE WAS PLACED BEFORE US TO JUS TIFY CURTAILMENT OF THE POWER OF THE APPELLATE ASSISTANT COMMISSIONE R IN ENTERTAINING AN ADDITIONAL GROUND RAISED BY THE ASSESSEE IN SEEK ING MODIFICATION OF THE ORDER OF ASSEWSSMENT PASSED BY THE INCOME TAX O FFICER. [EMPHASIS SUPPLIED] B) IT IS CLEAR, THEREFORE, THAT AN ASSESSEE IS ENTI TLED TO RAISE NOT MERELY ADDITIONAL LEGAL SUBMISSIONS BEFORE THE APPE LLATE AUTHORITIES, BUT IS ALSO ENTITLED TO RAISE ADDITION AL CLAIMS BEFORE 24 MADHAV CONSTRUCTION THEM. THE APPELLATE AUTHORITIES HAVE THE DISCRETIO N WHETHER OR NOT TO PERMIT SUCH ADDITIONAL CLAIMS TO BE RAISED. IT CANNOT, HOWEVER, BE SAID THAT THEY HAVE NO JURISDICTION TO CONSIDER THE SAME. THEY HAVE THE JURISDICTION TO ENTERTAIN THE NEW CLAIM. THAT THEY MAY CHOOSE NOT TO EXERCISE THEIR JURISDICTION IN A GIVE N CASE IS ANOTHER MATTER. THE EXECISE OF DISCRETION IS ENTIRELY DIFF ERENT FROM THE EXISTENCE O JURISDICTION. 16. AT PAGE 694, AFTER REFERRING TO CERTAIN OBSERVATION S OF THE SUPREME COURT IN ADDITIONAL COMMISSIONER OF INCOME- TAX V. GUTJARGRAVURES P. LTD., (1978) 111 ITR 1, THE SUPRE ME COURT OBSERVED AT PAGE 694 AS UNDER.- '77 , THE ABOVE OBSERVATION DO NOT RULE OUT A CASE OR RAISING AN ADDITIONAL GROUND BEFORE THE APPELLATE ASSISTANT COMMISSIONER IF THE GROUND SO RAISED COUL D NOT HAVE BEEN RAISED AT THE PARTICULAR STAGE WHEN THE R ETURN WAS FILED OR WHEN THE ASSESSMENT ORDER WAS MADE, OR THA T THE ADDITIONAL GROUND BECAME AVAILABLE ON ACCOUNT OF CH ANGE OF CIRCUMSTANCES OR LAW. THERE MAY BE SEVERAL FACTORS JUSTIFYING RAISING OF SUCH NEW PLEA IN APPEAL, AND EACH CASE H AS TO BE CONSIDERED ON ITS OWN FACTS. IF THE APPELLATE ASSI STANT COMMISSIONER IS SATISFIED HE WOULD BE ACTING WITHIN HIS JURISDICTION IN CONSIDERING THE QUESTION SO RAISED IN ALL ITS ASPECTS. OF COURSE, WHILE PERMITTING THE ASSESSEE TO RAISE AN ADDITIONAL GROUND, THE APPELLATE ASSISTANT COMMISSI ONER SHOULD EXERCISE HIS DISCRETION IN ACCORDANCE WITH L AW AND REASON. HE MUST BE SATISFIED THAT THE GROUND RAISE D WAS BONA FIDE AND THAT THE SAME COULD NOT HAVE BEEN RAI SED EARLIER FOR GOOD REASONS. THE SATISFACTION OF THE APPELLATE ASSISTANT COMMISSIONER DEPENDS UPON THE FACTS AND CIRCUMSTANCES OF EACH CASE AND NO RIGID PRINCIPLES OR ANY HARD AND FAST RULE CAN BE LAID DOWN FOR THIS PURPOSE.[EMPHASIS SUPPLIED] 17. THE UNDERLINED OBSERVATIONS IN THE ABOVE PASSA GE DO NOT CURTAIL THE AMBIT OF THE JURISDICTION OF THE APPELL ATE AUTHORITIES STIPULATED EARLIER. THEY DO NOT RESTRICT THE NEW / ADDITIONAL GROUNDS THAT MAY BE TAKEN BY THE ASSESSEE BEFORE THE APPELLATE AUTHORITIES TO THOSE THAT WERE NOT AVAILABLE WHEN THE RETURN WAS FILED OR EVEN WHEN THE ASSESSMENT ORDER WAS MADE. THE SENTEN CE READ AS A WHOLE ENTITLES AN ASSESSEE TO RAISE NEW GROUNDS/MAK E ADDITIONAL 25 MADHAV CONSTRUCTION CLAIMS:- 'IF THE GROUND SO RAISED COULD NOT HAVE BEEN RAISED AT THAT PARTICULAR STAGE WHEN THE RETURN WAS FILED OR WHEN THE ASSESSMENT ORDER WAS MADE.....' 