TaxTMI 
TaxTMI 
2026 (2) TMI 1396
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....the ITO-1(3), Raipur on 08.09.2014. Due to reallocation of jurisdiction vide order dated 15.11.2014 the case of the assessee was transferred from ITO-1(3), Raipur to ACIT-3(1), Raipur. A notice u/s 142(1) of the Act was issued to the assessee calling for certain information on 08.05.2015. However, the same was not complied with by the assessee. Due to change of incumbent, fresh notices u/s 142(1) of the Act dated 05.08.2015, 26.08.2015, 14.08.2015 and 02.09.2015 were issued to the assessee. The same were also remained un-complied with by the assessee. However, the assessee had participated in the assessment proceedings in compliance to the notice dated 08.02.2016 issued u/s 142(1) of the Act. The Assessing Officer i.e. ACIT, Circle 4(1), Raipur completed the assessment u/s 143(3) of the Act on 29.03.2016 determining the total income of the assessee at Rs. 2,30,14,131/- by re-computing the capital gain at Rs. 1,22,61,461/- on account of long term capital gain and making addition of Rs. 1 crore on account of unexplained cash credit. 3. The assessee filed an appeal before the Ld. CIT (A) challenging the addition on merit but without any success. Thereafter, the asses....
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....ssee had participated pursuant to the notice issued under section 142(1) and had not questioned the jurisdiction of the Assessing Officer. Section 124(3)(a) precludes the assessee from questioning the jurisdiction of the Assessing Officer, if he does not do so within 30 days of receipt of notice under section 142(1). (b) in the present case, the facts did not warrant the order made by the High Court. At the same time, this Court notices that the High Court had granted liberty to the concerned authority to issue appropriate notice. It is clarified, therefore, that the Assessing Officer is free to complete the assessment (in case the assessment order has not been issued) within the next 60 days. In such event, the question of limitation shall not be raised by the assessee. (c) The special leave petition is allowed in the above terms." On perusal of the case record of Shri Ravi Sherwani, PAN AZBPS6703J-AY-2013-14 the following facts emerged: (a) The return of income was filed on 29/03/2014 for Rs. 19,12,120/- before ITO-1(3), Raipur with address Dhamtari Road, Ring Road No. 1, Raipur (CG). (b) The case was selected for scrutiny th....
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....laim of cost of improvement, assessee could not be allowed to raise additional ground before Tribunal regarding non-compliance of section 143(2) and valid assumption of jurisdiction in contravention to the provisions of Sec. 124(3)(a) of the IT Act. 6. Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT has erred in quashing the assessment order as conduct of assessee by not raising the issue of Jurisdiction before Commissioner (Appeals) clearly showed that assessee agreed to assumption of jurisdiction by Assessing Officer under section 143(2), additional ground raised by assessee before Tribunal on issue of jurisdiction under section 143(2) could not be admitted. 7. Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT has erred in quashing the assessment order by holding that Sec. 124 was only about territorial Jurisdiction and not about the pecuniary Jurisdiction, whereas Sec. 124(1) clearly refers to Sec. 120(1) and Sec. 120(2) of the Act which, in turn, specify about the jurisdiction based on both territorial area as well as the income or classes of income, thus, causing a grave misca....
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.... Supreme Court in the case of ACIT vs. Saurashtra Kutch Stock Exchange Ltd. reported in (2008) 305 ITR 227 (SC) wherein it has been held that non-consideration of decision of Hon'ble Supreme Court or High Court can be a mistake apparent from record rectifiable u/s 254(2) of the Act. At the same time he also relied on the decision of the Hon'ble Supreme Court in the case of CIT vs. Reliance Telecom Limited & Anr reported in (2022) 440 ITR 1 (SC) where it has been held that the powers u/s 254(2) are only to correct and or rectify a mistake apparent from record and not beyond that. Further, he also held that the facts in the case of DCIT (Exemption) & Ors vs. Kalinga Institute of Industrial Technology (supra) are neither absolutely similar nor substantially identical. 7. However, the Hon'ble Accountant Member did not agree with the order passed by the Hon'ble Judicial Member in the MA. He was of the opinion that the issue of validity of jurisdiction by the Assessing Officer was not challenged by or questioned by the assessee within the stipulated time of 30 days or one month as per mandate of section 124(3)(a) of the Act and therefore, the assessee shall be precluded from questioni....
