TaxTMI 
TaxTMI 
2026 (10) TMI 2049
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....x Free Secured Redeemable Non-Convertible Bonds - Series VI|-B Rs. 2,00,00,000/-; and b. Rural Electrification Corporation Ltd. (REC) 8.46% Tax Free Bonds -Series 3B Rs. 1,00,00,000/-. 3. He submitted that interest income on both these bonds is exempt under section 10(15) (iv) (h) of the Income-tax Act, 1961 (for short 'the Act') as is also borne out from the allotment documents issued by the respective issuers. Relevant extract of the section is quoted as under: "(15)(iv) interest payable- (h) by any public sector company in respect of such bonds or debentures and subject to such conditions, including the condition that the holder of such bonds or debentures registers his name and the holding with that company, as the Central Government may, by notification in the Official Gazette, specify in this behalf." 4. He further submitted that the assessee has consistently shown the interest income earned on these bonds as exempt income under section 10(15) of the Act in the returns filed for AYs 2018-19, 2019- 20, 2020-2 1, 2021-22, 2023-24 and 2024-25. However, for AY 2022-23, by an inadvertent, bonafide error, the interest income of Rs. 25,42,000/- earne....
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....e income at Rs. 3,39,41,390/-. as against the actual taxable income of Rs. 3,13,99,390/-. 3(i). On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in taxing on Rs. 25,42,000/-, being exempt income. 3(ii). That the learned CITCA) has erred in taxing exempt income and thus, grossly erring to compute the taxable income in contravention to Article 265 of the Constitution of India 4. On the facts and circumstances of the case, the learned CIT (A) has erred, both on facts & in law, in passing the order without giving assessee an adequate and proper opportunity of being heard in violation of principle of natural justice." 10. With regard to the grounds raised by the assessee, ld. AR of the assessee submitted as under :- B.1. The rectification sought is a correction of a mistake apparent from the record, and not a fresh claim. It is respectfully submitted that the rectification application filed by the Appellant did not seek to raise any new claim of deduction or exemption that was not otherwise supported by the record. The Appellant had, in fact, disclosed the receipt of interest income from t....
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....scretion to allow anew ground to be raised Your Honor(s), the AO seems to have taken the judgement of Hon'ble Supreme Court in Goetze (India) Ltd. v. CIT [2006] 157 Taxman 1 (SC) in wrong context, as the ratio of Goetze (India) Ltd. is attracted only where an assessee seeks to raise a fresh claim for deduction that was never made in the return of income. That is not the fact situation here. The Appellant had already disclosed the interest income from the bonds in the return itself; the only infirmity was an inadvertent misclassification of an admittedly exempt receipt as taxable. There is, therefore, no "fresh claim" within the meaning of Goetze (India) Ltd. at all. Without prejudice, it is now a trite law that the appellate authorities have due powers and authorities to admit new grounds of appeal, irrespective of the fact whether the same was taken up before the lower authorities. In this context, assessee lays reliance on the following judgements: a. National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 b. Commissioner of Income Tax vs Sam Global Securities (2014) 360 ITR 682 (Del) c. CIT Vs. Bharat Aluminium Ltd. 303 ITR 256 (Del....
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.... not even require condonation of any delay, unlike the 1993-day delay that was condoned in that case." The assessee further placed reliance on the following judgements (squarely covering similar facts as that of the assessee): * BSCPL Infrastructure Ltd.v. Union of India [2024] 163 taxmann.com 470 (Telangana) b. Sharp Tools vs Pr CIT, 113 Taxmann.com 63 (Madras) * CIT vs Shelly Products 129 Taxmann 287 * CIT vs Bharat General Reinsurance Co Ltd 81 ITR 303 * Nirmala L. Mehta vs CIT 139 Taxmann 394 (BOM.) E. PRAYER In view of the facts and circumstances stated above and the submissions made herein, it is most respectfully prayed that this Hon'ble Tribunal may be pleased to treat the interest income of Rs. 25,42,000/- earned on the IIFCL and REC tax-free bonds as exempt under section 10(15) (iv) (h) of the Act and direct the Ld. Assessing Officer to grant the consequential refund of Rs. 9,91,370/- to the Appellant, along with interest as admissible under law." 11. On the other hand, ld. DR of the Revenue relied on the findings of the lower authorities and also relied on the decision of Hon'ble Supreme Court in Goetz....
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.... decision. Hence the argument advanced by the Learned DR in this regard is hereby dismissed. It is a fact that there is a delay of 1993 days with which appeal was filed by the assessee before the Learned CIT(A) which stood uncondoned by the Learned CIT(A). Hence, in the normal course, this issue should only be restored back to the file of Learned CIT(A) if sufficient cause is shown for the delay. The assessee had indeed filed an affidavit explaining the reasons for the delay. On going through the said affidavit, we are convinced that there is sufficient cause. In fact, the assessee had voluntarily come forward to offer the onetime benefit received from BCCI to tax in the return of income. However, pursuant to the subsequent developments by way of certain tribunal decisions, the assessee was advised that the said benefit received by the assessee would be exempt from tax in terms of Section 56(2)(vii) of the Act. The subsequent decision of the tribunal together with better understanding of provisions of section 56(2)(vi) of the Act had practically prompted the assessee to prefer an appeal per se before the Learned CIT(A). It is trite law that right amount of tax should be collected f....