2022 (7) TMI 809 - AT - Income Tax

Court rejects rectification applications for annual letable value determination, emphasizes evidence and legal principles

M/s. Patliputra Credit & Securities Ltd. Versus DCIT, Central Circle 23 New Delhi

M/s. Patliputra Credit & Securities Ltd. Versus DCIT, Central Circle 23 New Delhi - TMI Issues:1. Rectification of order regarding annual letable value of a flat.2. Consideration of civil suit against unauthorized occupants in assessment.3. Alleged contradictory observations by the Bench.4. Scope of rectification under Section 254(2) of the Act.Issue 1: Rectification of order regarding annual letable value of a flat:The judgment involves a case where the Assessing officer rejected the annual letable value of a flat of the assessee, considering unauthorized possession. The Bench concluded that the annual letable value could be determined based on municipal taxes due to unauthorized possession. The assessee challenged this decision, highlighting a civil suit filed against unauthorized occupants for eviction. The Bench's observations were deemed contradictory, with the assessee arguing that the civil suit was not considered. However, the Bench maintained that the assessee failed to prove any legal action against unauthorized possession, leading to a dispute over the correctness of the order.Issue 2: Consideration of civil suit against unauthorized occupants in assessment:The crux of the matter lies in the consideration of a civil suit filed by the assessee against unauthorized occupants for eviction. The assessee contended that this suit was crucial evidence that was not adequately factored into the assessment. Despite the submission of documentary evidence related to the civil suit, the Bench's decision seemed to overlook this aspect, leading to a disagreement between the parties regarding the weightage given to the civil suit in determining the annual letable value of the flat.Issue 3: Alleged contradictory observations by the Bench:The judgment highlights the contention raised by the assessee regarding contradictory observations made by the Bench. The assessee argued that the Bench's statements regarding the civil suit and legal action against unauthorized possession were inconsistent. This discrepancy in the Bench's observations formed the basis of the assessee's plea for rectification of the order. However, the Bench maintained its stance, emphasizing the need for concrete evidence of legal action against unauthorized possession to support the assessee's case.Issue 4: Scope of rectification under Section 254(2) of the Act:The judgment delves into the scope of rectification under Section 254(2) of the Act, emphasizing that the power of rectification is limited to correcting mistakes apparent from the record and not for review purposes. The Bench clarified that rectification aims to address patent errors and not to revisit or substitute the original order. Citing legal precedents, including judgments from the Delhi High Court and the Supreme Court, the judgment underscores the narrow scope of rectification under the Act, highlighting that rectification is not intended for revisiting debatable legal or factual points but for addressing clear and undisputed errors.In conclusion, the judgment dismisses the applications for rectification, emphasizing the limited scope of rectification under the Act and the need for errors to be apparent from the record for rectification to be warranted. The decision underscores the importance of concrete evidence and the adherence to legal principles in rectification proceedings.