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....ds the exercise of jurisdiction by the tribunal u/s 254(2) of the Income Tax Act? 3. Whether the Miscellaneous Application filed by the revenue seeking recalling of tribunal's impugned order to consider the judgment of Hon'ble Apex Court in the case of DCIT(Exemption) vs. Kalinga Institute of Industrial Technology reported in [2023] 151 taxmann.com 434 (SC) (01-05-2023] having the categorical finding on the issue of assessee's entitlement to raise the question on validity of jurisdiction of AO, can be overlooked in the garb of limitation of tribunal as per provisions of section 254(2) of the Income Tax Act 1961, whereas Hon'ble Supreme Court in the case of ACIT Vs. Saurashtra Kutch Stock Exchange Ltd. (2008) 305 ITR 227 (SC) has clearly held that non-consideration of a decision of the Jurisdictional High Court or of Hon'ble Supreme court can be said to be a mistake to be 'apparent from the records' which could be rectified under section 254(2) of the Act? Questions framed by the Hon'ble Judicial Member: 1. Whether the Tribunal was correct in its reliance placed on the decisions in the cases of Durga Manikanta Traders Vs. ITO, ITA N....
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....) may be made at any stage of the proceedings, and shall not render necessary the re-issue of any notice already issued by the Assessing Officer or Assessing Officers from whom the case is transferred. 11. Referring to the provisions of section 129 of the Act, she submitted that as per the said provisions, whenever in respect of any proceeding under this Act an Income-tax authority ceases to exercise jurisdiction and is succeeded by another who has and exercises jurisdiction, the Income-tax authority so succeeding may continue the proceeding from the stage at which the proceeding was left by his predecessor. She accordingly submitted that if the first notice u/s 143(2) of the Act is validly issued for which no objection has been raised by the assessee, then the subsequent notices issued u/s 143(2) of the Act makes no difference. She submitted that once the first notice was issued in time, the Assessing Officer already had full jurisdiction. The subsequent transfers have been based on notification dated 15.11.2014 which implemented the cadre restricting. Therefore, there is no prejudice caused to the assessee. 12. She submitted that the concurrent jurisdiction vests with the I....
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.... 17. Referring to the decision of Hon'ble Chhattisgarh High Court in the case of Harish Kumar Chhabada vs. Pr.CIT vide TaxC No. 138 of 2023, order dated 08.10.2025, Ld. DR drew the attention of the Bench to para 21 of the order which reads as under: "21. As such, from the aforesaid discussion, it is quite vivid that the appellant/assessee was served with notice under Section 143(2) of the IT Act on 8-8-2013, which was served upon him on 21-8-2013 and he did not raise objection qua jurisdiction of the Assessing Officer till his appeal was decided by the CIT (Appeals) on 14-7-2016. The assessee also did not raise any objection regarding jurisdiction upon completion of his assessment. As such, the plea with regard to territorial jurisdiction of the ITO was barred by virtue of Section 124(3)(a) of the IT Act. Even otherwise, by the notification dated 15-11-2014, the territorial reallocation of wards at Raipur was undertaken and thus by operation of law, validly, the ITO, Ward-2(1), Raipur has been conferred with the jurisdiction after reallocation of wards. Therefore, the ITAT is absolutely justified in not entertaining the question with regard to jurisdiction of the AO."....
