RAMASAMY SENTHILKUMAR,SALEM vs. ITO, WARD - 1 (3), SALEM

1) The order of the learned CIT(A) is bad and erroneous in law. 2) The learned CIT(A) erred in not considering the written submission in proper perspective, as the levy of tax at the normal rates while completing assessment by order u/s 143(3) r.w.s. 147 was rectified u/s 154 of the Act by order dated 10- 12-2020. 3) The learned CIT (A) failed to consider the fact that the order levying tax u/s 115BBF, under the garb of sec.154 of the IT Act is bad and wrong, for the very levy is not amenable to rectification u/s 154, since it is a debatable issue. [Relying on dated 10-05-2019] 4) The learned CIT(A) failed to consider the settled principle 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 conceivably be two opinions” [Relying on 82 ITR 50 (SC). And for other reasons that may be adduced at the time of hearing, the appellant prays that this appeal be admitted, considered and justice be rendered.

The brief facts of the case are that the assessee is an individual and is engaged in the business of transport. He did not file return of income for the Assessment Year 2013-14 as per section 139 of the Act. Consequently, the Ld. AO issued notice under section 148 of the Act on 28-03-2018. The assessee in response to the said notice filed return of income on 28-04-2018 declaring his total income at Rs.1,80,990/-. The Ld. AO completed the assessment under section 143(3)/147 of the Act on 17-10-2018 by making an addition of Rs.2,46,896/- to the total income of the assessee under section 68 of the Act on account of unexplained credits. While adding the amount,

Heard both the parties and perused the material on record. The assessee submitted before the Ld. CIT(A) that, he did not file objections before the Ld. AO as he was not aware of the provisions of law. His further submissions were that, mistake apparent on the record must be an obvious and patent mistake which requires no long drawn process of reasoning, the issue involved in the matter is a debatable issue etc. It is submitted before us that the AO cannot amend the rate of tax by invoking section 115BBE of the Act as it is a debatable issue.

We have considered the submissions of both the parties and are of the view that, the appeal of the assessee has to be rejected. The assessee is aggrieved due to the application of special rate of tax on the added amount of Rs. 2,46,896/-. We notice that, the Ld. AO added the said amount under section 68 of the Act by treating the same as “unexplained credit”. The rate of tax which was to be imposed by the Ld. AO is as per section 115BBE of the Act. Because, addition has been made under section 68 of the Act. The rate of tax at the relevant time as per section 115BBE of the Act was “thirty per cent” which has been rightly discussed by the Ld. CIT(A) in his order dated 07-10- 2022. The Ld. AO had calculated the rate of tax at the normal rate by treating the cash credit income under the head of “business income” instead of the head of income “other source” at the time of completion of the assessment by mistake. This mistake on the part of the Ld. AO has been rectified by him under section 154 of the Act proceeding of the Act. This issue of rectification of mistake by the Ld. AO cannot be treated as debatable issue. The Ld. AO has calculated the tax as per

In the result, the appeal of the assessee is dismissed.