Shri Rumi K. Pali v. Dy CIT ITAT Mumbai `D’ Bench Before D. Manmohan (VP) and N. K. Billaiya (AM) ITA No. 7314/Mum/2011 A.Y.: 2008-09. Dated on: 17-10-2012. Counsel for assessee/revenue: Reepal Tralshawala/A B Koli

Facts:

The assessee in the return of income filed, which return of income was revised on two occasions, as well as in the two revised returns filed by him offered for taxation under the head Income from Other Sources, Rs 3,81,565 being interest on PPF. The Assessing Officer (AO) completed the scrutiny assessment by accepting the returned income.

In an appeal to CIT(A), the assessee contended that he should be allowed exemption in respect of interest on PPF deposit u/s. 10(11) of the Act. The CIT(A), relying on the decision of the Apex Court in the case of Goetze India Ltd. (284 ITR 323) held that no fresh claim can be made by the assessee. He dismissed the appeal filed by the assessee.

Aggrieved, the assessee preferred an appeal to the Tribunal where on behalf of the assessee, it was contended that a statutory claim can be made at any stage; mistake which has crept in the income-tax return was inadvertent; and the assessee cannot be put in a position so as to be taxed on something which he is not legally bound to. Reliance was also placed on the decision of Bombay High Court in the case of CIT v Pruthvi Brokers & Shareholders Pvt. Ltd. (ITA No. 3908 of 2010).

Held:

 The Tribunal noted that the assessee failed to claim interest on PPF deposits as exempt from tax even in the revised returns and the impugned amount of interest is exempt from tax u/s. 10(11) of the Act. It noted that the Supreme Court, in the case of National Thermal Power Company Ltd. v CIT 229 ITR 383 (SC), has observed that even if a claim is not made before the AO, it can be made before the Appellate authority. It also noted that the decision of the Bombay High Court on which assessee has placed reliance, having considered the decisions of the Supreme Court in the case of Goetze India Ltd. (supra) and also National Thermal Power Company Ltd. v CIT (supra), held as under:

“The jurisdiction of the appellate authorities to entertain such a claim has not been negated by the Supreme Court in this judgment. In fact, the Supreme Court made it clear that the issue in the case was limited to the power of the assessing authority and that the judgement does not impinge on the power of the Tribunal u/s. 254.”

Following the above mentioned decision of the Bombay High Court, the Tribunal directed the AO to allow exemption of interest on PPF deposit at Rs. 3,81,565. The appeal filed by the assessee was allowed.