'OR'IF ''THE GROUND BECAME AVAILABLE ON ACCOUNT OF CHANGE OF CIRCUMSTANCES OR LAW. 18. THE APPELLATE AUTHORITIES, THEREFORE, HAVE JUR ISDICTION TO DEAL NOT MERELY WITH ADDITIONAL GROUNDS, WHICH BECAME AVAILA BIE ON ACCOUNT OF CHANGE OF CIRCUMSTANCES OR LAW, BUT WITH ADDITIONAL. GROUNDS WHICH WERE AVAILABLE WHEN THE RETURN WAS FI LED. THE FIRST PART VIZ. 'IF THE GROUND SO RAISED COULD NOT HAVE B EEN RAISED AT THAT PARTICULAR STAGE WHEN THE RETURN WAS FILED OR WHEN THE ASSESSMENT ORDER WAS MADE...' CLEARLY RELATE TO CASES WHERE TH E GROUND WAS AVAILABLE WHEN THE RETURN WAS FILED AND THE ASSESSM ENT ORDER WAS MADE BUT 'COULD NOT HAVE BEEN RAISED' AT THAT STAGE . THE WORDS ARE 'COULD NOT HAVE BEEN RAISED' AND NOT 'WERE NOT IN EXISTENCE'. GROUNDS WHICH WERE NOT IN EXISTENCE WHEN THE RETURN WAS FILED OR WHEN THE ASSESSMENT ORDER WAS MADE FALL WIT/I/TI TH E SECOND CATEGORY VIZ, WHERE 'THE GROUND BECAME AVAILABLE ON ACCOUNT OF CHANGE OF CIRCUMSTANCES OR LAW.' (EMPHASIS IS OURS) 12.5. A READING OF THE AFORESAID OBSERVATIONS WOULD CK ESTABLISH THAT THE ARGUMENTS ADVANCED BY MR. RAVI T HAT THE ASSE COMPANY COULD ONLY RAISE AN ADDITIONAL GROUND AND NOT MAKE A CLAIM OR ADDITIONAL CLAIM IS NOT SUSTAIN ABLE. AS INDICATED BY US HEREINABOVE, THIS POWER OF ENTERTAINING THE CLAIM VESTS WITH THE APPELLATE AU THORITIES BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE. T HE POWER OF THE APPELLATE AUTHORITIES TO CONSIDER CLAIMS MADE BASED ON MATERIAL ALREADY ON RECORD IS CO-TERMINUS WITH THE POWER OF THE ASSESSING OFFICER. THE FAILURE TO ADVERT TO THE CLAIM IN THE ORIGINAL RETURN OR THE REVISED RETURN CANNOT DENUDE THE APPELLATE AUTH ORITIES OF THEIR POWER TO CONSIDER THE CLAIM, IF, THE RELEVANT MATER IAL IS AVAILABLE ON RECORD AND IS OTHERWISE TENABLE IN LAW. ANY OTHER V IEW, IN OUR OPINION, WILL SET AT NAUGHT THE PLENARY POWERS OF A PPELLATE 26 MADHAV CONSTRUCTION AUTHORITIES. 13.THE JUDGMENT OF THE DIVISION BENCH OF THIS COURT RENDERED IN T.C. (A) NO.344 OF 2005, DATED 16.06.2011, TITLED CIT VS . M/S.SHRIRARN INVESTMENTS, WHICH IS RELIED UPON BY THE LEARNED COUNSEL FOR THE REVENUE, IS CLEARLY DISTINGUISHABLE , AS IN THAT CASE, THE ASSESSEE HAD SOUGHT ASSESSMENT OF TAX BY DISCLOSING A LOWER TAXABLE INCOME, ALBEIT BY FILING A SECOND REVISED RETURN. I T IS IN THAT CONTEXT THAT THE DIVISION BENCH CAME TO THE CONCLUS ION THAT THE SECOND REVISED RETURN, WHICH WAS FILED BEYOND THE P ERIOD OF LIMITATION, BEING NON EST IN LAW, WOULD NOT BE CONS IDERED FOR THE PURPOSES OF ASCERTAINING THE TAXABLE INCOME. 