2025 (7) TMI 1815 - AT - Income Tax

ITAT upholds rectification under Section 154, confirms addition to income in Section 143(3) order, appeal dismissed

Rajvi Jewellers Versus Deputy Commissioner of Income Tax, Anand Circle, Anand

The ITAT Ahmedabad upheld the rectification order under section 154, confirming the addition to the assessed income made in the order under section ... Rectification u/s 154 - Addition to the assessed income determined in the order u/s 143(3) - HELD THAT:- Assessee conceded that he had nothing to state in the matter and that both in facts as well as in law, there was no mistake on part of CIT(Appeals) in upholding rectification of original order, which contained a mistake apparent from record, requiring rectification u/s 154 of the Act. Appeal of the assessee is dismissed. ISSUES: Whether the Assessing Officer was justified in passing a rectification order under section 154 of the Income Tax Act to correct an omission of originally declared income in the assessment order.Whether the rectification proceedings under section 154 of the Act are independent of the original assessment proceedings under section 143(3) of the Act.Whether the Commissioner (Appeals) erred in dismissing the appeal against the rectification order under section 154. RULINGS / HOLDINGS: The Assessing Officer correctly invoked section 154 of the Act to rectify a 'clear mistake apparent from the record' by including the originally declared income that was inadvertently omitted, thereby increasing the assessed income and tax demand.The Court held that proceedings under sections 143(3) and 154 of the Act are 'independent of each other,' and the rectification order does not require re-adjudication of the original assessment.The Commissioner (Appeals) did not err in dismissing the appeal against the rectification order, as the rectification was validly based on an apparent mistake and the assessee failed to make a valid case for interference. RATIONALE: The legal framework applied includes section 154 of the Income Tax Act, which permits rectification of 'any mistake apparent from the record' in an assessment order.The Court reaffirmed the principle that rectification proceedings are procedural and distinct from substantive assessment proceedings under section 143(3), thus allowing correction of clerical or arithmetical errors without reopening the merits of the assessment.No dissent or doctrinal shift was noted; the Court relied on established statutory interpretation of section 154 and procedural independence of rectification orders.