Tribunal overturns CIT(A) order, deems Section 56(2)(viib) issue not rectifiable.

The Tribunal allowed the appeal of the assessee, ruling that the order of the CIT(A) was invalid as the issue concerning the applicability of Section 56(2)(viib) for Assessment Year 2013-14 was debatable and did not meet the criteria of a mistake apparent on record for rectification under Section 154 of the Income Tax Act, 1961.

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Issues:
Appeal against order of CIT(A) - Validity of Section 56(2)(viib) application for Assessment Year 2013-14 - Rectification u/s 154 of the Income Tax Act, 1961.

Analysis:

Issue 1: Appeal against CIT(A) Order
The appeal was filed against the order of the Learned Commissioner of Income Tax (Appeals) for the Assessment Year 2013-14, where the CIT(A) initially held that Section 56(2)(viib) of the Act was not applicable for that year. The appellant contended that the amendment was for the Financial Year 2013-14, corresponding to the Assessment Year 2014-15, making it a debatable issue. The Tribunal agreed that the applicability of the amendment was debatable, citing a similar judgment by the Jurisdictional High Court in another case. Thus, the Tribunal held that the issue was not a mistake apparent on record and could not be rectified under Section 154 of the Act.

Issue 2: Rectification u/s 154 of the Income Tax Act
The CIT(A) passed an order under Section 154 of the Act, stating that there was a mistake apparent on record regarding the applicability of Section 56(2)(viib) from the Assessment Year 2013-14. The appellant argued that the relief granted by the CIT(A) could not be reversed merely on the basis of a change in view, especially when the issue was debatable. The Tribunal noted that the entire decision could not be reversed without a rectification order under Section 154. Consequently, the Tribunal found that the order of the CIT(A) was legally flawed as the issue was debatable and did not constitute a mistake apparent on record for rectification under Section 154 of the Act.

In conclusion, the Tribunal allowed the appeal of the assessee, holding that the order of the CIT(A) was not valid as the issue regarding the applicability of Section 56(2)(viib) for the Assessment Year 2013-14 was debatable and did not qualify as a mistake apparent on record for rectification under Section 154 of the Income Tax Act, 1961.

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