AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (11) TMI 79
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.... Income-tax Officer Ward 5(3)(1), Ahmedabad (hereinafter referred to as "the Assessing Officer" for sake of brevity) in respect of adjustment made to total income of the Appellant. 2. On the facts and circumstances of the case and in law, the Ld.CIT(A) erred in not considering the explanation that was furnished by the Appellant in respect of the adjustments made to the total income. Ground No.2: Total income processed under section 143(1) was a mistake apparent on record 3. On the facts and circumstances of the case and in law, the Ld.CIT(A) erred in holding that the order passed by the AO is proper and that there is no mistake apparent from record. 4. On the facts and circumstances of the case and in law, the Ld.CIT(A) ought to have appreciated that there is no possibility of the Appellant disclosing any receipt as capital receipt. 5. On the facts and circumstances of the case and in law, the Ld.CIT(A) ought to have appreciated that the Appellant has a right to seek rectification fo an intimation under section 143(1) of the Act under the express provisions of section 154 of the Act and thus, merely because the income-tax return utility ....
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..... The assessee was of the view that in view of several decisions rendered by various courts, including the Hon'ble Jurisdictional Gujarat High Court, such one time compensation received by the assessee from his employers M/s. Areva india Pvt.Ltd. towards Cessation and termination of his employment was a "capital receipt" and hence not chargeable to tax. Accordingly, the assessee filed an application for rectification of the intimation u/s. 143(1) of the Act. Thereafter, the assessee filed another letter dated 29/07/2023 before the Assessing Officer, again seeking the rectification of the intimation u/s. 143(1) of the Act. However, the application for rectification was rejected by the Assessing Officer on the ground that the amount was not bifurcated by the assessee in the return of income and thus, the same was not a mistake for the purposes of section 154 of the Act. The Assessing Officer held that the aforesaid amount of Rs. 46,19,364/- was not shown as exempt income in the return of income of the assessee and, hence, the intimation u/s. 143(1) of the Act cannot be rectified. 4. The assessee filed appeal against the aforesaid order passed by the Ld.AO dismissing the rectificat....
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.... on different sets of facts, where either the proceedings involved were a detailed scrutiny assessment or condoning the delay in furnished revised return etc., and hence are not applicable to the facts of appellant's case. 4.7. The Hon'ble Supreme Court in the case of T. S. Balaram, /TO v Volkart Bros (1971) 82 ITR 40 (SC), 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 debatable point of law is not a mistake apparent from the record. A look at the records must show that there has been an error and that error may be rectified; Reference to documents outside the records and the law is impermissible when applying the provisions of section 154 [CIT v Keshri Metal Pvt. Ltd. (1999) 237 ITR 165 (SC)]. 4.8. It is a trite law as laid down by Hon'ble Supreme Court, in the case of State of Uttar Pradesh v. Singhara Singh AIR 1964 SC 358 as reiterated in the case of Chandra Kishore Jha v. Mahavir Prasad [1999] 8 SCC 266, that "if a statute provides for a thing to be done in a ....
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.... the aforesaid amount was not separately shown as "exempt income" and the aforesaid amount had been offered to tax by the assessee as a part of salary income itself. Accordingly, the aforesaid order passed u/s. 143(1) of the Act could not have been rectified u/s. 154 of the Act since there was no mistake apparent from the record in such order by the CPC. 7. We have heard rival contentions and perused the material on record. In the instant case, we observe that any stage of the proceedings, Department has not challenged that the aforesaid income received by the towards severance of his employment is liable to be taxed in the hands of the assessee as its taxable income. Further, on identical set of facts, the Hon'ble Gujarat High Court in the case of Arunbhai R.Naik vs. ITO reported in [2015] 64 Taxmann.com 216 (Guj.), the Hon'ble High Court held that where ex-gratia compensation paid to the assessee on his discharge was very voluntary in nature, it would not amount to compensation in terms of section 17(3)(i) of the Act. While passing the order, the Hon'ble Gujarat High Court made the following observations: "12. It has been contended on behalf of the revenue that the ma....
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....and, hence, not taxable in the hands of the assessee. While allowing the appeal of the assessee, the ITAT made the following observations: "11. On applying the ratio of the decision to the present case, the fact remains that the assessee was paid severance pay due to loss of employment because fo shutting down of business operation in India. Further, such payment takes the character of a capital receipt and cannot be considered taxable u/s. 173(3)(i) as a compensation. The assessee has received the onetime payment and it is not recurring in nature. We are of the substantiate opinion that the assessee has lost his employment which was continued from the year 2006. The letter dated 31.05.2016 was in respect of severance payment received by the assessee though specifically does not mention the term "ex-gratia" but the fact remains that the assessee has lost his employment at the instance of the employer closing down its business operations in India. We are of the considered view that the receipt of severance pay though the nomenclature is not mentioned as ex-gratia but takes the character of a capital receipt and the payment was made voluntary by the employer for loss of empl....