TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 156
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....t on facts and in law the Ld. Commissioner of Income Tax (Appeals) failed to consider and appreciate that the impugned order passed by Ld. AO u/s 154/143(3) of the Act dated 02.03.2022 is bad in law, ought to be quashed, for the following reasons: (i) That the impugned order passed by Ld. AO, based on a singular notice, issued during COVID duly complied with, without allowing proper opportunity of being heard, is against the principle of natural justice, (ii) That the impugned order has been passed without specifying the mandatory DIN on the face of the order; (iii) That the proceedings u/s 154 of the Act initiated vide Notice dated 26.04.2021 do not constitute mistake apparent from record, for the reason that the same issue was examined during assessment proceedings and constitutes change of opinion; (iv) That the addition made by the Ld. AO is not pursuant to mistake apparent from record particularly as Ld. AO had issued Notice u/s 148 of the Act dated 30.06.2021 for the reassessment. 3. That without prejudice to the aforesaid grounds of Appeal it is contended on merits, that the Ld. AO while making the impugned addition of Rs. 3,56,75,993/-, failed to consider and appre....
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....ate on the interpretation of the provision of law in the light of available facts cannot form a mistake apparent from records for which provisions of section 154 can be invoked. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of CIT vs. Keshri Metal Pvt. Ltd. (104 Taxman 360) (SC). Ld. Counsel for the assessee further submitted that the Hon'ble Supreme Court in the case of T.S. Balaram, ITO vs. M/s Volkart Bros. (82 ITR 50) (SC) held that a mistake apparent on record must be an obvious and patent mistake and not some which can be established by a long drawn process of reasoning on points on which there may be conceivably two opinions. Ld. Counsel for the assessee further placing reliance on the decision of the Apex Court in the case of CIT vs. Hero Cycles Pvt. Ltd. (228 ITR 463) submitted that the Hon'ble Apex Court held that "a point which was not examined on facts or in law cannot be dealt with as a mistake apparent on record". Reliance was also placed on the decision of the jurisdictional High Court in the case of CIT vs. Hindustan Cycles & Tubes Ltd. (147 Taxman 555) and the Hon'ble Madras High Court in the case of CIT vs. MRM Plantation Pvt. Ltd. (....
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....urt stated as to what can be an error apparent on the face of the record as under: "An error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opinions can hardly be said to be an error apparent on the face of the record". In the case of CIT vs. Keshri Metal Pvt. Ltd. (supra), the Hon'ble Supreme Court held as under: "under the provisions of section 154 there has to be a mistake apparent from the record. In other words a look at the record must show that there has been an error and that error may be rectified. The Ld. Counsel for the Revenue has not been able to specify us that it shows any apparent error from the record. Reference to documents outside the record and the law is impermissible when applying the provisions of section 154". 11. The Hon'ble jurisdictional High Court in the case of CIT vs. Hindustan Cycles and Tubes Ltd. (supra) held as under: "The provision of section 154 of the Act clearly indicate that it is only a mistake apparent on record which can be rectified by the AO and accordingly could amend the order of assessment". 12. Determination of controversial or debatable is....
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....9,25,00,000/- was created. As per the submission of the assessee, out of total area of 106,574 sq.ft .. 66,223 sq.ft. was sold during FY 2013-14, 8,932 sq.ft. was sold during FY 2014-15, 14,187 sq.ft. was capitalized by the assessee under the head Investment and 9,402 sq.ft. was transferred to fixed asset for using the same for own business. Balance 7,830 sq.ft. was shown as a part of closing stock. Since the revenue of only 8,932 sq.ft. was offered by the assessee as business income, only the proportionate provision disallowed in the previous year can be claimed against the revenue of current year. Thus the amount allowable for AY 2015-16 will be Rs. 55,62,095 (Rs. 6,63,65,280*8,932/106,574). 4. Findings of the AO: In view of above, for the year under consideration the sum of Rs. 3,56,75,993/- (4,12,38,088 - 55,62,095) has escaped assessment and is required to be added back for computing the total income of the assessee. 5. Applicability of the provisions of Section 147/ 151 to the facts of the case: In this case, assessment was completed u/s 143(3) of the IT Act, 1961 on 28.12.2017. Since 4 years from the end of relevant year has not expired in this case, the only requireme....
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....ffered by the assessee as business income, only the proportionate provision disallowed in the previous year can be claimed against the revenue of current year. Thus the amount allowable for AY 2015-16 will be Rs. 55,62,095 (Rs. 6,63,65,280*8,932/106,574). Therefore, sum of Rs. 3,56,75,993/- (4,12,38,088 - 55,62,095) may be treated as escaped income during the year under consideration. 3. In view of the above, notice u/s 148 of the IT Act was issued on 30.06.2021 and duly served upon assessee at registered email id through ITBA module after obtaining approval from the Competent Authority on 30.06.2021. 4. Further, in compliance to the judgement dated 04.05.2022 of the Hon'ble Supreme Court in the case of Union of India & Ors. Vs Ashish Agarwal (Civil Appeal No. 3005/2022), the assessee was provided with the information / material relied upon by this office which suggests that income for the relevant year has escaped assessment and was given an opportunity to file its response. 5. The assessee was provided with the information/material relied upon by this office letter dated 30.05.2022 and duly served upon assessee through ITBA module and assessee company was asked to furnis....
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....y send a written reply so as to reach me on or before the date mentioned above. Failing, it wil be presumed that you have nothing to say and action will be taken as per IT Act. Mistake apparent for the record 1. Claim regarding provision for expenses disallowed last year The assessee in the computation of income has reduced sum of Rs. 4,12,38,088/- on account of "Provision for expenses disallowed last year now allowed". As per the details submitted the assessee company on 31/03/2014 has passed a journal entry in its books of accounts, wherein a provision was created for Construction Expenses of Rs. 9,25,00,000/ -. Further, the assessee has shown following expenses, as receivable against unsold area : ECC Receivable against unsold Area Rs. 40,71,897 EDC Receivable against unsold Area Rs. 1,90,88,125 IDC Receivable against unsold Area Rs. 21,40,695 LabourCess Receivable against unsold Area Tota Rs. 8,34,003 Rs. 2,61,34,720 The assessee has contended that in A.Y. 2014-15 it has adjusted the above two figures, i.e. provision created and amount receivable against unsold area, as under Provision for expenses as on 31/03/20014 Rs. 9,25,00,000 Less : Exp....