TaxTMI 
TaxTMI 
2025 (8) TMI 841
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....73,79,914/-. The return was processed u/s 143(1) and intimation was issued accordingly. Thereafter, the assessee filed a rectification application under section 154 on 17.11.2021 pointing out two mistakes apparent from record: i. That TDS credit was short allowed at Rs. 5,10,840/- against actual available credit of Rs. 7,48,440/-. ii. That income tax provision of Rs. 7,40,475/- was already debited to Profit & Loss Account, and the same was again disallowed while computing income, resulting in double addition and overstatement of total income by Rs. 7,40,475/-. 2.2 The AO passed a rectification order dated 23.01.2024 under section 154 wherein he partly allowed the rectification by granting the correct TDS credit of Rs. 7,48,440/-, but rejected the rectification in respect of the income overstatement, observing that the income computed u/s 143(1) remains unchanged. 2.3 The assessee filed an appeal before CIT(A), contending that the error in overstatement of income due to double addition of tax provision is apparent from record and rectifiable under section 154. The Ld. CIT(A), however, held that the rectification of income was not allowable since the mistake h....
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....pellant craves leave to add, alter, modify or delete any of the grounds at the time of hearing. 4. During the course of hearing, the learned Authorised Representative, reiterated the facts and submitted that while the Assessing Officer vide rectification order dated 23.01.2024 under section 154 r.w.s. 143(1) correctly allowed the TDS credit by granting full credit of Rs. 7,48,440/-, he failed to rectify the second mistake relating to the double addition of income tax provision. It was submitted that this error is factual, arithmetical, and manifest from the return and the computation statement itself and therefore falls within the purview of a mistake apparent from record under section 154. 4.1 To substantiate the mistake, the AR referred to the audited Profit & Loss Account for the year ended 31.03.2018 and highlighted that the net profit after tax was shown at Rs. 21,87,300/-, which was after debiting income tax expense of Rs. 7,40,475/-. However, while computing taxable income, the assessee again added back Rs. 7,40,475/- thereby effectively taxing the same income twice. It was submitted that such a duplication is apparent on the face of the computation and does not requir....
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....nue and placed reliance on the findings recorded in the appellate order passed by the Ld. CIT(A). However, when queried by the Bench as to whether the error was purely arithmetical and evident from the face of the computation and P&L statement, the learned DR fairly submitted that the issue is factual in nature and left the matter to the wisdom of the Bench for appropriate adjudication in accordance with law. 6. We have carefully considered the rival submissions of the parties, the rectification order passed under section 154, the appellate order passed by the Ld. CIT(A), the grounds raised before us, and the material placed in the paper book filed by the assessee. The issue before us is limited in scope i.e. whether the Assessing Officer and the CIT(A) were justified in rejecting rectification of an apparent factual mistake, which resulted in overstatement of income by Rs. 7,40,475/-, being the amount of income tax provision added twice while computing total income. 6.1 The assessee has placed on record its ITR-6 along with audited financial statements. We note from page 18 of the paper book (i.e. audited Profit and Loss Account) that the profit after tax is Rs. 21,87,300/-,....
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.... that the income under section 143(1) remained unchanged. The Ld. CIT(A) further held that the mistake originated from the revised return filed by the assessee and not from the "base order," and hence no rectification could be granted. The CIT(A) directed that such a grievance could only be addressed by filing a petition under section 119(2)(b) before the CBDT. 6.4 We are unable to endorse this view. The return of income and the accompanying computation form part of the record of the Assessing Officer while processing the return under section 143(1). Therefore, if any mistake arises from the return itself such as - a double addition due to arithmetical error, it is a mistake apparent from record, rectifiable under section 154. 6.5 In our opinion, if it is by mistake and error or inadvertence an amount is included in the income, necessary relief has to be provided by the Assessing Officer and the powers of the CIT(A) are co-terminus with those of the AO, and he is empowered to do what the AO could have done. Hence, the CIT(A) ought to have directed rectification of the said mistake, rather than referring the assessee to section 119(2)(b), which is inapplicable in the present c....