Judgment ITA no.03 of 2013 ITAT no.260 of 2012 IN HIGH COURT AT CALCUTTA Special Jurisdiction (Income Tax) ORIGINAL SIDE Commissioner of Income Tax, Kolkata-III Versus M/S Britannia Industries Ltd. BEFORE: Hon ble JUSTICE ANIRUDDHA BOSE Hon'ble JUSTICE ARINDAM SINHA Ms. Das De, Adv. ..for Revenue. Mr. R.K. Murarka, Adv. ..for Assessee. Heard on :06.07.2017 and 11.07.2017. Judgment on :13.07.2017. Court: Revenue has preferred this appeal against order dated 19th June, 2012 passed by Income Tax Appellate Tribunal B Bench Kolkata, in ITA no.14106/KOL/2011 pertaining to assessment year 2005-06. By order dated 9th December, 2012 appeal was admitted on following question: (a) Whether in facts and in circumstances of case Learned Income Tax, Appellate Tribunal erred in law in allowing deduction under section 80GGB in respect of donation made by assessee to political parties. facts relevant for purpose of this appeal are that assessee made donation to political parties. In return filed by assessee this was not claimed as deduction. assessment was accordingly made. assessee on preferring appeal, CIT(A) found and said that which is reproduced below: .Examination of breakup of expenses in schedule-3 of Audited Accounts as well as in Annexure-III with regard to miscellaneous expenses reveal that appellant made total contribution as donation during year at Rs.2,25,72,928/- which includes Rs.834136/- as employees contributions. Out of total donation of Rs.2,16,65,864/- (excluding employees contribution) made by appellant, it has added back on its own to income disclosed in return filed on 31.10.2005 and claimed deduction u/s 80G Chapter-VIA only for Rs.45,82,932/- i.e. 50% of contribution made by it to Tsuanami Relief Fund. Therefore, claim of appellant that assessing officer has not allowed deduction of political contribution u/s 80GGB of IT Act, 1961 is found to be factually incorrect. In fact, appellant on its own disallowed contribution in return of income and neither claimed as deduction under Chapter-VIA of IT Act in its return nor claimed by filing revised return nor made claim before A.O. during course of assessment proceedings. In view of above and respectfully following decision of Hon ble Supreme Court in case of Goetze (India) Ltd. Vs. CIT reported in 284 ITR 323, I am of opinion that appellant is not entitled to get deduction u/s80GGB claimed at this stage. Therefore this ground of appeal is dismissed. assessee preferred appeal before Tribunal which by impugned order said as follows: 7. We have considered rival submissions. It is noticed that Hon ble Supreme Court in case of Goetze (India) Ltd. (refer to supra) has held that appellate authority being tribunal did have powers to direct Assessing Officer to accept claim of assessee, though same has not been made in original return nor has been claimed in revised return. In circumstances, respectfully following ratio laid down by Hon ble Supreme Court in case of Gotze (India) Ltd. (refer to supra), Assessing Officer is directed to grant assessee s claim of deduction u/s 80GGB of donations made by assessee to political parties in respect of Rs.45 lakhs given to Congress party and Rs.80 lakhs given to BJP. Ms. Das De relied on decision of Supreme Court in case of Jute Corporation of India Ltd. Vs. CIT reported in (1991) 187 ITR 688 (SC) to portion in that judgment as extracted below: next question which arises for consideration now is as to what order should be passed in present circumstances. In view of findings recorded by us, ordinarily, we should direct High Court to call for statement of case from Tribunal and thereupon decide matter afresh, but this procedure would be time consuming. Since we have already discussed correct position in law, we do not consider it necessary to follow usual procedure. Since view taken by Income tax Appellate Tribunal is not sustainable in law, we grant leave against order of Income tax Appellate Tribunal under article 136 and set aside same and remit matter to Income tax Appellate Tribunal to consider merits of deduction permitted by Appellate Assistant Commissioner. If Tribunal thinks it necessary, it may remand matter to Appellate Assistant Commissioner (now Deputy Commissioner of Appeals) for rehearing. appeal is, accordingly, disposed of. There will be no order as to costs. She also relied on another decision of Supreme Court in case of Additional Commissioner of Income Tax, Gujarat vs. Gurjargravures Private Ltd. reported in (1978) 111 ITR 1 to submit that in similar facts Supreme Court held that it was not competent for Tribunal to hold that Appellate Assistant Commissioner should have entertained question of relief for exemption under section 84 when no such relief had been claimed before I.T.O. She however then submitted that in view of later judgment of said court