TaxTMI 
TaxTMI 
2017 (3) TMI 809
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....g a rectification order u/s 154 of the Act. 3. The facts in brief are that the assessee is a partnership firm engaged in the business of petrol pump. The assessee, for the year under consideration, has filed his return of income declaring total income of Rs. 11,73,380/- comprising income from business, house property and other sources. The return was processed u/s 143(1) of the Act and the refund of Rs. 232599/- u/s 244A of the Act was granted to the assessee. Subsequently the notice was issued u/s 148 of the Act on account of various reasons and accordingly assessment was framed u/s 147 of the Act at a total income of Rs. 20,29,710/- after making certain additions/disallowances to the total income of the assessee which are discussed herein after. The assessee, inter alia was deriving rental income from properties which was offered to tax under the head "house property" besides the rental income, the assessee received property tax for Rs. 10,38,400/- and Rs. 83,220/- respectively from the tenants which was deposited with the Municipal Authorities of West Bengal. The assessee, in his returned of income has neither shown any income of such amount nor claimed any deduction in his i....
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....ake apparent from record but in the instant case no such mistake is arising from the order of ld.CIT u/s 264 of the Act. The ld. CIT u/s 264 of the Act has just deleted the addition as prayed by the assessee and there was no such direction for adding the municipal taxes in the annual value of the properties. There was absolutely no mistake in the order passed for giving effect to the order of the ld. CIT u/s 264 of the Act. However the ld. CIT(A) after considering the submissions of the assessee has confirmed the addition of the AO by observing as under :- "The Assessing Officer was proposing to rectify the order dated 30.05.2006 and not some order dated 15.02.2008 is also borne out by the second ground of appeal in which it has been stated that the proceedings u/s.154 of the Act were initiated for rectification of the order dated 30.05.2006. It is clear from these facts and the tone and tenor of the order dated 17.10.2008 that the same was passed only with the view to amend the order dated 30.05.2006 giving effect to the order u/s 264 of the Act. Thus, it appears that it was only by mistake that the order u/s.154 dated 15.02.2008 was stated as the order sought to be rectified i....
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.... (b) that an authority cannot proceed to rectify the mistake in the order of any higher authority; and (c) that under the guise of rectification, the assessing officer cannot undo the directions of the appellate authority. 3. That the learned Commissioner of Income Tax (Appeals) both on facts and in law was not justified in confirming the Order of the Assessing Officer bringing the Corporation Tax of Rs. 10,38,400/- and Rs. 83,220/- realized from the tenants/ occupiers of the house property situated at 3, Dacres Lane and 2/6 Sarat Bose Road respectively for assessment under the head 'Income from House Property' in the rectification proceedings though such amount was neither assessed under the head 'Income from House Property' in assessment originally made under sections 147/143(3) nor so directed by the learned Commissioner in his order under section 264 of the Act. 4. That the appellant craves leave to adduce additional grounds and/or to modify, substitute or amend any of the foregoing grounds at/or before of hearing of the appeal." 5. The ld. AR before us submitted that the issue was raised before the ld. CIT u/s 264 of the Act. The AO erred in ....
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....wever, subsequently, the AO stated that the income that the municipal taxes should have been formed part of the annual value of the let out properties and accordingly he rectified the order of ld. CIT passed u/s 264 of the Act by treating the municipal taxes as part of the annual value. At the outset, we find that there was no direction in the order of the ld. CIT u/s 264 of the Act for adding the municipal taxes in the annual value of the properties. When there was no such direction then the view of the AO assuming the apparent mistake in the order of the ld. CIT u/s 264 of the Act is not sustainable in the eyes of law. The provisions of section 154 of the Act are very clear and the same can be resorted by the AO only in a case where the mistake is apparent from the records. While doing so, we find support and guidance from the judgment of the Hon'ble Supreme Court in the case of ITO Vs. Vokart Bros reported in 82 ITR 50 wherein it was 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 conceivably be two opinions. A decision on a deb....