14.IN SO FAR AS THE JUDGMENT OF THE SUPREME COURT I N THE MATTER OF STEPWELL IS CONCERNED, ACCORDING TO US, IT HAS NO APPLICABIL ITY TO THE ISSUE RAISED IN THE INSTANT APPEAL. IN THAT CASE, THE TRIBUNAL APPEARS TO HAVE ALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER S 35B OF THE ACT WITHOUT EXAMIN ING THE FACTS OF THE CASE. THE ASSESSEE EVIDENTLY, HAD NEIT HER MADE A CLAIM BEFORE THE ITO NOR THE AAC NOR HAD HE, FUR NISHED PARTICULARS OF THE EXPENDITURE INCURRED BY IT. IT I S IN THIS CONTEXT THAT THE SUPREME COURT OBSERVED THAT THE ON US OF PROVING FACTS AND OBTAINING THE BENEFIT OF A DEDUCT ION LAY ON THE ASSESSEE. IT WAS FURTHER OBSERVED THAT SINCE T HE ASSESSEE FAILED TO PROVE ITS CLAIM BEFORE THE ITO O R THE AAC, THE TRIBUNAL COULD NOT HAVE ALLOWED THE CLAIM ON AS SUMPTION OF FACTS. 15. AS INDICATED ABOVE, THE RATIO ON THE SAID JUDGM ENT IS ENTIRELY DIFFERENT AND THEREFORE, HAS NO APPLICABI LITY TO THE FACTS OF THE INSTANT CASE. 16.SIMILARLY, THE JUDGMENT OF THE ALLAHABAD HIGH CO URT IN MATTER OF G.S. RICE MILLS IS DISTINGUISHABLE, INASMUCH AS THE ASSES HAD NEITHER MADE A CLAIM BEFORE THE ITO NOR W AS ANY MATERIAL PLACE ON RECORD IN SUPPORT OF THE CLAIM. T HE HIGH COURT, IN THIS CONTEXT, HE THAT THE TRIBUNAL WAS NO T JUSTIFIED IN ENTERTAINING THE CLAIM MADE UNDER SECT ION 8OG OF THE ACT AND THEREUPON, ISSUING A CONSEQUENT DIRECTION TO THE ITO TO EXAMINE THE SAME ON MERITS. 27 MADHAV CONSTRUCTION 16.1,AS WOULD HE EVIDENT FROM THE NARRATION OF FACT S SET OUT ABOVE, IN THE PRESENT CASE, THE TRIBUNAL HAS NO TED THAT RELEVANT MATERIAL WAS PLACED BY THE ASSESSEE COMPANY BEFORE THE ASSESSING OFFICER DURING THE COU RSE OF THE ASSESSMENT PROCEEDINGS. THEREFORE, IN OUR VIEW, THE SAID JUDGMENT IS ALSO DISTINGUISHABLE. 17. A SIMILAR SITUATION AROSE IN THE CASE OF ACIT VS. GURJARGRAVURES P. LTD. IN THIS CASE AS WELL, IT WAS NOTICED THAT NEITHER WAS ANY CLAIM MADE BEFORE THE ITO NOR WAS ANY SUPPORTING MATERIAL PLACED ON RECORD. IT IS IN THIS BACKGROUND THAT NO RELIEF WAS GRANTED. THE SUPREME COURT, IN THIS CASE, DISAGREED WITH THE HIGH COURT, INASMUCH AS IT SUSTAINED THE DIRECTION OF THE TRIBU NAL ISSUED TO THE ITO TO GRANT APPROPRIATE RELIEF QUA CLAIM MA DE UNDER SECTION 84 OF THE ACT. 18.IN SUM, WHAT EMERGES FROM A PERUSAL OF THE RATIO OF THE JUDGMENTS CITED ABOVE, IN PARTICULAR, THE JUDGM ENTS RENDERED BY THE SUPREME COURT IN GOETZL-'S CASE AND NATIONAL THERMAL POWER CO. LTDS CASE, AND THOSE, R ENDERED BY THE DIVISION BENCH OF THIS COURT IN RAMCO CEMENT S LTD. AND CIT VS MALIND LABORATORIES P. LTD., AS THE JUDG MENTS OF THE DELHI HIGH COURT IN SAM GLOBAL SECURIT LTD.'S CASE