The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) held that the deduction claimed under Section 80C of the Income Tax Act, 1961 cannot be rejected merely on the ground of non-mentioning of the claim in the Income Tax Return (ITR).
The assessee while filing the return of income assessee has failed to claim the deduction of Rs. 1,50,000/- for interest on the housing loan under Section 24(b) of the Income Tax Act and Rs. 1,00,000/- under Section 80C of the Income Tax Act further amount of Rs. 29,136/- under Section 80D of the Income Tax Act.
The assessee after realizing its mistake has filed an appropriate rectification petition under Section 154 of the Income Tax Act for rectifying the defects before Central Processing Centre (CPC), Bengaluru.
The petition of the assessee was completely ignored by the Assessing Officer even though necessary evidence in support of his claim was made before the Assessing Officer while filing the rectification petition. The claim of the assessee was rejected by the Assessing Officer only on the ground that such a claim has to be made by filing a revised return only and the petition filed by the assessee was rejected.
The Authorized Representative contended that merely because the claim has not been made in the return of income, the same cannot be rejected by the Assessing Officer. The revenue cannot take advantage of the mistake/ignorance of the assessee.
The Departmental Representative submitted that the assessee is not eligible for any of the deductions as it was not claimed during the filing of the return. Therefore, the claim before the Assessing Officer cannot be sustained without filing the revised return.
The Two-member bench comprising of Manish Borad (Accountant member) and Sonjoy Sarma (Judicial member) held that the appellate authority has coterminous power to accept the deduction that was not claimed in the Income Tax Return. So, the entire claim under Section 80C of the Income Tax Act is eligible claim of deduction.
The assessee had submitted all relevant documents which are also considered by the appellate authority. Therefore, the claim of the assessee related to deduction under Sections 24(b), 80C & 80D of the Income Tax Act are allowed and the order of the Commissioner of Income Tax (Appeal) was set aside. Thus, the appeal of the assessee was allowed.
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