Income-tax Act, 1961 — S. 251, S. 254. While the powers of CIT(A) are co-terminus with the powers of Assessing Officer, AO has no power to admit fresh claim otherwise than by way of revised return but Appellate Authorities including CIT(A) and ITAT have p

Income-tax Act, 1961 — S. 251, S. 254. While the powers of
CIT(A) are co-terminus with the powers of Assessing Officer, AO has no power to
admit fresh claim otherwise than by way of revised return but Appellate
Authorities including CIT(A) and ITAT have power to admit such claim. The Apex
Court in the case of Goetze (India) Ltd. has itself clarified that their finding
does not impinge on the power of ITAT u/s.254 of the Act, CIT(A) has similar
power u/s.251(1)(c).

The assessee in its return of income did not make any claim
of Rs.98.36 lakhs on account of prior period adjustments. In the course of
assessment proceedings, it pressed such claim. The Assessing Officer (AO) did
not entertain the claim.

Aggrieved the assessee preferred an appeal to the CIT(A) who
relying on the decision of the Supreme Court in Goetze (India) Ltd. (284 ITR
323) (SC) held that the claim for deduction can be made only in the return of
income filed and that a claim which is not made in the return of income cannot
be subsequently made. He upheld the action of the AO.

Aggrieved the assessee preferred an appeal to the Tribunal.

The Tribunal having considered the observations of the
Supreme Court in the case of Goetze (India) Ltd. (supra) and also the powers of
the first Appellate Authority as examined by the Supreme Court in CIT v.
Nirbheram Deluram, (224 ITR 610) (SC) held as under :

(1) The Apex Court clarified in Goetze (India) Ltd.
(supra) itself that their finding does not impinge on the power of the
Income-tax Appellate Tribunal u/s.254 of the Act. We find that the CIT(A)
has also similar power u/s.251(1)(c) of the Act.

(2) The AO has no power to admit fresh claim otherwise
than revised return but Appellate Authorities including the CIT(A) and ITAT
have power to admit such claim.

The Tribunal held that without prejudice to its above finding
the claim of the assessee is in accordance with the judgment of the Apex Court
in the case of Goetze (India) Ltd. The Tribunal in the interest of natural
justice and keeping in view the ratio laid down by the Apex Court in the case of
Goetze (India) Ltd. remitted the matter back to the file of the CIT(A) with a
direction to decide the issue on merit in accordance with law and after
providing reasonable opportunity of hearing to both the sides.