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Income Tax Appellate Tribunal, NAGPUR BENCH : NAGPUR
Before: SHRI SATBEER SINGH GODARA & SHRI DR. DIPAK P. RIPOTE
[THROUGH VIRTUAL HEARING AT PUNE] BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER I.T.A.No.102/NAG./2022 Assessment Year 2013-2014 Shri Pramod Marotrao The DCIT, Amravati And Waylalwar, 1, Waylalwar Chandrapur Circle, Aayakar House, At – Post & Tah. Bhavan, Ambapeth, Chamorshi, Dist. vs. Amravati - 444 601 Gadchiroli. Maharashtra. Maharashtra PIN – 442 606. PAN AANPW4864F (Appellant) (Respondent) For Revenue : Shri Abhay Y Marathe, Sr.DR For Assessee : Shri Pavan Ved Date of Hearing : 27.02.2024 Date of Pronouncement : 29.02.2024 ORDER PER SATBEER SINGH GODARA, J.M. This assessee’s appeal for assessment year 2013-2014, arises against the National Faceless Appeal Centre [in short the “NFAC”] Delhi’s Din and Order No. ITBA/NFAC/S/250/2021- 22/1042101177(1), dated 30.03.2022, involving proceedings u/s. 154 of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties. Case file perused.
The Revenue pleads the following substantive grounds in the instant appeal :
2 ITA.No.102/NAG./2022 1. “On the facts and circumstances of the case and in law, the Id. CIT(A) erred in directing the AO to make adjustment in business income and recompute the taxable income after verifying the Audit Report filed with the Return on admitting that claim of expenditure not shown in the return of income is a clear mistake while the AO has rightly rejected the applicant’s application u/s 154 of the I.T. Act, 1961 by holding that the mistake was not apparent from record in view of Section 154(1) of the Income Tax Act and on the fact that assessee himself has declared total income of Rs.2,05,25,160/- in the Return of Income filed on 10.12.2014 for A.Y.2013-14.
2. On the facts and circumstances of the case and in law, the Id. CIT(A) erred in admitting that claim of expenditure not shown in the return of income is a clear mistake without appreciating the decision of Hon’ble Supreme Court of India in the case of Goetz India Vs CIT 157 Taxmann 1 (SC) in which it was held that a fresh claim cannot be admitted otherwise than by a revised return.
3. On the facts and circumstances of the case and in law, the Id. CIT(A) erred in directing the Assessing Officer to verify the Audit report filed along with the return and make necessary adjustment of business income and recomputed the taxable income resulting into setting aside the issue without appreciating that Section 251(1)(a) of the I.T. Act is amended and the portion beginning with the words “or he may set aside” was omitted by the Finance Act, 2001 w.e.f. 01.06.2001.
3 ITA.No.102/NAG./2022 4. Any other ground which may be taken with the permission of Hon’ble ITAT.”
Both the learned representatives next invited our attention to the NFAC’s discussion accepting the assessee’s rectification prayer in question reading as under :
4 ITA.No.102/NAG./2022
Both the learned representatives reiterated their respective stands against and in support of the correctness of the NFAC’s above extracted findings granting rectification relief to the assessee. We wish to make it clear first of all that there is no dispute on facts i.e., assessee’s return was filed on 10.12.2014 declaring total income of Rs.2,05,25,160/- followed by it’s sec.143(1) “processing” dated 11.01.2015 accepting the same, thereby raising a demand of Rs.81,36,008/-. The assessee thereafter filed it’s rectification dated 18.02.2019 claiming re- computation of income as per P & L A/c and audit report. The Assessing Officer passed his rejection order u/sec.154 going by the assessee’s returned income only. He further held that it was not an instance of a rectifiable mistake in latter part of the said order. The 5 ITA.No.102/NAG./2022 NFAC has admittedly reversed the Assessing Officer’s action as per his above extracted detailed discussion.
This leaves Revenue aggrieved.
It is in this factual backdrop that the first and foremost issue which arises for our apt adjudication is that of maintainability of the assessee’s rectification itself. As it has already come on record, the Assessing Officer had rejected the assessee’s rectification going by the relevant figures in his return of income only. Mr. Ved vehemently submits as per the NFAC’s detailed discussion that such a high rate of profit is unbelievable in assessee’s line of business when compared to the identical cases of contractors. We are afraid that such a question involving subjective adjudication of comparables in the assessee’s line of business could hardly be treated as an instance of rectification u/sec.154 proceedings going by hon’ble apex court’s landmark decision in TS Balram, ITO vs. Volkart Bros. [1971] 82 ITR 50 (SC). Their lordships have settled the law longback that purpose of sec.154 rectification is only to deal with an apparent mistakes on record than those involving detailed roving enquiries. We further wish to emphasize that the NFAC’s detailed discussion has nowhere reversed the Assessing Officer’s categoric findings on this legal aspect of maintainability of assessee’s rectification petition. Nor the assessee’s had raised any such ground as per his Form-35 before us.
6 ITA.No.102/NAG./2022 5.1. Mr. Ved next submitted that the Revenue has wrongly quoted the case law of Goetze (India) Ltd. vs. CIT [2006] 204 CTR 182 (SC) wherein their lordships’ made it amply clear that powers of appellate authority(ies) exercising their respective jurisdiction(s) under the provisions of the Act is not impinged upon for the purpose of entertaining a new claim. We are of the considered view that the said judicial precedent nowhere dealt with an instance of sec.154 rectification. Be that as it may, once we have concluded that the assessee’s rectification itself is not maintainable in the peculiar facts of the instant case wherein the Assessing Officer’s clear-cut findings have not been reversed by the NFAC’s; all other aspects deserve to be treated as academic only. The Revenue succeeds in it’s first and foremost substantive grievance in very terms. Ordered accordingly.
This Revenue’s appeal is allowed in above terms.
Order pronounced in the open Court on 29.02.2024.