Taxpayers sometimes fail to claim or short claim certain deductions or exemptions in their income tax return. Also, there may be cases where an additional claim could have been made for a particular deduction or exemption on account of retrospective amendment/ judicial pronouncement or any other reason after expiry of time limit to revise tax return. 

Question: Whether a taxpayer can file additional claim before income tax authorities other than by filing a revised return?

This issue has been analysed by the Supreme Court in the case of Goetze (India) Ltd. v. CIT1, wherein it was held that there was no provision under the Income-tax Act, 1961 (‘Act’) to make amendment in the tax return without filing a revised return. Also, the Act does not give power to the Assessing Officer to entertain a claim for deduction except where a revised tax return is filed. However, the Court did not comment upon the powers of appellate authorities.

Fresh claim v. revised claim

A fresh claim is altogether a new claim which is never made in the tax return, however, a revised claim is something which is already on record but the section/ mode/ method/ quantum of deduction/ exemption needs revision due to various factors.

In the case of CIT v. Natraj Stationery Products (P) Ltd.2, Delhi High Court held that where the claim is already on record and needs only revision, the assessee need not file a revised return since it had not made any 'new claim'. Therefore, the judgement of Goetze (India) Ltd. does not apply.

In the case of Solaris Bio Chemicals Ltd v. DCIT3, it was observed that the assessee claimed lower rate of depreciation in tax audit report by mistake and did not file revised tax audit report. The claim for correct rate of depreciation was made before the assessing officer. The Tribunal relied upon the decision of Delhi ITAT in the case of JCIT v. Hero Honda Finlease Ltd.4 and the decision of Punjab & Haryana High Court in the case of CIT v. Ramco International5 and held that the claim of higher rate of depreciation before assessing officer could not be termed as ‘new claim’. Therefore, the judgement of Goetze (India) Ltd. does not apply and the assessee was not required to file revised tax return to claim higher rate of depreciation.

In view of the above judgements, it can be inferred that where an existing claim on record, is revised, it can be accepted by the assessing officer.

Powers of the Appellate Authorities to accept fresh claim

As per section 251, Commissioner of Income Tax (Appeals) while disposing an appeal, has the power to confirm, reduce, enhance or annul the assessment. As per section 250(5), the Commissioner (Appeals) may allow an appellant to go into any ground of appeal which is not specified in the form of appeal, where the Commissioner (Appeals) is satisfied that omission of that ground from the form of appeal was not willful or unreasonable. In the case of Jute Corporation of India Ltd. v. CIT6, the Supreme Court analyzed these provisions and held that the Commissioner (Appeals) is vested with wide powers under section 251(1)(a) while hearing an appeal against the assessment order. In absence of any statutory provision regarding amplitude of appellate authority's power, it is general principle that its power is co-terminus with the powers of subordinate authority. Therefore, the Commissioner (Appeals) can entertain additional grounds raised by the assessee even though the same was not raised before the assessing officer.

Also, under section 254, the Appellate Tribunal has the power to pass any order as it thinks fit, provided reasonable opportunity of being heard is given to both the parties to the appeal. In the case of National Thermal Power Co. Ltd. v. CIT7, the Supreme Court analyzed this section and held that the powers of Tribunal in dealing with appeals, is expressed in the widest possible terms. Therefore, the Tribunal cannot be prevented from considering questions of law arising in assessment proceedings, even though not raised earlier.

Conclusion

In view of the aforementioned provisions of the Act and judicial precedents, it is well settled that even if a claim made by the assessee does not form part of the original tax return or even revised return, it can still be considered by the appellate authorities, which includes both the Commissioner (Appeals) and the Tribunal. Where an existing claim on record is revised, it can be accepted by the assessing officer also.

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1.  (2006) 284 ITR 323 (SC)

2.  (2009) 177 Taxman 168 (Delhi HC)

3.  (2012) 25 taxmann.com 182 (Delhi ITAT)

4.  (2008) 115 TTJ 752 (Delhi ITAT)

5.  [2009] 180 Taxman 584 (Punjab & Haryana HC)

6.  [1990] 53 Taxman 85 (SC)

7.  [1998] 229 ITR 383 (SC)