Goetze says I cannot make a claim except by revised return. Does that stop me raising it before the CIT(A) or the Tribunal?
No. An assessee is entitled to raise before the appellate authorities not merely additional legal submissions but additional claims not made in the return. Goetze (India) was confined to the power of the assessing authority and the Supreme Court expressly said it does not touch the power of the Tribunal under s.254. The appellate authorities have jurisdiction to entertain a new ground; whether they exercise the discretion to admit it is a separate question.
Decided by the High Court (Bombay High Court — S.J. Vazifdar and M.S. Sanklecha JJ) on 2012-06-21, reported as [2012] 23 taxmann.com 23 / 208 Taxman 498 / 349 ITR 336 / 252 CTR 151 (Bom); IT Appeal No. 3908 of 2010. It bears on section 251, section 254, section 43B, section 260A of the Income Tax Act 1961, in Appeals, Assessment & Scrutiny and Penalty matters.
This is the answer to the standing departmental objection that a point not taken below cannot be taken now. It matters most for pure questions of law — a defective penalty notice, a jurisdictional defect, a limitation bar — where nothing new has to be proved and the material is already on the file. It also separates two things the department runs together: jurisdiction to entertain, and discretion to admit.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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For assessment year 2004-05 the assessee filed its return on 18 October 2004, which was processed under s.143(1) on 31 March 2005 and taken up under s.143(2). The return claimed a deduction under s.43B for SEBI fees of Rs 20 lakh, made up of two payments of Rs 10 lakh on 29 April 2004 and 16 July 2004 — payments falling in the financial year 2004-05, so relevant to assessment year 2005-06 and not deductible in the year in question. During the assessment proceedings the assessee said the claim had been made through inadvertence and claimed instead Rs 40 lakh of SEBI fees paid on 9 May 2003, which fell in the year in question and related to a provision made for financial year 2001-02. The Assessing Officer rejected the fresh claim on the ground that he had no authority to allow a deduction not claimed in the return. The assessee appealed and also applied to the Commissioner (Appeals) for the Rs 40 lakh deduction, which was allowed by order of 1 August 2008 with a direction to the Assessing Officer to allow it. The Tribunal upheld that order on 24 November 2009 and the Revenue appealed under s.260A. The assessee did not appear in the High Court and J.D. Mistri, senior counsel, was requested to appear as amicus curiae.
The Revenue's appeal was dismissed. An assessee is entitled to raise before the appellate authorities additional grounds, not merely legal submissions but additional claims not made in the return, and their jurisdiction to entertain such a claim is not confined to grounds that did not exist when the return was filed or the assessment made. Whether to permit the claim is a matter of discretion, which is a different thing from the existence of jurisdiction. Goetze (India) does not stand in the way: it decided only the power of the assessing authority to entertain a claim otherwise than by a revised return, and the Supreme Court said in terms that it does not impinge on the power of the Tribunal under s.254. On the facts, both appellate authorities had found the omission inadvertent, a finding of fact that could not be called perverse, and the Court declined to interfere either with that finding or with the exercise of discretion. The Court recorded expressly that the appellate authorities had themselves considered and allowed the claim rather than remanding it, so that the Assessing Officer had only to compute the liability in accordance with orders allowing the Rs 40 lakh (para 20).
The Court took the Revenue's two objections in turn. On Jute Corporation of India, it held that the Supreme Court's words 'if the ground so raised could not have been raised at that particular stage when the return was filed or when the assessment order was made' do not narrow the jurisdiction stated earlier in that judgment; the words are 'could not have been raised', not 'were not in existence', so they cover a ground that existed but was not taken for a reason the appellate authority finds valid, and they must be construed liberally (paras 12 to 14). Jute Corporation itself was such a case, the ground having existed when the return was filed. The Full Bench of the same Court in Ahmedabad Electricity was to the same effect, and the Court added that a later judgment does not create a ground, since judgments only declare the law (para 16). National Thermal Power was applied for the width of s.254, the purpose of assessment proceedings being to assess the correct liability in accordance with law (para 17). On Goetze (India), the Court held the Revenue's reading wrong: the decision is of two judges, expressly refers to the three-judge decision in National Thermal Power, and confines itself to the power of the assessing authority, the Supreme Court having said that it does not impinge on the power of the Tribunal under s.254 (paras 22 and 23); the Delhi Division Bench in Jai Parabolic Springs had read it the same way (para 24). Two further submissions of the amicus — that a claim may be made by letter without a revised return in a s.143(3) case, and that the Tribunal's order could be supported on a CBDT circular — were left undecided as unnecessary (paras 7 and 25).
A long line of authorities establish clearly that an assessee is entitled to raise additional grounds not merely in terms of legal submissions, but also additional claims to wit claims not made in the return filed by it.
