TaxTMI 
TaxTMI 
TaxTMI 
2022 (2) TMI 491
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....s erred both on facts and in law in confirming the addition of Rs. 3,06,32,000/- made by AO on account of provision for leave encashment. (ii) That the said addition has been confirmed despite the fact that the amount of Rs. 17,846.14 lakhs shown by the auditor in its Audit Report as against the actual provision of Rs. 17,539.82/- is purely a typographical error and can be easily verifiable from Audited Financial Statements. 4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition by indulging in surmises and conjectures without appreciating and verifying the facts on record. 5. That the assessee craves leave to add. Amend or alter any of the grounds of appeal." 2. Facts giving rise to the present appeal are that in this case, the assessee had filed its return of income through e-mode, declaring loss of Rs. 14,76,94,22,781/- on 29.09.2011. The case was processed u/s 143(2) of the Income Tax Act, 1961 ("the Act") and subsequently was taken up for scrutiny assessment and the assessment u/s 143(3) of the Act was framed vide order dated 18.03.2014/20.03.2014. Thereafter, the Assessing Officer ("AO") passed an....
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.... [PB Pg.79]. The learned AO has alleged that the amount of Rs. 17,846.14 lakhs must have booked in the profit and loss account and the same should have been added back in the computation instead of Rs. 17539.82/- and hence the AO alleged that the mistake resulted in over assessment of loss of Rs. 306.32 lakhs (17846.14- 17539.82). 5. In this regard, assessee submitted before the AO that provision for leave encashment of Rs. 17,539.82 lakh was made in the Profit & loss account and the same was added back in the computation of taxable income by the assessee. The said amount is as per the audited Balance sheet and the same has been correctly taken into account while filing the income tax returns. However, due to some clerical typographical error, the Tax audit report depicted an amount of Rs. 17,846.14 lakh on account of Leave Encashment and hence there is a difference of Rs. 306.32 lakh (17846.14 -17539.82) on this account. The assessee further submitted that there was no intention of the assessee company to evade tax payment through over assessment of loss as the correct amount of Leave encashment, as per the audited accounts is Rs. 17,539.82 lakh and the same has been correctly a....
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....ding under section 154 of the Act was highly debatable and AO has no power to review his entire assessment order and to make certain additions by passing the order under section 154 of the Act. 14. Your Honors, it is humbly submitted that the impugned rectification order passed u/s 154 of the Act is absolutely bad in law and liable to be quashed. Your Honors, the powers conferred upon the Ld. AO u/s 154 of the Act are only w.r.t 'mistakes apparent from record' in any order/ intimation passed by him under the Act. In this regard, relevant excerpts of Section 154 of the Act are also reproduced below: "154. (1) With a view to rectifying any mistake apparent from the record an income-tax authority referred to in section 116 may,- (a) amend any order passed by it under the provisions of this Act; (b) amend any intimation or deemed intimation under subsection (1) of section 143; (c) amend any intimation under sub-section (1) of section 200A; (d) amend any intimation under sub-section (1) of section 206GB." 15. This issue came up before Hon'ble Supreme Court in the case of CIT vs Keshri Metal Pvt. Limited, 1999 (3) TMI 11-Supreme Court ,Dated-18 March 1999 wherei....
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....he power of the officers mentioned in Section 154 of the Income- tax Act, 1961 to correct "any mistake apparent from the record" is undoubtedly not more than that of the High Court to entertain a writ petition on the basis of an "error apparent on the face of the record". In this case it is not necessary for us to spell out the distinction between the expressions "error apparent on the face of the record" and "mistake apparent from the record". But suffice it to say that the Income-tax Officer was wholly wrong in holding that there was a mistake apparent from the record of the assessments of the first respondent. " * . The above judgement was followed by Hon'ble Delhi Court in the case of COMMISSIONER OF INCOME TAX VERSUS MR. FEDDERS LLOYED CORPN. (P) LTD.- 2010 (9) TMI 63 - DELHI HIGH COURT Dated, 01.09.2010 wherein Hon'ble Court has held as under: 2. This reference pertains to the assessment year 1980-81. The assessee company is the manufacturer of air-Conditioners and refrigerators. It claimed investment allowance under Section 32A of the Act which was allowed by the Assessing officer in the original assessment. However, later on, the Assessing Officer issued a notic....
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....cord. A decision on a debatable point of law is not a mistake apparent from the record-see Sidhramappa v. Commissioner of Income-tax, Bombay. The power of the officers mentioned in Section 154 of the Income- tax Act, 1961 to correct "any mistake apparent from the record" is undoubtedly not more than that of the High Court to entertain a writ petition on the basis of an "error apparent on the face of the record". In this case it is not necessary for us to spell out the distinction between the expressions "error apparent on the face of the record" and "mistake apparent from the record". But suffice it to say that the Income-tax Officer was wholly wrong in holding that there was a mistake apparent from the record of the assessments of the first respondent." 3. We, thus, answer the question in favour of the assessee and against the revenue. " * The Kerala High Court in its yet another decision in the case of K.K.J. Foundations Vs The Assistant Director of Income Tax -2015 (9) TMI 612-Kerala High Court, Dated-08 September 2015,has relied upon the land mark judgments of Apex Court in the case of' S. Nagaraj v. State of Karnataka' [(1993) Supp. 4 SCC 595] and 'Ammonia Supp....
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....Auto India Pvt. Ltd. Vs. Assistant Commissioner Of Income Tax-15 (2) (2) , Mumbai, 2020 (7) TMI 642 -ITAT MUMBAI, Dated:17July, 2020 The power of rectification u/s 154 of the Act can be exercised only if there is a mistake apparent from the record of the assessment of the assessee. In other words, in order to attract the power to rectify u/s 154, it is not sufficient, if there is merely a mistake in the order sought to be rectified. The mistake could be rectified must be one apparent from the record. The plain meaning of the word "apparent" is that it must be something which appears to be so ex facie and is incapable of argument or debate. It, therefore, follows that a decision on a debatable point of law or fact or failure to apply the law to a set of facts, which remain to be investigated, cannot be corrected by way of rectification. In T.S. Balaram v. Volkart Bros. (1971) 82 ITR 50 (SC), their Lordships of the Hon'ble Supreme Court have held that 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 d....
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....t the assessee made provision for leave encashment of Rs. 17,539.82 Lakhs but the Auditor certified in the tax audit report a sum of Rs. 17846.14 Lakhs on account of leave encashment. Hence, there was mismatch between the figure claimed by the assessee and certified by the Tax Auditor. Admittedly, the assessee did not file any clarification by the Tax Auditor in this regard. In this back drop, we need to examine the correctness of action of Assessing Officer for making rectification order u/s 154 of the Act. For the sake of clarity, section 154 of the Act is reproduced herein below:- Rectification of mistake. 154. (1) With a view to rectifying any mistake apparent from the record an income-tax authority referred to in section 116 may,- (a) amend any order passed by it under the provisions of this Act ; (b) amend any intimation or deemed intimation under subsection (1) of section 143; (c) amend any intimation under sub-section (1) of section 200A; (d) amend any intimation under sub-section (1) of section 206CB. (1A) Where any matter has been considered and decided in any proceeding by way of appeal or revision relating to an order referred to in sub-section (1), the auth....