in case of Goetze (India) Ltd. Vs.CIT reported in (2006) 284 ITR 326 (SC) question was covered against Revenue. Mr. Murarka, in addition to Goetze (India) Ltd. (supra), relied on another judgment of Supreme Court in case of CIT Vs. Mahalaxmi Sugar Mills Co. Ltd. reported in (1986) 160 ITR 920 (SC) in which, inter alia, following was said. In second place, there is duty cast on Income tax Officer to apply relevant provisions of Indian Income tax Act for purpose of determining true figure of assessee s taxable income and consequential tax liability. Merely because assessee fails to claim benefit of set-off, it cannot relieve Income tax Officer of his duty to apply section 24 in appropriate case. In Goetze (India) Ltd. (supra) Supreme Court had before it question as to whether assessee could make claim for deduction other than by filing revised return. assessee had in that case sought to claim deduction by way of letter to Assessing Officer. Supreme Court dismissed Civil Appeal preferred by assessee but said as follows: 4 ..However, we make it clear that issue in this case is limited to power of assessing authority and does not impinge on power of Income tax Appellate Tribunal under section 254 of Income tax Act, 1961. There shall be no order as to costs. similarity on facts between case at hand and assessee in Goetze (India) Ltd. (supra) is that respective deductions were not claimed before Assessing Officer. In this case CIT(A) dismissed appeal of assessee following Goetze (India) Ltd. (supra) in which Supreme Court had declared that issue was limited to power of assessing authority and does not impinge on power of Tribunal under section 254 of Act. Hence, CIT(A) held in favour of Revenue at that stage and Tribunal thereafter, in favour of assessee. In Jute Corporation of India Ltd.(supra) on similar facts Supreme Court remitted matter to Tribunal to consider merits of deduction raised before and permitted by Appellate Assistant Commissioner. Though Ms. Das De submitted, such direction meant that deduction was not allowed, we see direction as being one to consider merits of deduction and not deductibility itself. facts in Gurjargravures Private Ltd.(supra) were that assessee therein had not claimed exemption under section 84 before I.T.O and assessment was completed accordingly. assessee then appealed to Appellate Assistant Commissioner and one of grounds of appeal was that I.T.O had erred in not giving assessee any benefit under section 84 of Act. Appellate Assistant Commissioner dismissed appeal on ground that question of error on part of I.T.O did not arise as no claim for exemption had been made before him. On further appeal Tribunal took different view. On these facts Tribunal referred following question to Gujarat High Court. Whether on facts and in circumstances of case it was competent for Tribunal to hold that Appellate Assistant Commissioner should have entertained question of relief u/s 84, and to direct income tax officer to allow necessary relief? Supreme Court in answering question raised before High Court said, inter alia, as follows: .We are not here called upon to consider case where assessee failed to make claim though there was evidence on record to support it, or case where claim was made but no evidence or insufficient evidence was adduced in support. In present case neither any claim was made before income tax officer, nor was there any material on record supporting such claim. We therefore hold that on facts of this case, question referred to High Court should have been answered in negative. There is no conflict between Gurjargravures Private Ltd. (supra) and Goetze (India) Ltd. (supra). In former claim for exemption was for first time put up before Appellate Assistant Commissioner who rejected claim as not made before I.T.O. This rejection was set aside by Tribunal with direction upon Appellate Assistant Commissioner to entertain question of relief under section 84, claimed by assessee in that case. Supreme Court held that it was not competent for Tribunal to have done so. distinction between two authorities eliminating any conflict is that in Gurjargravures Private Ltd. (supra) competence of Tribunal to direct Appellate Assistant Commissioner to entertain claim not made before I.T.O was found to be lacking. In Goetze (India) Ltd. (supra) Supreme Court held that assessing Authority s power was limited but not that of Tribunal in context of dealing with claim of assessee therein not put forward before Assessing Officer. In Gurjargravures Private Ltd. (supra) Tribunal itself did not consider to allow claim for relief. In view of aforesaid we answer question in negative and in favour of assessee. appeal is accordingly dismissed. (Aniruddha Bose, J.) (Arindam Sinha, J.) Commissioner of Income-tax, Kolkata-III v. Britannia Industries Ltd