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....Limited & Anr reported in (2022) 440 ITR 1 (SC), therefore, the same being in order should be upheld. 20. So far as the argument of the Ld. DR that the provisions of section 292BB of the Act will take care of the defect, if any, is concerned, he submitted that the Hon'ble Allahabad High Court in the case of CIT vs. Salarpur Cold Storage (P.) Ltd. reported in (2014) 50 taxmann.com 105 (All) has held that failure to issue a notice under section 143(2) within prescribed period cannot be cured by taking recourse to section 292BB of the Act. 21. Referring to the decision of Hon'ble Karnataka High Court in the case of PCIT vs. Cherian Abraham reported in (2022) 444 ITR 420 (Kar), he submitted that the Hon'ble High Court in the said decision has held that failure of the Assessing Officer in issuing notice within period of limitation under section 143(2), which is a notice giving jurisdiction to the Assessing Officer to frame assessment, cannot be condoned by referring to section 292BB of the Act. 22. Referring to the decision of Hon'ble Supreme Court in the case of DCIT vs. Travel Designer India (P.) Ltd. reported in (2025) 482 ITR 283 (SC), he submitted that the Hon'ble Supreme ....
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....to the decision of Hon'ble Supreme Court in the case of Commissioner of Central Excise vs. RDC Concrete (India) Pvt Ltd reported in (2011) 12 SCC 166, he drew the attention of the Bench to para 21 of the order and submitted that the Hon'ble Supreme Court in the said decision has held that a mistake apparent on record must be an obvious and patent mistake and the mistake should not be such which can be established by a long drawn process of reasoning. The Hon'ble Supreme Court further held that while rectifying a mistake, an erroneous view of law or a debatable point cannot be decided. Moreover, incorrect application of law can also not be corrected. 25. Referring to the decision of Hon'ble Supreme Court in the case of CIT vs. Reliance Telecom Limited & Anr (supra), he submitted that the Hon'ble Supreme Court in the said decision has held that if the assessee was of the opinion that the order passed by ITAT was erroneous, either on facts or in law, in that case, the only remedy available to the assessee was to prefer the appeal before the High Court. 26. So far as the decision relied on by the Revenue in the case of DCIT (Exemption) & Ors. Vs. Kalinga Institute of Industrial T....
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....quent decision of the superior court. 29. The Ld. Counsel for the assessee referring to the decision of Hon'ble Bombay High Court in the case of Vaibhav Maruti Dombale vs. ACIT reported in (2025) 178 taxmann.com 447 (Bom) submitted that the Hon'ble High Court in the said decision has held that a subsequent ruling of a Court cannot be a ground for invoking provisions of section 254(2) of the Act. The Hon'ble High Court has held that the provisions of section 254(2) of the Act can be invoked with a view to rectify any mistake apparent from the record. Relying on various decisions placed in the paper book, he submitted that since the Hon'ble Judicial Member has elaborately discussed the issue and has dismissed the MA filed by the Revenue, therefore, the same being in accordance with law should be upheld and the MA filed by the Revenue be dismissed. 30. I have carefully perused the record and gone through the orders of both the Hon'ble Members. I have also gone through the various decisions placed before me. I find the Assessing Officer in the instant case passed the order u/s 143(3) of the Act on 29.03.2016 determining the total income of the assessee at Rs. 2,30,14,130/- a....
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....tion 142(1). The facts of the in the instant case are similar to that of DCIT (Exemption) & Ors vs. Kalinga Institute of Industrial Technology (supra), therefore, the judgment pronounced by the Hon'ble Supreme Court is squarely applicable and therefore, mistake has crept in the order of the Tribunal which calls for rectification. 33. I find the Hon'ble Judicial Member dismissed the MA filed by the Revenue on the ground that at the time of hearing the judgment of Hon'ble Supreme Court in the case of DCIT (Exemption) & Ors. Vs. Kalinga Institute of Industrial Technology reported in (2023) 151 taxmann.com 434 (SC) was not referred to by the Revenue. Further, the Hon'ble Judicial Member while deciding the issue has followed the orders of the Tribunal in the cases of Durga Manikanta Traders Vs. ITO, ITA No. 59/RPR/2019 order dated 12.12.2022 and Chowaram Dhiwar Vs. ITO, ITA No. 31/RPR/2022 order dated 28.12.2022 whose correctness can only be decided in the appellate forum before the Hon'ble High Court. While doing so, he also considered the decision of the Hon'ble Supreme Court in the case of ACIT vs. Saurashtra Kutch Stock Exchange Ltd. reported in (2008) 305 ITR 227 (SC) ....
