Assessee allowed to claim relief under section 80J(1) in appeal

The High Court of Andhra Pradesh allowed the assessee to raise a claim for relief under section 80J(1) for the first time in the appeal before the Tribunal, despite not claiming it before the Income Tax Officer. The Tribunal exercised its discretion and permitted the claim based on the evidence presented, ruling in favor of the assessee. The Court held that as long as there is substantial evidence to support the claim, the Tribunal has the jurisdiction to entertain new contentions not raised before departmental authorities. The decision favored the assessee, with costs imposed on the revenue.

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Issues involved:
The issue involves whether the Tribunal is justified in permitting the assessee to raise a claim for relief under section 80J(1) for the first time in the appeal filed before it, despite not claiming such relief before the Income Tax Officer (ITO).

Summary:

The High Court of Andhra Pradesh considered a case where the assessee, a limited company engaged in manufacturing cables, filed an appeal before the Tribunal challenging the disallowance of certain expenditure under section 80J(1) by the ITO and the AAC. The revenue contended that the assessee could not claim relief under section 80J(1) as it was not raised before the ITO. However, the Tribunal exercised its discretion and allowed the claim based on the facts presented. The Tribunal found that all necessary details for the claim were before the ITO, leading to the decision in favor of the assessee.

In a similar case before the Supreme Court, it was held that if no claim was made before the ITO and there was no supporting material, the claim should not be entertained. However, in the present case, there was sufficient evidence on record to support the claim under section 80J(1). The High Court opined that the Tribunal has the jurisdiction to permit the assessee to raise a new contention, even if not raised before the departmental authorities, as long as there is substantial evidence to support the claim. The decision of the Supreme Court in a previous case was deemed not to be a bar to entertaining the claim in this instance.

Therefore, the High Court answered the reference in the affirmative, ruling in favor of the assessee and against the revenue, with costs imposed.

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