AND JAI PARABOLIC SPRINGS LTD.'S CASE, THAT, EVEN IF, THE CLAIM MADE BY THE ASSESSEE COMPANY DOES NOT FORM PART OF ORIGINAL RETURN OR EVEN THE REVISED RETURN, IT COULD STILL BE CONSIDERED IF, THE RELEVANT MATERIAL WAS A VAILABLE ON RECORD, EITHER BY APPELLATE AUTHORITIES, (WHICH INCLUDES BOTH THE CIT (A) AND TRIBUNAL) BY THEMSELV ES, OR ON REMAND, BY THE ASSESSING OFFICER. IN THE INSTAN T CASE, THE TRIBUNAL, ON PERUSAL OF THE RECORD, FOUND THAT RELEVANT MATERIAL QUA THE CLAIM MADE BY THE ASSESSEE CORNPAN Y UNDER SECTION 80 LB (10) OF THE ACT WAS PLACED ON RECORD BY THE ASSESSEE COMPANY DURING THE ASSESSMENT PROCEEDINGS AND THEREFORE, IT DEEMED IT FIT TO DIRECT ITS REEXAMINA TION BY THE 28 MADHAV CONSTRUCTION ASSESSING OFFICER. 17. THE ASSESSEE ALSO RELIED UPON THE DECISION OF HONB LE BOMBAY HIGH COURT IN THE CASE OF CIT VS PRITHVI BROKERS AND SHAREHOLD ERS PVT LTD (SUPRA). THE HONBLE HIGH COURT UNDER SIMILAR SET OF FACTS AND C IRCUMSTANCES HELD THAT EVEN ASSUMING THAT THE AO IS NOT ENTITLED TO GRANT A DE DUCTION ON THE BASIS OF A LETTER REQUESTING AN AMENDMENT TO THE RETURN FILED, THE APPELLATE AUTHORITIES ARE ENTITLED TO CONSIDER THE CLAIM AND ADJUDICATE T HE SAME. IT IS NOT NECESSARY THAT THE DEDUCTION BE ALLOWED ONLY IF THE REVISED R ETURN OF INCOME WOULD HAVE BEEN FILED. THE RELEVANT PORTION OF THE JUDGEMENT IS EXTRACTED BELOW:- EVEN ASSUMING THAT THE ASSESSING OFFICER IS NOT ENT ITLED TO GRANT A DEDUCTION ON THE BASIS OF A LETTER REQUESTING AN AMENDMENT TO THE RETURN FLIED, THE APPELLATE AUTHORITIES ARE ENT ITLED TO CONSIDER THE CLAIM AND TO ADJUDICATE THE SAME. A LO NG LINE OF AUTHORITIES ESTABLISH CLEARLY THAT AN ASSESSEE IS E NTITLED TO RAISE ADDITIONAL GROUNDS NOT MERELY III TERMS OF LEGAL SU BMISSIONS, BUT ALSO ADDITIONAL CLAIMS TO WIT CLAIMS NOT MADE IN TH E RETURN FILED BY IT. IT IS NECESSARY TO REFER TO SOME OF THESE DE CISIONS ONLY TO DEAL WITH SUBMISSIONS ON BEHALF OF THE DEPARTMENT. THE FIRST IS WITH RESPECT TO AN OBSERVATIONS OF THE SUPREME COUR T ILL JUTE CORPORATION OF INDIA LIMITED V. COMMISSIONER OF INC OME TAX. IN MANY OF THE CASES, THE GROWN /S WERE, IN FACT, AVAI LABLE WHEN THE RETURN WAS FILED AND/OR THE ASSESSMENT ORDER WAS MA DE. IN JUTE CORPORATION OF INDIA LID, CASE FOR INSTANCE, THE GR OUND WAS AVAILABLE WHEN THE RETURN WAS FILED. THE ASSESSEE D ID NOT CLAIM ANY DEDUCTION OF ITS LIABILITY TO PAY PURCHASE TAX AS ' IT ENTERTAINED A BELIEF THAT IT WAS NOT LIABLE TO PAY PURCHASE TAX U NDER THE BENGAL RAW JUTE TAXATION ACT, 1941 '. THUS, THE GROUND EXI STED WHEN THE RETURN WAS FILED. THE ASSESSMENT ORDER WAS EVEN MAD E , AND RECEIVED BY THE ASSESSEE. IT IS ONLY AFTER THE APPE AL WAS FILED THAT 29 MADHAV CONSTRUCTION THE ASSESSEE