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....be quashed for want of assumption of jurisdiction by him. It was argued that since the ACIT-4(1), Raipur i.e. the officer who was vested with the jurisdiction over the assessee for the year under consideration had assumed jurisdiction to frame the assessment on the basis of notice u/s 143(2) of the Act on 08.09.2014 issued by the ITO-1(3), Raipur i.e. non-jurisdictional officer, therefore, the assessment framed by him vide order u/s 143(3) dated 29.03.2016 could not be sustained and is liable to be struck down. Based on these arguments, the Tribunal, relying on various decisions allowed the additional ground raised before it and quashed the assessment framed u/s 143(3). It is also an admitted fact that on the date of hearing the decision of Hon'ble Supreme Court was not pronounced and therefore, was not cited by either of the parties. Under these circumstances, I have to see as to whether there was any apparent mistake in the order of the Tribunal so as to rectify the same or recall the same u/s 254(2) of the Act. 36. I find the Hon'ble Supreme Court in the case of CIT vs. Reliance Telecom Limited & Anr (supra) while adjudicating the power of the appellate tribunal in exercise o....
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.... Court, which as such was already filed by the assessee before the High Court, which the assessee withdrew after the order passed by the Income-tax Appellate Tribunal dated November 18, 2016 recalling its earlier order dated September 6, 2013. Therefore, as such, the order passed by the Income-tax Appellate Tribunal recalling its earlier order dated September 6, 2013 which has been passed in exercise of powers under section 254(2) of the Act is beyond the scope and ambit of the powers of the Appellate Tribunal conferred under section 254(2) of the Act. Therefore, the order passed by the Income-tax Appellate Tribunal dated November 18, 2016 recalling its earlier order dated September 6, 2013 is unsustainable, which ought to have been set aside by the High Court." 37. I find the Hon'ble Supreme Court in the case of Commissioner of Central Excise vs. RDC Concrete (India) Pvt Ltd (supra) has observed as under: "16. Upon perusal of both the orders viz. earlier order dated 4th November, 2008 and order dated 23rd November, 2009 passed in pursuance of the rectification application, we are of the view that the CESTAT exceeded its powers given to it under the provisions of Sectio....
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.... The submissions which were made before the CESTAT by the respondent-assessee while arguing the rectification application were also advanced before the CESTAT when the appeal was heard at an earlier stage. The arguments not accepted at an earlier point of time were accepted by the CESTAT after hearing the rectification application. It is strange as to how a particular decision taken by the CESTAT after considering all the relevant facts and submissions made on behalf of the parties was changed by the CESTAT. There was no mistake apparent on record when the CESTAT did not accept a submission of the respondent-assessee to the effect that the officer appointed to value the goods manufactured by assessee should not have been engaged as a cost accountant. 18. We are not impressed by the judgments cited by the learned counsel for the respondent. So far as the judgment delivered in the matter of Saci Allied Products Ltd. v. Commissioner of C. Ex., Meerut, 2005(183) E.L.T 225 (S.C.) is concerned, it pertains to sale of goods by an assessee to an independent and unrelated dealers and its effect on valuation. The said judgment pertains to a transaction with a related person in the S....
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....oes not mean obliteration of the order originally passed and its substitution by a new order. What the Revenue intends to do in the present case is precisely the substitution of the order which according to us is not permissible under the provisions of Section 22 and, therefore, the High Court was not Justified in holding that there was mistake apparent on the face of the record. In order to bring an application under Section 22, the mistake must be "apparent" from the record. Section 22 does not enable an order to be reversed by revision or by review, but permits only some error which is apparent on the face of the record to be corrected. Where an error is far from self-evident, it ceases to be an apparent error. It is, no doubt, true that a mistake capable of being rectified under Section 22 is not confined to clerical or arithmetical mistake. On the other hand, it does not cover any mistake which may be discovered by a complicated process of investigation, argument or proof. 14. As observed by this Court in Master Construction Co. (P) Ltd. v. State of Orissa an error which is apparent from record should be one which is not an error which depends for its discovery on ela....