No bar in taxpayer making claim by letter without filing a revised return – ITAT

There is no bar to a taxpayer for making a claim by a letter without filing a revised return in a case u/s 143(3) of the Act – ITAT

In a recent judgment, ITAT Rajkot has held that there is no bar to a taxpayer for making a claim by a letter without filing a revised return in a case u/s 143(3) of the Act. Though AO is not entitled to grant a deduction on the basis of a letter requesting an amendment to the return filed, however, the appellate authorities are entitled to consider the claim.

ABCAUS Case Law Citation:
4696 (2025) (08) abcaus.in ITAT

In the instant case, the assessee had challenged the order passed by the CIT(A) in confirming action of the AO in declining claim made by a letter without filing a revised return.

The assessee’s case was selected for scrutiny through CASS. Subsequently notice u/s 143(2) of the Act was issued. During the year under consideration, assessee engaged in business of stone crushing, share/commodities trading, deriving labour income, share of profit from firm and income from other sources.

During assessment proceedings, Assessing Officer asked the assessee to provide working of section 14A of the Act. In response to the notice, the assessee furnished reply stating that in the return of income an amount was erroneously added twice to the computation of income, leading to an incorrect determination of the taxable income. The assessee requested the Assessing Officer to correct the error by taxing the amount only once, submitting a revised computation of income.

However, assessing officer rejected the contention of the assessee and disallowed the proportionate interest income under section 14A of the Act.

Aggrieved by the order of Assessing Officer, the assessee carried the matter in appeal before CIT(A) and made a fresh claim. However, CIT(A) confirmed the addition made by the Assessing Officer, observing that the appellate proceedings are not meant for making fresh claims unless such claims were either not available at the time of the original filing of the return or due to a change in circumstances.

The CIT(A) opined that though the omission appeared to be an error or oversight, but the fact was that the claim was not made by filing a revised return. Relying on the law laid down in the case of Goetze (India) Ltd. by the Hon’ble Supreme Court the CIT(A) dismissed the appeal.

Before the Tribunal, the assessee contended that the taxpayer was entitled to claim the deduction before the appellate authorities which was not claimed in the original or revised income-tax return but was claimed in the assessment and appellate proceedings.

It was submitted that an amount was erroneously added twice to the computation of income, which led to an incorrect determination of the taxable income, therefore, an instruction may be given to the assessing officer to correct the error.

The Tribunal observed that in the appeal, the assessee had sought relief on the ground that she should be entitled to make a fresh claim during appellate proceedings, citing various judicial precedents of Hon’ble Supreme Court. The assessee placed reliance on the decision in the case of Goetze (India) Ltd. wherein the Hon’ble Supreme Court held that the assessing officer does not have the power to entertain a fresh claim made by the assessee without a revised return under Section 139 of the Income Tax Act.

The Tribunal opined that the object of the assessment proceedings/ scrutiny proceedings u/s 143(3) of the Act is to determine the correct income and correct taxes thereon. There is no bar to a taxpayer for making a claim by a letter without filing a revised return in a case u/s 143(3) of the Act.

However, the Tribunal held that the assessing officer is not entitled to grant a deduction on the basis of a letter requesting an amendment to the return filed, but the appellate authorities are entitled to consider the claim.

Therefore, the Tribunal directed the assessing officer to correct the amount which was erroneously added twice to the computation of income, as it led to an incorrect determination of the taxable income.

Accordingly, the appeal filed by the assessee was allowed.

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