TaxTMI 
TaxTMI 
2013 (8) TMI 181
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....nk although information of exempted income has been shown in Schedule -F3(ii)/F3(ix) of the return. As a result, the entire income which was exempted as per Schedule -F(ix) has been inadvertently shown as taxable. The A.O. found the issue to be complicated, therefore, referred the matter to the Additional Commissioner of Income Tax, Range -6, Jhansi under Section 144A of the I.T. Act for directions. The Additional Commissioner of Income Tax, Range-6, Jhansi has directed that there are two opinions on the issue i.e. one is of assessee's counsel and other of the Assessing Officer, that it is not a mistake apparent from the face of record. The A.O. observed that the Hon'ble Supreme Court in the case has decided that if on any point, there are two opinions, the rectification under Section 154 of the Act cannot be done. The A.O. following directions of Additional Commissioner that the issue is not covered under Section 154 of the I.T. Act, rejected the application of the assessee. 3. The assessee has challenged the impugned order of the A.O. under Section 154 of the Act before learned CIT(A). It was submitted that due to mistake in preparation of the return, the exempt income....
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....t carried forward appropriately. Therefore, it is a mistake apparent on record and entire income should have been taken by A.O., while processing return under Section 143(1), as exempt income. He has relied upon the order of the ITAT Hyderabad in the case of Sum Total Systems India (P.) Ltd. Vs. Deputy Commissioner of Income Tax, 145 TTJ 530 (Hyd.) in which on finding mistake to be arithmetic in nature, appeal of assessee was allowed. He has however submitted in the case of the assessee there is no arithmetic error in the return of income but there is an "incorrect claim" by assessee in the return of income as per explanation attached to Section 143(1) of the Act, therefore, claim of the assessee should have been allowed by the authorities below. 5. On the other hand, learned D.R. relied upon the orders of authorities below and submitted that it was mistake in the return of income and assessee did not make any claim of deduction on account of exempt income, therefore, on debatable issue application under Section 154 has been rightly rejected by the authorities below. 6. We have considered the rival submissions and material available on record. Section 143(1) of the I.T. Act p....
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.... (b) the acknowledgement of the return shall be deemed to be the intimation in a case where no sum is payable by, or refundable to, the assessee under clause (c), and where no adjustment has been made under clause (a). 6.1. Hon'ble Supreme Court in the case of T. S. Balaram, Income-Tax Officer, Company Circle IV, Bombay Vs. Volkart Brothers and others (1971) 82 ITR 50 (SC) held as under :- "A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may be conceivably two opinions. A decision on a debatable point of law is not a mistake apparent from the record." 6.2 Hon'ble Calcutta High Court in the case of Hindustan Liver Ltd. Vs. Joint Commissioner of Income Tax and others [2006] 284 ITR 42 (Cal) held as under :- "Sub-section (1) of section 154 of the Income-tax Act, 1961, clearly states the circumstances under which rectification can be made. A mistake must be apparent from the records, meaning thereby no external help either on fact or in law is required to detect such mistake. The mistake must be so obvious that it can easily be corrected, t....
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..... 154 of the IT Act. In Schedule-E of the return, the assessee has not clarified whether the assessee made a claim of deduction on account of interest on housing loan. Therefore, it is not the duty of the AO to probe the facts from the return of income while processing the return of income u/s. 143(1). Since, no claim of deduction of interest on housing loan has been made in the return of income and AO accepted the return of income filed by the assessee as it is, therefore, there was no mistake apparent on record of the Revenue Department. Thus, rectification application u/s. 154 was not maintainable in the present form. It appears to be a mistake committed by the assessee in filing the return of income, for which the assessee has been provided remedy by filing the revised return, but the assessee did not take any such step in the matter. We, therefore, do not find any justification to interfere with the order of ld. CIT(A). The appeal of the assessee has no merit and is accordingly dismissed. 5. In the result, the appeal of the assessee is dismissed." 6.5 Considering the facts of the case in the light of the relevant provisions of law and the above decisions, it is clear tha....
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....d not be substantiated and further the assessee has not claimed deduction which exceeds the specified statutory limit. It is a case of omission to claim exemption of income in the return of income, therefore, the case of the assessee does not fall in the definition of "incorrect claim" as is mentioned in Section 143(1)(a) of the Act read with its explanation. 6.9 Further the assessee claimed that in Schedule-F-3(ix) though exempt income is mentioned but no claim is made in computation of total income. Such a claim of learned counsel for assessee could not be accepted because there is no authenticity of Schedule-F under the law because the computation of total income in Part-B shall be subjected to verification which assessee has verified to be correct income. When the assessee has verified the total taxable income at Rs. 3,41,73,652/- to be correct and complete, there is no question of making any withdrawal from such statement. Schedule-F is not subject to any verification therefore, as against unverified statement in Schedule-F, the preference to verified statement on oath shall have to be given precedents and preference. Therefore, the claim of the learned counsel for assessee....