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Judgment
Per Manish Agarwal, Accountant Member:
The present appeal has been filed by the assessee against the order dated 05.05.2025passed by CIT(A)/Addl./JCIT(A), Panchkula in DIN & order No. IT BA/ APL/S/250/2025-26/1076033636(1) passed u/s 250 of the Inco me Tax Act, 1961 [“the Act”] ar ising from the intimation order dated 14.12.2022 passed u/s 143(1) of the Act pertaining to Assessment Year 2021-22.
The assessee has raised additional grounds of appeal before the ld . CIT(A) claiming deduction u/s 80M of the Act on inter-corporate dividend rece ived and placed reliance on the judgme nt of Hon’ble Supre me Court in the case of Goetze (India) Ltd. Vs. CIT (2006) 284 ITR 323. The ld. CIT(A) has not entertained the said claim by observing that the Hon’ble Supreme Co urt in the case of Goetze (India) Ltd . (supra) has held that AO has not empowered to entrain fresh claim for deduction that was no t made in original return or thro ugh revised return filed within the statutory time limit and according ly ld. CIT(A) has d ismissed additional ground of appeal of the assessee. Before us, though the assessee has taken many gro unds of appeal, the effective grounds of appeal are 3 & 4 re lates the dismissal of the additional ground of appeal taken before ld . CIT( A) through which fresh claim of deduction u/s 80M on the inter-co rporate dividend received was made.
Ld. AR submits that assessee has received dividend of Rs.160.81 crores, and as per the amendment made by Finance Act, 2020 w.e.f. 01.04.2021 on account of intercorporate dividend, sub-se ctio n (2) of section 115 BAA provides that if any company has received dividend as well as in turn has paid the dividend and the dividend so paid is more than d ividend received then se ction 80M of the Act makes it eligible to claim deduction to the extent of dividend received. Since, the assessee company has distributed inter im dividend of Rs.413.05 crores and received the dividend of Rs 160.81 crores therefore had made an additional claim of deduction u/s 80M before the ld. CIT(A) which was not allowed.
Ld. AR submits that Hon’b le Supreme Co urt in the case of Goetze (India) Ltd. (supra) relied upon by ld. CIT(A) had specifically observed that the restrictio n imposed by the said orderdoes not impinge the power of the appellate authorities and therefore even the Hon'ble Supreme Cour t in the judgment of Goetze (India) Ltd. (supra)had allowed the admission of additio nal claim before the ld. C IT(A) without nay revised return. Ld. ARthus requested that the claim of deduction be allowedu/s 80M.
On the other hand, Ld. CIT-DR vehemently supported the orders of the lower authorities and requested for the confirmatio n of the same.
Heard the parties and perused the material availab le on the record. The solitary issue before us is with respect to the admission of additional claim of deduction u/s 80M of the Act made by the assessee during the course of appellate proceedings before ld. CIT(A). The ld. CIT( A) by placing reliance on the judgment of Hon'ble Supreme Court in the case of Goetze ( India) Ltd. (supra)has dismissed the claim. However, while observing so, the ld. C IT( A) has erred in not appreciat ing the judgment of Hon'ble Supreme Court in the case of Goetze (India) Ltd. (supra) in co mplete sense and true perspective whe rein the Hon'ble Supreme Co urt has further held that the restriction imposed of ad mitting fresh claimwithout filing original or revised return within time is limited to the powers of the AO and such restriction does not impinge the powers of the appellate authorities. This fact has been ignored by the ld. CIT(A) .
In the case of CIT v. Jai Parabolic Springs Ltd. reported in (2008) 306 ITR 42 (Delhi) the AO disallowed the claim of the assessee on the ground that “since the claim for the deferred revenue expenditure of INR 15,58,5 00/- was not claimed by the assessee in the return of income for the assessment year 1990-91, the same is not allowed”. Their Lordships after considering the decision of the Hon’ble Apex Cour t in the case of Goetze (India) Ltd. (supra) has held as under (Head note)
“Held, dismissing the appeal, that there w as no prohibition on the powers of the Tribunal to entertain an additional ground which according to the Tribunal arose in t he matter and for the just decision o f the case. There was no i nfirmity in the order of the Tribunal” .
In the case o f National Thermal power Co. Ltd. vs. CIT reported in (1998) 229 ITR 383(SC), the ho n’ble Supreme Cour t has held that
“The power of the Tribunal in dealing with appeals is thus expressed in the widest possible ter ms.The purpose of the assessment proceedings befor e the taxing authoritie s is to assess co rrectly the tax liability of an asse ssee in accordance with law. ….. We do no t see any reason to restrict the p ower of the Tribunal under sectio n 254 only to decide the grounds which arise from the order of the Commissioner of I ncome tax(Appeals).Bo th the assesse e was well as the Department have a right to file an appeal/cross objections before the Tribunal. We fail to see why the Tribunal should be prevented from considering questions of law arising i n assessment pro ceedings although not raised earlier”.
The C BDT as back as in 1955 issued a circular No . 14(XL-35), dated 11th April, 1955 wherein the Board has recognized the fact that responsibility for claiming refunds and relief rests with the assessee as imposed by law, even then the Board has directed the officers to draw the attention of the assessee’s in respect of any refunds or reliefs to which they are eligible, which they have no t claimed for some reaso n o r other. The Board later issued Circular F.No.81/27/65-IT(B) dated t h 18 May,1965, defining the duties of PROs in providing assistance to the public in filing correct return and making eligible claims. In the case of Essar Oil Lt d. the coordinate bench of ITAT Mumbai in ITA N o. 3661 & 2827/Mum/2000, after considering various CBDT Circulars and the decision of the Hon’ble Apex Court in the case of NTPC Ltd. (229 IT R 303); UCO Bank (237 ITR 889) and in the case of Shelly Products and Anr. (261 ITR 367) and vario us decisio ns and Circulars has held as under:
“Having regard to these decisions, in our view the order of the CIT(A) cannot be found fault with. The learned Departmental Representative to the query from the Bench has fairly admitted that there is nothing in Goetze (India) Ltd., which prevents the Tribunal from entertaining any fresh claim if the same can be entertained in the light of the av ailable material on the face of the record. Anything to the co ntrary of the proposition will only negate the principle laid down by the Ho n’ble Supreme Court in the case of National Thermal Power Co. Ltd. (supra). We therefore co nfirm his order. It may be mentioned that we have taken this view after considering the fact that in all other years the department has accepted these expenses and allowed deduction as claimed by the assessee”
Accordingly, by respectfully follow ing the aforesaid judgme nts,we are of the view that ld. C IT(A) has erred in not admitting the claim of the asse ssee of deduction u/s 80M while computing the taxable income u/s 115BAA of the Act. Thus, the additio nal claim of the assessee is hereby admitted.However, it is observed thatthe said claim w as not made before the AO nor any exercise of verification of the correct and eligible amount of deductio n u/s 80M was carried out on the part of the AO, therefore in the larger intere st o f justice, after admitting the claim of the assessee for allowability if deduction u/s 80M of the Act, for the purpose of comp uting the amo unt of deductionfor the purpose of computing the income u/s 115 BAA, matter is remanded back to the file of the AO . With these directions,effective grounds of appeal Nos. 3 and 4 of the assessee are allo wed for statistical purposes.
Ground appeal No. 5 is with respect to levy of interest to u/s234Band u/ s 234Cof the Act which are co nsequential in nature.
In the result, the appeal of the assessee is allowed for statistical purposes.