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Handle my notice → Ask a CA on WhatsAppNo. An assessee is entitled to raise before the appellate authorities not merely additional legal submissions but additional claims not made in the return. Goetze (India) was confined to the power of the assessing authority and the Supreme Court expressly said it does not touch the power of the Tribunal under s.254. The appellate authorities have jurisdiction to entertain a new ground; whether they exercise the discretion to admit it is a separate question. This was decided by the High Court (Bombay High Court — S.J. Vazifdar and M.S. Sanklecha JJ) and bears on section 251, section 254, section 43B, section 260A of the Income Tax Act 1961. It is reported as [2012] 23 taxmann.com 23 / 208 Taxman 498 / 349 ITR 336 / 252 CTR 151 (Bom); IT Appeal No. 3908 of 2010. This is the answer to the standing departmental objection that a point not taken below cannot be taken now. It matters most for pure questions of law — a defective penalty notice, a jurisdictional defect, a limitation bar — where nothing new has to be proved and the material is already on the file. It also separates two things the department runs together: jurisdiction to entertain, and discretion to admit. If it applies to you, the first step is this: File a written application for admission of the additional ground, annexing the document the ground turns on, so the record shows nothing new is being proved.
For assessment year 2004-05 the assessee filed its return on 18 October 2004, which was processed under s.143(1) on 31 March 2005 and taken up under s.143(2). The return claimed a deduction under s.43B for SEBI fees of Rs 20 lakh, made up of two payments of Rs 10 lakh on 29 April 2004 and 16 July 2004 — payments falling in the financial year 2004-05, so relevant to assessment year 2005-06 and not deductible in the year in question. During the assessment proceedings the assessee said the claim had been made through inadvertence and claimed instead Rs 40 lakh of SEBI fees paid on 9 May 2003, which fell in the year in question and related to a provision made for financial year 2001-02. The Assessing Officer rejected the fresh claim on the ground that he had no authority to allow a deduction not claimed in the return. The assessee appealed and also applied to the Commissioner (Appeals) for the Rs 40 lakh deduction, which was allowed by order of 1 August 2008 with a direction to the Assessing Officer to allow it. The Tribunal upheld that order on 24 November 2009 and the Revenue appealed under s.260A. The assessee did not appear in the High Court and J.D. Mistri, senior counsel, was requested to appear as amicus curiae. The matter was decided on 2012-06-21 by the High Court (Bombay High Court — S.J. Vazifdar and M.S. Sanklecha JJ). On those facts the High Court held as follows. The Revenue's appeal was dismissed. An assessee is entitled to raise before the appellate authorities additional grounds, not merely legal submissions but additional claims not made in the return, and their jurisdiction to entertain such a claim is not confined to grounds that did not exist when the return was filed or the assessment made. Whether to permit the claim is a matter of discretion, which is a different thing from the existence of jurisdiction. Goetze (India) does not stand in the way: it decided only the power of the assessing authority to entertain a claim otherwise than by a revised return, and the Supreme Court said in terms that it does not impinge on the power of the Tribunal under s.254. On the facts, both appellate authorities had found the omission inadvertent, a finding of fact that could not be called perverse, and the Court declined to interfere either with that finding or with the exercise of discretion. The Court recorded expressly that the appellate authorities had themselves considered and allowed the claim rather than remanding it, so that the Assessing Officer had only to compute the liability in accordance with orders allowing the Rs 40 lakh (para 20).
The Court took the Revenue's two objections in turn. On Jute Corporation of India, it held that the Supreme Court's words 'if the ground so raised could not have been raised at that particular stage when the return was filed or when the assessment order was made' do not narrow the jurisdiction stated earlier in that judgment; the words are 'could not have been raised', not 'were not in existence', so they cover a ground that existed but was not taken for a reason the appellate authority finds valid, and they must be construed liberally (paras 12 to 14). Jute Corporation itself was such a case, the ground having existed when the return was filed. The Full Bench of the same Court in Ahmedabad Electricity was to the same effect, and the Court added that a later judgment does not create a ground, since judgments only declare the law (para 16). National Thermal Power was applied for the width of s.254, the purpose of assessment proceedings being to assess the correct liability in accordance with law (para 17). On Goetze (India), the Court held the Revenue's reading wrong: the decision is of two judges, expressly refers to the three-judge decision in National Thermal Power, and confines itself to the power of the assessing authority, the Supreme Court having said that it does not impinge on the power of the Tribunal under s.254 (paras 22 and 23); the Delhi Division Bench in Jai Parabolic Springs had read it the same way (para 24). Two further submissions of the amicus — that a claim may be made by letter without a revised return in a s.143(3) case, and that the Tribunal's order could be supported on a CBDT circular — were left undecided as unnecessary (paras 7 and 25). In the words reproduced by the source cited on this page: "A long line of authorities establish clearly that an assessee is entitled to raise additional grounds not merely in terms of legal submissions, but also additional claims to wit claims not made in the return filed by it." The decision followed or applied Jute Corpn. of India Ltd. v. CIT (1991) 187 ITR 688 (SC); National Thermal Power Co. Ltd. v. CIT (1998) 229 ITR 383 (SC); Ahmedabad Electricity Co. Ltd. v. CIT (1993) 199 ITR 351 (Bom)(FB); CIT v. Jai Parabolic Springs Ltd. (2008) 306 ITR 42 (Delhi).
