2022 (7) TMI 859 - AT - Income Tax

Tribunal Upholds Income Tax Commissioner's Decision on Rectification Application for AY 2010-11

The Tribunal upheld the decision of the Commissioner of Income Tax (Appeals) to reject the rectification application challenging the inclusion of a ... Rectification u/s 154 - rectification application on the ground that the appellate order is not a speaking order on the issue involved - HELD THAT:- It was the case of the Assessee before CIT(A) that amount written back by the Assessee is not chargeable to tax on the ground that such income denotes write back of advertisement subsidy payable out of provisions for advertisement subsidy created in AY 2009-10 and the deduction for said provision has not been allowed in Assessment Year 2009-10 when it was created. CIT(A) has disposed of the rectification application against the assessee on the ground that such alleged error requires reconsideration of the entire matter and cannot be bracketed in the category of mistake apparent from record. We endorse the view taken by the CIT(A) on the touchstone of limited scope of Section 154 of the Act. In the absence of relevant facts emerging from records corroborated by documentary evidences, one cannot say that the income included by the assessee itself should be excluded for the purposes of computation. It is not known from the record that any such disallowance was carried out in the preceding assessment year 2009-10 while determining the taxable income of the assessee. The error committed thus cannot be bracketed in the league of ‘apparent error’ contemplated under Section 154 - Appeal of the assessee is dismissed exparte. Issues:Challenge to rectification order passed by CIT(A) under Section 154 of the Income Tax Act, 1961.Analysis:The appeal was filed by the assessee against the order of the Commissioner of Income Tax (Appeals) concerning the assessment order passed by the Assessing Officer under Section 143(3) r.w. Section 92CA of the Income Tax Act, 1961 for AY 2010-11. Despite multiple opportunities given, the assessee did not appear for the hearing, leading the Tribunal to proceed ex-parte due to the assessee's lack of interest. The assessee challenged the rectification order passed by the CIT(A) under Section 154 of the Act, claiming that the appellate order was not a speaking order. The issue revolved around the amount written back in AY 2010-11 out of provisions for advertisement subsidy and included in income. The assessee argued that this amount should not be taxable as it denoted a write back of advertisement subsidy payable from the previous assessment year where the deduction was not allowed. However, the CIT(A) rejected the rectification application, stating that the alleged error required reconsideration of the entire matter and did not fall under the purview of a mistake apparent from the record.The Tribunal upheld the CIT(A)'s decision, emphasizing the limited scope of Section 154 of the Act. Without concrete facts and documentary evidence, the income included by the assessee could not be excluded for computation purposes. The Tribunal noted that there was no evidence of any disallowance in the preceding assessment year, indicating that the error could not be classified as an 'apparent error' under Section 154. Consequently, the Tribunal dismissed the appeal of the assessee as exparte, affirming the decision of the CIT(A).