CLAIMED A DEDUCTION IN RESPECT OF THE AMOUNT PAID TOWARDS THE PURCHASE TAX UNDER THE SAID ACT. THE SU PREME COURT UPHELD THE DECISION OF THE APPELLATE ASSISTANT COMM ISSIONER IN ALLOWING THE DEDUCTION. (PARA 7, 10, 11 & 14) IT IS INDEED A QUESTION OF EXERCISE OF DISCRETION W HETHER OR NOT TO ALLOW AN ASSESSEE TO RAISE A CLAM; WHICH WAS NOT RA ISED WHEN THE RETURN WAS FILED OR THE ASSESSMENT ORDER WAS MADE. AS HELD BY THE SUPREME COURT THERE MA Y BE SEVERAL FACTORS JUSTIFYING THE RAISING OF A NEW PLEA IN APPEAL AND EACH CASE MUST BE CONSIDERED ON ITS OWN FACTS. HOWEVER SUCH CASES INCLUDE THOSE, WHERE THE GROUND THOUGH AVAILABLE WHEN THE RETURN WAS FILED OR THE ASSESSME NT ORDER WAS MADE, U' IS NOT TAKEN OR RAISED FOR REASONS WHICH T HE APPELLATE AUTHORITIES MAY CONSIDER VALID. IN OTHER WORDS, THE JURISDICTION OF I/U APPELLATE AUTHORITIES TO CONSIDER AFRESH OR NEW GROUND OR CLAIM IS NOT RESTRICTED TO CASES WHERE SUCH A GROUND DID NOT EXIST WHEN THE RETURN WAS FILED AND THE ASSESSMENT ORDER WAS MADE. (PAR 15) IN THE PRESENT CASE, THE CIT(A) AND THE TRIBUNAL HA VE HELD THAT THE OMISSION TO CLAIM THE DEDUCTION OF RS.40,00,0001- T O BE INADVERTENT. BOTH THE APPELLATE AUTHORITIES HELD, AFTER CONSIDER ING ALL THE FACTS, THAT THE ASSESSEE HAD INADVERTENTLY CLAIMED A DEDUC TION OF RS.20,00,0001- PAID AFTER THE END OF THE YEAR IN QU ESTION. THERE IS NO REASON TO INTERFERE WITH THIS FINDING. THERE IS LES S REASON TO INTERFERE WITH THE EXERCISE OF DISCRETION BY THE APPELLATE AU THORITIES IN PERMITTING THE RESPONDENT TO RAISE THIS CLAIM. THAT THE RESPONDENT IS ENTITLED TO THE DEDUCTION IN LAW IS ADMITTED AND , IN ANY EVENT, CLEARLY ESTABLISHED. THE CONCLUSION THAT THE ERROR IN NOT CLAIMING THE DEDUCTION IN THE RETURN OF INCOME WAS INADVERTE NT CANNOT BE FAULTED FOR MORE THAN ONE REASON. IT IS A FINDING O F FACT WHICH CANNOT BE TERMED PERVERSE. THERE IS NOTHING ON RECO RD THAT MILITATES AGAINST THE FINDING. (PAR 20 &.21) IT WAS SUBMITTED BY COUNSEL FOR THE APPELLANT THAT THE SUPREME COURT HAD TAKEN A DIFFERENT VIEW IN GOETZE (INDIA) LIMITE D V. COMMISSIONER OF INCOME-TAX. HOWEVER THIS COURT IS UNABLE TO AGRE E. THE DECISION WAS RENDERED BY A BENCH OF TWO LEARNED JUDGES AND E XPRESSLY REFERRED TO THE JUDGMENT OF THE BENCH OF THREE LEAR NED JUDGES IN NATIONAL THERMAL POWER COMPANY LIMITED VS. COMMISSI ONER OF 30 MADHAV CONSTRUCTION INCOME-TAX. THE QUESTION BEFORE THE COURT WAS WHETH ER THE APPELLANT-ASSESSEE COULD MAKE A CLAIM FOR DEDUCTION , OTHER THAN BY FILING A REVISED RETURN. AFTER THE RETURN WAS FILED , THE APPELLANT SOUGHT TO CLAIM A DEDUCTION BY WAY OF A LETTER BEFO RE THE ASSESSING OFFICER. THE CLAIM, THEREFORE, WAS NOT BEFORE THE A PPELLATE AUTHORITIES. THE