Tribunal grants rectification, directs deletion of surcharge, and provides relief to taxpayer.

The Tribunal allowed the appeal, finding that the rectification application filed within the limitation period sought to rectify the order dated 18.03.2014. The AO was directed to delete the surcharge and provide relief to the assessee.

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Issues Involved:

1. Dismissal of appeal due to application under section 154 not filed within four years.
2. Incorrect finding regarding the timing of the original rectification application.
3. Failure to address binding judgments cited by the assessee.

Summary:

1. Dismissal of Appeal Due to Application Under Section 154 Not Filed Within Four Years:
The assessee argued that the CIT(A) erred in dismissing the appeal on the grounds that the application under section 154 was not filed within the prescribed four-year period. The assessee contended that the original rectification application was filed on 01.07.2016, against the order dated 18.03.2014, thus within the time limit.

2. Incorrect Finding Regarding the Timing of the Original Rectification Application:
The assessee submitted that the AO passed an order under section 245D(4) on 14.02.2011, followed by a consequential order on 05.04.2011. The AO then issued an order under section 154 on 18.03.2014, raising further demands. The assessee filed a rectification application on 01.07.2016, referencing the Supreme Court's decision in Vatika Township (P) Ltd., which clarified that surcharge is not chargeable for searches conducted before June 2002. The AO dismissed this application, considering it barred by limitation, and only acknowledged a later application dated 17.10.2018.

3. Failure to Address Binding Judgments Cited by the Assessee:
The CIT(A) confirmed the AO's findings, stating there was no order dated 18.03.2014 on record, thus considering the limitation period from the order dated 05.04.2011. The assessee argued that the order dated 18.03.2014 was part of the assessment record and relied on the Supreme Court's decision in Hind Wire Industries Ltd., which held that the limitation should be computed from the date of the later rectification order. The Tribunal agreed, noting that the rectification application dated 01.07.2016 was within the limitation period, as it sought to rectify the order dated 18.03.2014.

Conclusion:
The Tribunal concluded that the rectification application filed on 01.07.2016 was within the limitation period and directed the AO to delete the surcharge and provide necessary relief to the assessee. The appeal of the assessee was allowed.

Order Pronounced:
The order was pronounced in the Open Court on 26th May, 2023.

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