Tribunal power to consider new deduction claim upheld despite absence from original return and assessment stage

The Tribunal's power under section 254 is not curtailed by the rule in Goetze (India) Ltd., which restricts only the Assessing Officer from entertaining a deduction claim not made in the original return or by revised return. The Court reconciled Goetze (India) Ltd. with Jute Corporation of India Ltd. and distinguished Gurjargravures Private Ltd. on its facts, holding that the Tribunal could examine the merits of the assessee's section 80GGB deduction claim even though it had not been raised before the Assessing Officer. The Tribunal's direction to consider the claim was therefore upheld.

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Issues: Whether the Tribunal could direct allowance of deduction under section 80GGB of the Income-tax Act, 1961 when the claim was not made in the original return or before the Assessing Officer.

Analysis: The claim for deduction had not been raised before the Assessing Officer and was not founded on any revised return. The Court reconciled the decisions in Goetze (India) Ltd. and Jute Corporation of India Ltd. by holding that the restriction recognised in Goetze (India) Ltd. applies to the Assessing Officer, but does not curtail the Tribunal's power under section 254 of the Income-tax Act, 1961. Gurjargravures Private Ltd. was distinguished on the basis that, on its facts, no material claim had been made before the assessing authority and the Tribunal had directed consideration of a new claim in circumstances where that course was impermissible. The Tribunal was therefore competent to examine the merits of the deduction.

Conclusion: The answer was in the negative against the Revenue and in favour of the assessee; the Tribunal's direction to allow consideration of the deduction was upheld.

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