DEDUCTION WAS DISALLOWED BY THE AS SESSING OFFICER ON THE GROUND THAT THERE WAS NO PROVISION UNDER THE AC T TO MAKE AN AMENDMENT IN THE RETURN OF INCOME BY MODIFYING AN A PPLICATION AT THE ASSESSMENT STAGE WIT/LOUT REVISING THE RETURN. THE COMMISSIONER OF INCOME TAX (APPEALS) ALLOWED THE ASSESSEE'S APPE AL. THE TRIBUNAL, HOWEVER, ALLOWED THE DEPARTMENT'S APPEAL. IN THE SU PREME COURT, THE ASSESSEE RELIED UPON THE JUDGMENT IN NATIONAL THERM AL POWER COMPANY LIMITED CONTENDING THAT IT WAS OPEN TO THE ASSESSEE TO RAISE THE POINTS OF LAW EVEN BEFORE THE TRIBUNAL. THUS, I T IS CLEAR THAT THE SUPREME COURT DID NOT HOLD ANYTHING CONTRARY TO WHA T WAS HELD IN THE PREVIOUS JUDGMENTS TO THE EFFECT THAT EVEN IF A CLAIM IS NOT MADE BEFORE THE ASSESSING OFFICER, IT CAN BE MADE BEFORE THE APPELLATE AUTHORITIES. THE JURISDICTION OF THE APPELLATE AUTH ORITIES TO ENTERTAIN SUCH A CLAIM HAS NOT BEEN NEGATED BY THE SUPREME CO URT IN THIS JUDGMENT. IN FACT, THE SUPREME COURT MADE IT CLEAR THAT THE ISSUE IN THE CASE WAS LIMITED TO THE POWER OF THE ASSESSING AUTHORITY AND THAT THE JUDGMENT DOES NOT IMPINGE ON THE POWER OF THE T RIBUNAL UNDER S 254. THE APPEAL IS, THEREFORE, DISMISSEDJUTE CORPO RATION OF INDIA LTD. VS. CIT (1990) 88 CT!? (SC) 66 : 1991 SUPP (2) SCC 744 : (1991) 187 ITR 688 (SC), AHMEDABAD ELECTRICITY CO. LTD. VS . CIT (1992) 106 CT!? (BOM)(FB) 78 . (1993) 199 ITR 351 (BOM)(FB) AN D NATIONAL THERMAL POWER CO. LTD. VS. CIT (1999) 157 CTR (SC) 249: (1997) 7SCC 489: (1998) 229 1TR 383 (SC) RELIED ON; GOETZE ('IN DIA) LTD. VS. CIT (2006) 204 CTR (SC) 182 DISTINGUISHED (PARA 22, 23) CONCLU SI ON EVEN ASSUMING THAT THE ASSESSING OFFICER IS NOT ENT ITLED TO GRANT A DEDUCTION ON THE BASIS OF A LETTER REQUESTING AN AM ENDMENT TO THE RETURN FILED, THE APPELLATE AUTHORITIES ARE ENTITLE D TO CONSIDER THE CLAIM AND TO ADJUDICATE THE SAME. IT IS NOT NECESSA RY THAT THE DEDUCTION BE ALLOWED ONLY IF A REVISED RETURN OF IN COME WOULD HAVE BEEN FILED. 31 MADHAV CONSTRUCTION 18. IN THIS VIEW OF THE MATTER AND CONSIDERING THE RATI OS OF THE CASE LAWS DISCUSSED ABOVE, WE ARE OF THE VIEW THAT THE ASSESS MENT ORDER PASSED BY THE AO U/S 143(3) R.W.S. 254 OF THE INCOME-TAX ACT, 19 61 IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE. THEREF ORE, WE SET ASIDE THE ORDER PASSED BY THE PRINCIPAL CIT U/S 263 OF THE ACT AND RESTORE THE ASSESSMENT ORDER PASSED BY THE AO FOR AYS 2003-04 TO 2008-09. 19. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE AR E ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07 TH JULY, 2017. SD/- SD/- (D.T. GARASIA) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 07 TH JULY, 2017 COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI