TaxTMI 
TaxTMI 
2016 (7) TMI 262
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....other heads but carried forward the same to the subsequent year. 2.2 The return was processed under section 143(1) of the Income Tax Act, 1961 (in short 'the Act') and the case was subsequently taken up for scrutiny. The assessment was completed under section 143(3) of the Act vide order dated 02.12.2011 wherein the income of the assessee was determined at Rs. 29,80,680/- in view of certain additions/disallowances to the returned income. As returned by the assessee, the Assessing Officer (AO) also passed the order of assessment without setting off the current business loss against income from other heads. No appeal was filed by the assessee against the order of assessment for A.Y. 2009-10 dated 02.12.2011 and the matter attained finality. 2.3 Later, vide letter dated 26.12.2011 addressed to the AO, the assessee sought rectification of the order of assessment for A.Y. 2009-10 dated 02.12.2011 under section 154 of the Act claiming that there were certain mistakes apparent from the record. It was submitted, by the assessee that while verifying the order of assessment and computation of tax liability, he realized (i) that he had not set off business loss against other hea....
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....f this loss in the return of income filed. Rather, he has very categorically stated in the return that such loss was being carried forward. The assessee may have made a judgmental mistake in not claiming set-off of such loss. But, such judgmental mistake, if any, of carrying forward the toss instead of setting it off during the current assessment year does not constitute a mistake apparent from the records in view of the aforesaid discussions and the relevant provisions of the Act. The assessee also did not make any claim of set off during the course of the assessment proceedings. Hence, such loss cannot be allowed to be set-off in a proceedings u/s 154 of the I.T. Act, 1961. In view of the aforesaid reasons, I am of the opinion that the Assessing Officer was correct in rejecting the rectification petition filed by the assessee u/s 154 of the I.T. Act, 1961. The action of the Assessing Officer is, therefore, upheld. The ground of appeal filed by the assessee is dismissed." 3.1 Aggrieved by the order of the CIT(A)-23, Mumbai dated 02.07.2014, the assessee has preferred this appeal before the Tribunal raising the following grounds: - "1. On facts and circumstances of the case a....
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....n are legitimately due. (ii) CIT vs. Sankala Polymers (P) Ltd. (2012) 20 taxmann.com 378 (Karnataka), wherein it has been held that when a specific provision of the Act has not been applied, while passing an order of assessment, it constitutes a mistake apparent from record, and the authorities have the power to rectify the said mistake by invoking the provisions of section 154 of the Act. (iii) ACIT vs. Rupam Impex (2016) 66 taxmann.com 181 (Rajkot - Trib.), wherein assessee filed an application seeking rectification of the order of assessment on the ground that in computing income incorrect figures had been taken, which was rejected by the AO on the ground that there was no mistake on the fact of the record since the assessee itself had computed such figures. The Tribunal, relying on CBDT Circular No. 14 of 1955, held that tax cannot be levied on the assessee at a higher amount or rate merely because the assessee under a mistaken belief or erroneously offered income for taxation at a higher rate. (iv) Zen Tobacco (P) Ltd. (2016) 65 taxmann.com 320 (Ahmedabad - Trib) (v) Circular No. 587 dated 11.12.1990. 3.3 Per contra, the learned D.R. supported the orders of the ....
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.... on the fact that the mistake of not setting off or claiming set off of the business losses of Rs. 83,84,370/- against the other heads of income (except salary income) was committed by the assessee. This itself, we find has resulted in the error, sought to be rectified, creeping into the order of assessment as well, since the AO after accepting and determining the business loss, ought to have set off the same against other permissible/eligible heads in accordance with law as embedded in the statute. Rather, it is seen that both the authorities below have sought to justify the mistake on record as one attributable to the assessee. 3.4.4 Proceedings under the Act are not adversarial, i.e. who is responsible for the mistake is not material. On the contrary what is material is that, undoubtedly, in the case on hand there has been a mistake. The fact that the mistake is attributed/attributable to the assessee does not erase the fact that a mistake or legal remedies for a mistake has crept into the order of assessment. Basically, the purpose of assessment of income is that income of the assessee, liable to tax, has to be determined in accordance with the provisions of the Act. In thes....