2023 (5) TMI 210

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....-Year ["AY"] 2011-12, the assessee has filed this appeal on following effective grounds: "(1) AO passed original order u/s 143(3) on 31/03/2014 and rectification order u/s 154 was passed on 07/05/2018; whereas rectification order was to be passed within 4 years from the end of financial year in which original order was passed; therefore, it is time barred order and same needs to be quashed. 2. In AO's rectification order u/s 154 regarding disallowance of salary and wages of Rs. 24,15,000 also confirmed by the CIT(A) was erred legally and on facts. It was also not the intention in the original assessment order and nor consistent with previous and preceding year's assessment orders." 2. Heard the learned Represent....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....vide an order dated 07.05.2018 passed u/s 154 of the act, where the impugned addition of Rs. 2,68,197/- was increased to Rs. 26,83,197/-; thereby a further addition of Rs. 24,15,000/- was made. The reason of the rectification, as pointed out by Ld. AR, is such that in the original assessment-order, the AO has talked of "5%" disallowance out of "Salary & Wages Exp." of Rs. 5,36,63,948/- according to which the amount of disallowance comes to Rs. 26,83,197/- but the AO has made disallowance of Rs. 2,68,197/- only which comes to ".5%". Hence, the differential of Rs. 26,83,197 (-) 2,68,197 = Rs. 24,15,000/- was added. 5. Aggrieved, the assessee went in first-appeal but did not succeed. Now, the assessee has come in this appeal on the grounds ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....lenged the addition of Rs. 24,15,000/- made by AO through the rectification-order dated 07.05.2018. 10. Ld. AR submitted that while passing assessment-order, the AO has rightly made an addition of Rs. 2,68,197/- which is ".5%" of the total expenditure of Rs. 5,36,63,948/-. He submitted that the mention of "5%" by AO in the assessment-order is a mistake; the amount of Rs. 2,68,197/- is very much correct. Ld. AR raised following contentions to support such a conclusion: (i) Had the AO intended to make a disallowance of Rs. 26,83,197/-, it would have easily caught his eye while drafting the assessment-order itself. (ii) Para No. 11 of the assessment-order clearly reveals that the AO show-caused the assessee to make a "reas....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... filed a rectification-application and requested the AO to make ".5%" in place of "5%". Since the assessee has not filed any such rectification-application, it is obvious that the assessee has accepted "5%". 12. In rejoinder, Ld. AR submitted that after getting assessment-order, the assessee noticed the quantum of disallowance at Rs. 2,68,197/- which was very much correct as well as intended during assessment-proceeding. Therefore, the assessee was not concerned with "5%" or ".5%" and did not visualise to file any rectification-application. Ld. AR submitted that even otherwise, non-filing of rectification application by assessee cannot be treated as assessee's acceptance to "5%". 13. We have considered rival submissions of both sides ....