Rectification application under Section 154 rejected as no apparent mistake found in CPC's income computation

The ITAT Raipur dismissed the assessee firm's appeal challenging rejection of rectification application u/s 154. The assessee claimed CPC Bengaluru wrongly computed business income at Rs. 35,09,675 instead of nil, creating tax demand with interest u/ss 234B and 234C. However, the assessee had filed revised return on 03.09.2011 declaring income, which CPC accepted via intimation u/s 143(1) dated 24.02.2012. Since CPC's intimation was based on assessee's own revised return without adjustments, no mistake apparent from record existed warranting rectification. The AO correctly rejected the application.

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Issues involved:
The issues involved in the present appeal are the rejection of rectification application filed by the appellant under Sec. 154, assessment of total income by the AO, confirmation of AO's action by CIT(A), and the legality of the order passed after the expiry of the limitation period.

Rectification Application Rejection:
The appellant firm filed a rectification application under Sec. 154, contending that the CPC wrongly calculated its income under "Profit and gains from the business or profession." The AO rejected the application stating that the mistake was not apparent from the record and directed the appellant to pay tax within 7 days.

Assessment of Total Income:
The appellant initially declared a net taxable income of Rs. 39,44,780/-, which was later revised to Rs. 74,54,460/-. The AO assessed the total income at Rs. 74,54,460/- instead of the original declaration. The CIT(A) upheld this assessment, stating that no mistake was apparent from the record as the CPC had processed the returned income as disclosed by the appellant.

Legality of Order Passed:
The appellant raised an alternative ground challenging the legality of the order passed under Sec. 154 after the expiry of the limitation period. The CIT(A) found that the application itself was made after the limitation period, thus justifying the rejection of the application under Sec. 154.

The appellant argued that a technical error led to double taxation on the profit from the sale of land, as the net profit from the sale was wrongly included in the revised income. The appellant contended that this mistake was glaring and apparent, warranting rectification under Sec. 154. However, the authorities upheld the original assessment, stating that as the CPC had accepted the revised income declared by the appellant, no rectification was necessary.

Considering the facts and contentions presented, the Tribunal found no basis to rectify the accepted income as declared by the appellant. Upholding the decision of the lower authorities, the Tribunal dismissed the appeal. The order was pronounced on the 7th day of March, 2024.

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