It was decided by the High Court on 2012-06-21 and is reported as [2012] 23 taxmann.com 23 / 208 Taxman 498 / 349 ITR 336 / 252 CTR 151 (Bom); IT Appeal No. 3908 of 2010. Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section 251, section 254, section 43B, section 260A, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The Revenue's appeal was dismissed. An assessee is entitled to raise before the appellate authorities additional grounds, not merely legal submissions but additional claims not made in the return, and their jurisdiction to entertain such a claim is not confined to grounds that did not exist when the return was filed or the assessment made. Whether to permit the claim is a matter of discretion, which is a different thing from the existence of jurisdiction. Goetze (India) does not stand in the way: it decided only the power of the assessing authority to entertain a claim otherwise than by a revised return, and the Supreme Court said in terms that it does not impinge on the power of the Tribunal under s.254. On the facts, both appellate authorities had found the omission inadvertent, a finding of fact that could not be called perverse, and the Court declined to interfere either with that finding or with the exercise of discretion. The Court recorded expressly that the appellate authorities had themselves considered and allowed the claim rather than remanding it, so that the Assessing Officer had only to compute the liability in accordance with orders allowing the Rs 40 lakh (para 20). It arises in Appeals, Assessment & Scrutiny and Penalty matters, on section 251, section 254, section 43B, section 260A of the Income Tax Act 1961, and was decided by Bombay High Court — S.J. Vazifdar and M.S. Sanklecha JJ. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. State expressly that the ground is a question of law arising from facts already on record, and say why it was not taken earlier. Meet the Goetze objection head on by pointing to the Supreme Court's own limitation of that decision to the assessing officer's power. Do not use this to smuggle in a factual case that needs fresh evidence — that is a Rule 46A or Rule 29 problem, not an additional-ground problem.
Still good law. Applied by a later High Court. In CIT v. Perlo Telecommunication and Electronic Components India (P.) Ltd. [2022] 141 taxmann.com 387 (Mad), decided 20 September 2021 by T.S. Sivagnanam and Sathi Kumar Sukumara Kurup JJ, the Madras High Court adopted the reliance the Tribunal had placed on this judgment, holding at paras 8 and 9 that even where a claim is not made before the Assessing Officer it can be made before the appellate authorities and that the power of the Tribunal cannot be curtailed by Goetze (India). One qualification travels with the upgrade: the Supreme Court issued notice in the Revenue's special leave petition against that Madras judgment on 12 July 2022 in Appeal (C) No. 8389 of 2022 ([2022] 141 taxmann.com 388 (SC), Dr D.Y. Chandrachud and A.S. Bopanna JJ), and no order disposing of that petition was traced. The notice is against the follower, not against this judgment, and no special leave petition against this judgment was found. Nothing overruling or doubting it was traced. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The judgment is dated 21 June 2012; the 3 July 2012 date that circulates is a digest's publication date. The bench is S.J. Vazifdar and M.S. Sanklecha JJ in IT Appeal No. 3908 of 2010, the judgment delivered by Vazifdar J. The assessee did not appear and the Court heard J.D. Mistri as amicus curiae, recording its appreciation at para 2. Two things a reader should keep separate. The Court distinguishes jurisdiction from discretion: the appellate authorities have the power to entertain a fresh claim, and whether they exercise it is another question, to be decided on the facts of each case. And the Court expressly noted at para 20 that neither appellate authority had remanded the claim — both had allowed it — so the case is not authority on what happens when a fresh claim is admitted and sent back. Two submissions of the amicus, that a claim may be made by letter without a revised return in a s.143(3) case and that a CBDT circular supported the Tribunal, were left undecided. The judgment has now been read. It establishes that the appellate authorities have jurisdiction to entertain a new claim and that the discretion is theirs, but it does not say when the discretion must be exercised in the assessee's favour, and it does not deal with a case where the Tribunal declines to admit a legal ground raised for the first time before it. It is about a deduction claim, not a penalty notice. Two points argued before it — whether a claim may be made by letter without a revised return in a s.143(3) assessment, and the effect of the CBDT circular relied on — were left undecided. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The Revenue's appeal was dismissed. An assessee is entitled to raise before the appellate authorities additional grounds, not merely legal submissions but additional claims not made in the return, and their jurisdiction to entertain such a claim is not confined to grounds that did not exist when the return was filed or the assessment made. Whether to permit the claim is a matter of discretion, which is a different thing from the existence of jurisdiction. Goetze (India) does not stand in the way: it decided only the power of the assessing authority to entertain a claim otherwise than by a revised return, and the Supreme Court said in terms that it does not impinge on the power of the Tribunal under s.254. On the facts, both appellate authorities had found the omission inadvertent, a finding of fact that could not be called perverse, and the Court declined to interfere either with that finding or with the exercise of discretion. The Court recorded expressly that the appellate authorities had themselves considered and allowed the claim rather than remanding it, so that the Assessing Officer had only to compute the liability in accordance with orders allowing the Rs 40 lakh (para 20).
TaxSphere, “CIT v Pruthvi Brokers & Shareholders”, https://taxnotice.vittsphere.com/caselaw/case/cit-v-pruthvi-brokers-additional-ground/ (validity last checked 2026-08-20)
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