TaxTMI 
TaxTMI 
2023 (11) TMI 232
X X X X Extracts X X X X
X X X X Extracts X X X X
....or rectification the order passed u/s 139(9) of the Act and as per provision of section 154(1)(a) of the Act the mistake apparent in such order is duly rectifiable. 1.2 The Id CIT(A) erred in holding that application filed by the assessee u/s 154 has no legal validity as the assessee has moved application against the return which has been declared invalid and defective and nonest u/s 139(9). The declaration of defective return was made by CPC by an order passed u/s 139(9) of I.Tax Act, so this order can be rectified u/s 154 of I.Tax Act. 1.3 the order passed by ld. AO was perverse, arbitrary and passed in utter disregard to principal of natural justice without providing the opportunity of being head and passing a non-speaking and non-specific order and CIT (A) further erred in dismissing the appeal filed by applicant in summary manner. 1.4 the order sought to be rectified u/s 154 of the Act was passed u/s 139(9) of the by DCIT, CPC-Bangalore by holding that "Tax payer has shown gross receipt or income under the head "Profit and gains of Business or Profession" more than Rs. 1 crore, however, Part A of the Profit and Loss Account and/or Balance Sheet Have not been filled and/o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s technical glitches in new portal. The appellant has also filled grievance on 12-07-2021 on e-filing portal vide G. No. 641052. The appellant has also given reference of CBDT circular no. 10/2021 and order of Hon'ble Supreme Court in suo-motu Writ Petition (Civil) No.3/2020 dt. 27-01-2021 regarding the limitation period stand extended on account of Covid pandemic till further order. That after considering the facts and circumstances of the case, delay of 13 days has been condoned. The assessee has raised ground of appeal with the grievance that Ld. Assessing Officer has erred in passing rectification order u/s 154 of the Income Tax Act, 1961. In this regard assessee has stated that 1. That the Ld. AO has passed the order u/s 154 of the Income Tax Act, 1961 rejecting the application of the appellant and not rectifying the mistake apparent on record is perverse arbitrary and passed in utter disregard to natural justice. 2. That the order passed by the Ld. DCIT, CPC Bangalore dated 01.03.2019 is mistake of law apparent on record in as much as there was no applicability of section 44AB in the case of Appellant thereby the invocation of section 139(9) on the ground applicabi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 1 Crore, however Part A pf the Profit and Loss Account and/or Balance Sheet have not been filed and/or the books of accounts have not been audited." Admittedly, the notice issued by CPC, to remove the defects mentioned in such notices, could not be responded by the assessee as such communication because the same were not sent on E-mail, which were inadvertently left to be accessed by the assessee. However, the CPC passed the order against the provisions of law. 2.2 The gross receipts from the business is less than Rs. 1.00 crore, hence not require to gets its account audited u/s 44AB of the Act:- As per section 44AB a person carrying on business, if his total sales, turnover or gross receipts (as the case may be) in business for the year exceed or exceeds Rs. 1 crore is compulsorily required to get his accounts audited. The gross receipt of the assessee from the business carried out by the assessee was not more than to Rs. 1 Crore, therefore the assessee was not required to get his accounts audited u/s 44AB of the Act. In this regard the reference is drawn at Page 10 of ITR form (Copy at PB Page 11) and Profit and Loss A/c at PB page 58 and on perusal to that your honour....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (i.e. jurisdictional Assessing Officer) on 21.06.2021. (Copy at PB Page 68 to 70). In this application the assessee did not seek any rectification in the return filed by it but he sought rectification in the order passed u/s 139(9) of the Act and the rectification of apparent mistake in any order is well within the scope of section 154 of the Act. 2.4 The ld AO rejected the application filed by the assessee u/s 154 in summary manner:- The ld. AO rejected the application filed by the assessee is very summary manner by holding that (i) this is not the mistake apparent from record and (ii) due to invalid return for the AY 2017-18, the application filed by assessee rejected. In this regard it is submitted that these finding of Ld. AO are perverse and not in accordance the provisions of law for the following reasons: - i) In the order passed by Ld. A.O. no where it has been mentioned that why the mistake pointed out by assessee in order passed u/s 139(9) of the Act is not mistake apparent from record. The ld. DCIT, CPC by misinterpreting the law wrongly held that the assessee was liable to get its accounts audited as its receipt was more 1 Crore, while from the ITR of the assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
....A) wrongly held that the same is not subject matter of rectification by AO as per the provisions of section 154 of IT Act, 1961. 2.6 In view of the above submission it is submitted that, the order passed by CPC u/s 139(9) of the Act was having the apparent mistake of law, which resulted the wrong invalidation the return of the assessee. The ld. AO as well as CIT (A) also wrongly rejected the plead of the assessee without any plausible reason. The humble assessee prays your honour kindly to held the return filed by the assessee is a valid return. 2.7 The assessee rely on the following decisions: - 2.7(i) Hon'ble Mumbai ITAT in the case of V. K. Patel Securities Pvt. Ltd V/s ADIT-CPC, Bangalore in ITA No. 1009/MUM/2023 dated 20.06.2023 on the identical issue gave the following finding: - 5. We heard Ld. D.R and perused the record. On a perusal of the Profit and Loss account of the assessee for the year under consideration, we notice that the gross business receipts was Rs.92,95,722/-, which is less than the threshold limit of Rs.1.00 crore prescribed u/s 44AB of the Act for getting the accounts audited. The Statement of Total income furnished by the assessee would show that....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ation u/s. 154 of the Act is placed at pages 1 and 2 of the paper book, wherein, it is noted that the assessee enclosed the details of investments/deposits for ready reference of AO and requested the AO to accept the same. The AO did not consider the same and held the return of income as invalid. The contention of ld. AR is that the assessee ready to file all the investments/deposits, because of treating return of income as invalid, the proceedings u/s. 11 will go against the assessee. We find on similar issue the Co- ordinate Bench of this Tribunal in the case of Deere & Company (supra) held that, no technicality can be allowed to operate as a speed breaker in the course of dispensation of justice. If a particular relief is legitimately due to an assessee, the authorities cannot circumscribe it by creating such circumstances leading to its denial. We find the order of CIT(A) in confirming the order of AO in treating the return of income as invalid, made the assessee remediless and there is no option to claim exemption u/s. 11 of the Act. In such circumstances, we find force in the arguments of the ld. AR that the assessee shall get an opportunity to file details of investments/dep....
X X X X Extracts X X X X
X X X X Extracts X X X X
....id return for the AY 2017-18, the application for rectification u/s 154 filed by the assessee is hereby rejected.'' In first appeal, the ld. CIT(A) has dismissed the appeal of the assessee by holding as under:- ''In this case, the rectification application filed by the appellant u/s 154 of the Income Tax Act, 1961 before the Ld. AO has no legal validity, as the assessee has moved application u/s 154 of IT Act, 1961 against the return which has been declared invalid and defective and nonest u/s 139 (9) of IT Act, 1961 and such type of declaration by CPC cannot be subject matter of rectification by AO as per the provision of section 154 of IT Act, 1961. Therefore, keeping in view of the above facts and circumstances of the case, the ground of the appeal is dismissed.'' From the above facts of the case, it is noted that the assessee did not seek any rectification which has been treated as invalid but it sought rectification in the order passed u/s 139(9) of the Act, therefore, the rectification application filed by the assessee was nothing to do with the invalid Income Tax Return and the AO held that due to invalid return for the A.Y. 2017-18, the rectification application is reje....