Appeal before CIT(A) – A. Y. 2003-04 – Claim made for the first time before CIT(A) – CIT(A) can allow the claim on the basis of material on record:

In the return of income for the A. Y. 2003-04, the assessee had not made the claim for deduction u/s. 80HHC and 80- IB of the Income-tax Act, 1961 though the assessee was entitled to such deduction. For the first time the assessee made the claim for deduction before the CIT(A). CIT(A) allowed the claim on the basis of the material on record. The Tribunal upheld the order of the CIT(A).

On appeal by the Revenue, the Gujarat High Court upheld the decision of the Tribunal and held as under:

“i) The Courts have recognised the jurisdiction of CIT(A) and Tribunal to entertain new ground or a legal contention. A ground would have a reference to an argument touching a question of fact or a question of law or mixed question of law and facts. A legal contention would ordinarily be a pure question of law without raising any dispute about the facts. Not only such additional ground or contention, the Courts have also recognised the powers of the CIT(A) and the Tribunal to entertain a new claim for the first time though not made before the Assessing Officer.

ii) This is primarily on the premise that if a claim though available in law is not made either inadvertently or on account of erroneous belief of complex legal position, such claim cannot be shut out for all times to come, merely because it is raised for the first time before the appellate authority without resorting to revising the return before the Assessing Officer.

iii) Therefore, any ground, legal contention or even a claim would be permissible to be raised for the first time before the appellate authority or the Tribunal when facts necessary to examine such ground, contention or claim are already on record. In such a case the situation would be akin to allowing a pure question of law to be raised at any stage of the proceedings.

iv) This is precisely what has happened in the present case. The CIT(A) and the Tribunal did not need to nor did they travel beyond the materials already on record, in order to examine the claims of the assessee for deduction u/ss. 80-IB and 80HHC of the Act. We answer the question against the revenue and in favour of the assessee.”