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Judgment
PER MADHUMITA ROY, JUDICIAL MEMBER:
The instant appeal filed by the assessee is directed against the order dated 05.12.2025 passed by the Ld. Commissioner of Income-tax (Appeals), Thane [hereinafter referred to as the Ld. CIT(A)] under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) arising out of the Assessment Order dated 12.01.2023 passed by the CPC, Bangalore (hereinafter referred to as ‘the ld. AO’) under Section 154 of the Act for Assessment Year 2019-20.
Disallowance of claim of set off of brought forward unabsorbed depreciation is the subject matter before us.
Heard the parties and perused the record. In the year under consideration, i.e., AY 2019-20, the appellant had brought forward unabsorbed depreciation aggregating to Rs.49,98,717/-, the details whereof are as follows:-AY 2017-18 - Rs.38,12,573/-AY 2018-19 - Rs.11,86,144/-
Due to some clerical mistake in the ITR Form for AY 2019-20, the figures of unabsorbed depreciation of Rs.49,98,717/- was wrongly mentioned as pertaining to AY 2019-20 as against AY 2017-18 and 2018-19, respectively which is evident from page 3 of the ITR filed by the assessee annexed to the paper book filed before us. Due to such mistake, the CPC, while processing the ITR, denied the claim of set off of the brought forward depreciation of Rs.49,98,717/- whereupon a rectification application was moved under Section 154 of the Act, copy whereof is appearing at page 11 of the paper book filed before us. It appears that both the CPC and the CIT(A) rejected the claim of the appellant on technical ground without considering the mistake apparent on the face of the ITR in its proper perspective. Moreso, the complete details of brought forward unabsorbed depreciation was on record before the said authorities below and the assessee is found to be entitled to the claim of set off.
It is the case of the assessee that clerical mistake in the ITR is a rectifiable mistake under Section 154 of the Act which does not call for any investigation of facts or legal interpretation. Further, that the statutory provisions of Section 32(2) of the Act explicitly allow set off of unabsorbed depreciation and, therefore, disallowance of claim of Rs.49,98,717/- by CPC/AO further confirmed by the CIT(A) is not sustainable in the eyes of law as the crux of the submissions made by the Ld. Counsel Mr. Satyajit Goel r.w. CBDT Circular No.14(XL-35), dated 11.04.1955, reproduced below, is found to be acceptable:-
“4(3) Officers of the Department must not take advantage of ignorance of an assessee as to his rights. It is one of their duties to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs and in this regard the Officers should take the initiative in guiding a taxpayer where proceedings or other particulars before them indicate that some refund or relief is due to him. This attitude would, in the long run, benefit the department for it would inspire confidence in him that he may be sure of getting a square deal from the department. Although, therefore, the responsibility for claiming refunds and reliefs rests with assessee on whom it is imposed by law, officers should—
(a)draw their attention to any refunds or reliefs to which they appear to be clearly entitled but which they have omitted to claim for some reason or other;
(b)freely advise them when approached by them as to their rights and liabilities and as to the procedure to be adopted for claiming refunds and reliefs.
6.The intention of this circular is not that tax due should not be charged or that any favour should be shown to anybody in the matter of assessment, or that where investigations are called for, they should not be made. Whatever the legitimate tax it must be assessed and must be collected. The purpose of this circular is merely to emphasise that we should not take advantage of an assessee’s ignorance to collect more tax out of him than is legitimately due from him.”
Having heard the Ld. Counsels appearing for the parties and having regard to the facts and circumstances of the matter, we are of the considered opinion that the authorities below ought to have considered the clerical error apparent on the face of the ITR in its proper perspective and allow the claim of set off of unabsorbed depreciation of Rs.49,98,717/- pertaining to AY 2017-18 and 2018-19 for Rs.38,12,573/- and Rs.11,86,144/- particularly the details whereof were made available before the authorities below as claimed by the assessee.
Having regard to the details as placed before us, we, thus, allow the claim of set off of unabsorbed depreciation of Rs.49,98,717/- as above.
In the result, appeal filed by the Assessee is allowed.