2023 (9) TMI 498 - HC - Income Tax

Appeal dismissed as no mistake apparent on record; Assessing Officer's decision under Section 154 requires further examination.

The appeal was dismissed as both the CIT(A) and the Tribunal found no mistake apparent on record regarding the addition of unexplained cash to the ... Rectification u/s 154 - Unexplained cash - disclosure of cash was neither accepted nor was any explanation/clarification furnished by the concerned firm M/s. M.K. Ceramics during the course of assessment proceedings - Tribunal held that the provision of Section 154 of the Act can be invoked when there is a mistake which is apparent from record and about the same two views are not possible and AO has committed an error by passing the order for rectification of the assessment order under the provisions of Section 154 - HELD THAT:- We have perused the orders passed by the CIT(A) as well as the Tribunal who have arrived at concurrent findings of fact to the effect that there is no mistake apparent on record and when there are two views possible on the same facts, the Assessing Officer could not have invoked the provisions under Section 154 of the Act. When the Assessing Officer has accepted the contention of assessee while framing the regular assessment, there is no mistake apparent on record as rightly held by both CIT(A) and the Tribunal and therefore we are of the opinion that no question of law much less any substantial question of law arises from the impugned order passed by the Tribunal. Issues Involved:The issues involved in this case are:1. Whether the Appellate Tribunal erred in not considering the assessing officer's findings regarding unexplained cash during assessment proceedingsRs.2. Whether the Appellate Tribunal erred in not appreciating the unexplained cash found in possession of the assesseeRs.3. Whether the Appellate Tribunal erred in not considering the Supreme Court's findings on errors apparent on the face of the recordRs.Issue 1:The assessee, an individual, was subjected to search and seizure under Section 132 of the Income Tax Act, during which cash of Rs. 16,48,850 was recovered. The Assessing Officer issued a notice under Section 142(1) regarding the seized cash. The assessee claimed that Rs. 15,50,000 belonged to a partnership firm, M/s. M.K. Ceramics, and should not be added to their total income.Issue 2:Initially, the Assessing Officer accepted the explanation and did not make any addition based on the cash found. However, upon later findings that the partnership firm did not accept the cash as theirs, the Assessing Officer sought to rectify the assessment order under Section 154, adding Rs. 15,50,000 under Section 69A of the Act. The CIT(A) allowed the appeal, stating there was no mistake apparent on record.Issue 3:The Tribunal, considering previous court decisions, held that Section 154 can only be invoked for a mistake that is apparent from the record and not subject to differing interpretations. It was found that the Assessing Officer's addition of unexplained cash was not a clear mistake and required extensive examination. The Tribunal also noted the statement by the assessee regarding undisclosed transactions of the firm, leading to the conclusion that the rectification order was erroneous.In conclusion, both the CIT(A) and the Tribunal found no mistake apparent on record, leading to the dismissal of the appeal for lack of merits.