2022 (6) TMI 267

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.... The order of the Commissioner of Income-tax (Appeals) dismissing the appeal is contrary to law, erroneous and unsustainable on the facts of the case. 2. The CIT(A) erred in upholding the order of the officer that the issue of assessing corpus donation as income of the Trust would not fall for consideration under sec.154 of the Act. 3. The CIT(A)] failed to appreciate that the corpus donation statutorily stands excluded from the income of the trust under sec.11(1)(d) of the Act and that the inclusion of the same as income of the Trust is an obvious and patent mistake and therefore warrants rectification of the order passed on 30.12.11. 4. The CIT(A) further failed to appreciate that as per sec.11(1)(d), the amount....

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....he assessee. On appeal, the ld. CIT(A) allowed the appeal of the assessee. On further appeal by the Department, vide order in I.T.A. No. 1668/Mds/2012 dated 13.06.2013, the Coordinate Benches of the Tribunal set aside the order of the ld. CIT(A) and reinstated the assessment order. Thereafter, the assessee filed a petition under section 154 of the Act for deleting the amount of corpus donation to the tune of Rs..2,92,75,200/- from the total income. The petition filed by the assessee under section 154 of the Act was dismissed by the Assessing Officer for the following reasons: i) When benefit u/s. 11 is denied, the entire receipts including corpus donation is taxable under the Act. ii) Taxability of corpus donations when ex....

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....yed for allowing the appeal of the assessee. It was also submitted that the corpus donation received by the assessee is part of the records and even at the time of assessment under section 143(3) of the Act and does not involve any fresh consideration of facts and also prayed for deleting the amount of corpus donation from the income of the assessee. 5. On the other hand, the ld. DR has submitted that the rectification under section 154 of the Act can only be made when glaring mistake of fact or law has been committed by the Assessing Officer while passing the assessment order and it becomes apparent from the record. It was also submitted that rectification is not possible if the question of law is debatable and pleaded for confirmation ....

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....dered the observations of the Assessing Officer and the submissions made by the appellant. To resolve the issue on hand, it is relevant to refer to the observations of the Hon'ble Supreme Court of India in the case of Volkart India (82 ITR 50)(SC) wherein it was observed 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 conceivable two opinions. A decision on a debatable point of law is not a mistake apparent from the record". Further, the Apex Court fortified this view in the case of CIT v. Hero Cycles (P) Ltd. [(1997) 94 Taxman 271 (SC)] declaring as under: "Rectification u....