Appeal dismissed, confirming rectification order. AO not obliged to issue draft order under section 154.

The Tribunal dismissed the appeal, confirming the rectification order and holding that the Assessing Officer (AO) was not required to issue a draft order for rectification under section 154. Additionally, the Tribunal found no merit in the appellant's arguments regarding the rectification of other mistakes, emphasizing that rectification should not be declined on such grounds.

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Issues Involved:
1. Whether the impugned rectification order could have been passed without issuing a draft order.
2. Merits of the rectification order issued by the Assessing Officer.

Detailed Analysis:

1. Issuance of Draft Order Before Rectification:
The appellant challenged the rectification order dated 3rd October 2015, arguing that the Assessing Officer (AO) should have issued a draft rectification order under section 154 before finalizing it. The appellant contended that rectification proceedings are an extension of assessment proceedings, thus necessitating a draft order to allow the assessee to approach the Dispute Resolution Panel (DRP). The appellant cited several judicial precedents to support this claim, including the Hon’ble jurisdictional High Court’s judgment in CIT Vs C Sam India Pvt Ltd, emphasizing the importance of the draft order in providing the assessee the opportunity to object to proposed variations.

The Tribunal, however, found that section 253(1)(d) clearly provides that an order passed by an AO under section 154 in respect of an order passed under section 143(3), following DRP directions, is appealable before the Tribunal. The Tribunal noted that once the DRP has given its directions, the order passed in pursuance of such directions, or rectification thereof, can only be appealed before the Tribunal, and not before the DRP. The Tribunal also distinguished the cited judicial precedents, stating that they were made in materially different contexts and could not be applied to support the proposition that a rectification order must be treated at par with an assessment order requiring a draft order.

The Tribunal concluded that the AO was not required to issue a draft order for rectifying the mistake under section 154, and thus, the appellant’s plea on this count was dismissed.

2. Merits of the Rectification Order:
On the merits of the rectification order, the appellant acknowledged the correctness of the mistakes pointed out in the rectification order but argued that there were other mistakes in the same order that should have been rectified as well. The appellant contended that rectification of mistakes should be done in totality and not piecemeal, and that the AO should have considered all mistakes, not just those favorable to the revenue.

The Tribunal found no merit in this plea, stating that the existence of other mistakes cannot be a ground to decline rectification of the mistakes identified by the AO. The Tribunal emphasized that the remedy for other mistakes lies in seeking appropriate relief, but it does not justify canceling the rectification of the mistakes that prejudice the revenue’s interests.

The Tribunal concluded that there was no jurisdictional or substantive infirmity in the rectification order and confirmed the AO’s rectification order, thus dismissing the appeal.

Conclusion:
The Tribunal dismissed the appeal, confirming the rectification order and holding that the AO was not required to issue a draft order for rectification under section 154. The Tribunal also found no merit in the appellant’s arguments regarding the rectification of other mistakes, emphasizing that rectification should not be declined on such grounds.

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