Claim of Depreciation is to be allowed even if not claimed by the assessee. Also Commissioner (Appeals) is duty bound to entertain additional claim, if made before it.

Rakesh Singh vs. ACIT

The assessee filed its return belatedly and thereafter it filed a revised return and claimed some variations in the deductions, computation of short-term capital gains and made fresh claim of depreciation on car.

AO rejected the assessee's plea to consider the revised return. On appeal, CIT(A) affirmed the order of the AO observing that when the original return was not filed within the time prescribed under sections 139(1) or 139(2), the assessee could not file a revised return under section 139(5).

On appeal before ITAT, the bench observed that Circular No. 14(XI- 35) of 1955, dated 11-4-1955 provides that the officers of the department must not take advantage of ignorance of an assessee as to his rights and that although the responsibility for claiming refunds and reliefs rests with the assessee on whom it is imposed by law, yet (a) the officers should draw the attention of the assessees to any refund or relief to which they are entitled but which they have omitted to claim for some reason or other, and (b) freely advise them when approached by them as to their rights and liabilities and as to the procedure to be adopted for claiming refunds and reliefs.

In view of Explanation 5 to section 32 (1), the AO was duty bound to grant depreciation allowance, whether the same is claimed by the assessee or not, provided the conditions mentioned under section 32 are satisfied. No doubt, the revised return cannot be taken cognizance of since the original return was filed belatedly. However, an additional claim could be made before the appellate authority and the appellate authority is duty-bund to consider the same.

In the instant case, the Ld. CIT(A) has not examined the issue in correct perspective. The CIT(A) is empowered to consider additional claim made before him, though not made in the return filed. Therefore, in the interest of justice and equity, the case is restored to the file of CIT(A) to consider the issues afresh and to take appropriate action in accordance with the provisions of the Act.