Income Tax

An Assessing Officer should help the tax payers in a reasonable manner

An Assessing Officer should help the tax payers in a reasonable mannerThe Income Tax Appellate Tribunal in Shri Paramjeet Singh Chhabra vs. Income Tax Officer 1(2) being ITA No. 1 12/Ind/2013 (for the A.Y. 2005-06) by an order dated 20.05.2013 held that an assessing officer should help the tax payers in a reasonable manner.

The aforesaid order was pronounced in the Tribunal in the presence of the legal representatives of both sides after the conclusion of the hearing on the very day.

Brief facts of the case:

The brief facts are that during the assessment year the assessee sold a shop at the consideration of Rs.18 lacs on 17.1.2005. He declared the sale price after working out the capital gain and investment in construction of a house for residential purpose.

The Assessing Officer from the records of registry office discovered that the market value as held by the Sub-Registrar was Rs. 26, 97,000/-. The Assessing Officer opined that there is a gap of Rs. 8, 97,000/- between the market value and the amount stated by the assessee for the purpose of capital gain.

According to the Revenue, no explanation was given on behalf of the assessee. The assessee claimed exemption of capital gains under section 54B/54D/54G of the Income Tax Act. The main contention of the Revenue is that incorrect section for claiming exemption in case of capital gains was mentioned in the return filed by the assessee.

The argument on behalf of the assessee was that since there was a fixed format, the assessee could not amend the same and for the error of his Ld. Counsel, the assessee should not be penalized.

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It was also contended that since this issue came up before the Assessing Officer, the Assessing Officer should consider the exemption claimed under section 54 of the Income Tax Act.

The Judgment:

The Appellate Tribunal observed that the claim of the assessee is reflected in the assessment order wherein it was mentioned that the assessee gave a letter stating that there was mentioning of a wrong section.

The learned CIT (A) acknowledged the fact that while claiming the deduction under section 54/54F, wrong sections were mentioned by the assessee. But the Assessing Officer did not consider the contention of the assessee.

Under the above facts, the Tribunal held the opinion that even if a wrong section was mentioned by the assessee, it was the duty of the Assessing Officer to help him in a reasonable manner to provide the relief to the assessee. A correct advice by the Income Tax Department would set up an example before public at large. The Assessing Officer should o advise the assessee to assess his tax legitimately.

Accordingly the appeal of the assessee was allowed and the Assessing Officer was directed to examine the claim of the assessee.


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