APEEJAY EDUCATION SOCIETY,JALANDHAR vs. DCIT (EXEMPTIONS) CIRCLE-1, CHANDIGARH

आयकर अपीलीय अिधकरण,च�ीगढ़ �ायपीठ “ए” , च�ीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH HEARING THROUGH: VIRTUAL MODE �ी लिलत कुमार, �ाियक सद� एवं �ी मनोज कुमार अ�वाल, लेखा सद� BEFORE: SHRI. LALIET KUMAR, JM & SHRI. MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ ITA No. 1631 /Chd/ 2025 िनधा�रण वष� / Assessment Year : 2022-23 Apeejay Education Society, बनाम The DCIT (Exemption) Apeejay School Building, Bhagwan Circle-1 Mahavir Marg, Jalandhar, Punjab- Chandigarh 144001 �ायी लेखा सं./PAN NO: AAATA3534F अपीलाथ�/Appellant ��थ�/Respondent िनधा�रती की ओर से/Assessee by : Shri Nirmal Mahajan, C.A राज� की ओर से/ Revenue by : Smt. Jaishree Sharma, CIT, DR सुनवाई की तारीख/Date of Hearing : 20/07/2026 उदघोषणा की तारीख/Date of Pronouncement : 03/08/2026 आदेश/Order PER LALIET KUMAR, J.M: This is an appeal filed by the Assessee against the order of the Ld. CIT, Appeal, Addl/JCIT(A)-2, Visakhapatnam dt. 08/09/2025 for the Assessment Year 2022-23. 2. At the outset, the Registry pointed out that there is a delay of 01 days in filing the present appeal. In response, an application seeking condonation of delay was filed by the Ld. Counsel for the Assessee, which has been taken on record.

2 2. That the learned JCIT(A) has erred in law and facts of the case by ignoring the figures of capital receipt mentioned in the computation of income and not considering relief to the appellant. 3. That the learned JCIT(A) has erred in law and facts of the case by not passing a speaking order and also by ignoring various case laws pointed by the appellant. 4. That the appellant craves leave to add, amend, alter, and/or delete any of the above grounds of appeal at or before the time of hearing.

6.1 Subsequently, the assessee filed an application under section 154 of the Act contending that an apparent computational error had occurred while determining its taxable income. It was submitted that, after denial of exemption under section 11 and computation of income under the provisions relating to business income, only revenue receipts and revenue expenditure ought to have been considered. However, the Assessing Officer had taken the total receipts of Rs.253,52,42,713/-, which included capital receipts, instead of the revenue receipts of Rs.232,49,13,101/- thereby allegedly considering excess receipts of Rs.21,03,29,612/-. At the same time, only revenue expenditure of Rs.189,88,43,286/- had been allowed. The assessee, therefore, claimed that the inclusion of capital receipts while restricting deduction to revenue expenditure constituted a mistake apparent from the record liable to be rectified under section 154.

6.2 The Assessing Officer, however, rejected the rectification application vide order dated 24.10.2024. He held that the issues raised by the assessee were not patent, obvious or self-evident mistakes apparent from the record, but required verification, examination and a detailed process of reasoning. The Assessing Officer observed that rectification under section 154 could be made only in respect of an indisputable and apparent error and could not be invoked where the matter involved a debatable issue or two possible views. He further noted that the issues

3 relating to the denial of exemption, treatment of receipts and allowability of expenditure formed part of the subject matter of appeal against the original assessment order. Accordingly, holding that rectification proceedings could not be used as a substitute for appellate or review proceedings, the Assessing Officer rejected the assessee’s application under section 154 of the Act.

7.1 The Ld. CIT(A) held that the relief sought by the assessee involved verification and investigation of the receipts and expenditure and could not be regarded as a mere arithmetical or patent mistake apparent from the record. It was observed that section 154 does not contemplate a review or reconsideration of an order already passed and that matters requiring examination of facts or involving two possible views fall outside the limited scope of rectification proceedings.

7.2 The Ld. CIT(A) further held that the issues concerning denial of exemption under section 11 and the allowability or computation of expenditure were already the subject matter of the appeal preferred against the original assessment order. Therefore, the said issues could not be revisited through rectification proceedings under section 154. Finding no infirmity in the order of the Assessing Officer, the Ld. CIT(E) dismissed the grounds raised by the assessee and, consequently, dismissed the appeal.

4 under section 154 of the Income-tax Act seeking rectification of the assessment order on the ground that, while treating the assessee as an Association of Persons (AOP), the Assessing Officer had failed to grant deduction in respect of the capital expenditure incurred by the assessee and had wrongly disallowed the same while computing the taxable income. According to the Ld. AR, such non-grant of deduction constituted an apparent mistake from the record warranting rectification under section 154.

11.1 The Ld. AR vehemently contended that while framing the assessment under section 143(3), the Assessing Officer denied exemption under sections 11 and 12 of the Act and proceeded to compute the income of the assessee by treating it as an Association of Persons (AOP). It was submitted that, once such a course was adopted, the computation ought to have been made in accordance with the normal provisions relating to computation of business income. According to the Ld. AR, while the Assessing Officer allowed only the revenue expenditure, he simultaneously adopted the total receipts including capital receipts, thereby resulting in an erroneous computation of taxable income. It was argued that this computational inconsistency was apparent from the assessment records themselves, required no elaborate investigation and, therefore, constituted a mistake apparent from the record liable to be rectified under section 154 of the Act. The Ld. AR further submitted that the authorities below erred in treating the issue as debatable and in rejecting the rectification application merely because the assessment order had separately been challenged in appeal. In support of the aforesaid proposition, reliance was placed upon various judicial precedents to contend that an apparent computational error is amenable to rectification under section 154 of the Act.

5 11.2 On the other hand, the Ld. DR supported the orders of the lower authorities and submitted that the grievance raised by the assessee goes to the very manner of computation of income after denial of exemption under section 11 of the Act. Such a dispute, according to the Ld. DR, necessarily requires examination of facts, interpretation of the statutory provisions governing computation of income and adjudication of rival legal contentions. It was, therefore, submitted that the controversy falls outside the limited jurisdiction conferred under section 154 and is appropriately required to be examined in the quantum appeal already pending before the appellate authority.

11.3 We find that the Ld. CIT(A), after considering the submissions of the assessee, upheld the action of the Assessing Officer by recording a categorical finding that the relief sought by the assessee was not confined to correction of a patent or arithmetical mistake but required verification and investigation into the nature of the receipts, allowability of expenditure and the correctness of the computation made in the assessment order. The Ld. CIT(A) further observed that the issues relating to denial of exemption under section 11 and computation of taxable income were already the subject matter of the quantum appeal against the assessment order and, therefore, the same could not be re-examined in proceedings under section 154, as the rectificatory jurisdiction does not extend to review or reconsideration of matters requiring detailed examination. Accordingly, the Ld. CIT(A) confirmed the order passed by the Assessing Officer rejecting the application under section 154 of the Act.

11.4 Having given our thoughtful consideration to the rival submissions, we find ourselves in agreement with the view taken by the authorities below. The undisputed factual position is that the assessment order passed under section 143(3) has already been challenged by the assessee before the appellate authority and the correctness of the computation of income is the subject matter of the said appeal. Simultaneously, the assessee invoked the provisions of section 154 by contending that the Assessing Officer, while treating the assessee as an AOP, had adopted the total receipts including capital receipts but had allowed only revenue expenditure, thereby resulting in an incorrect computation of taxable income.

11.5 The short question before us is whether such a grievance can be regarded as a "mistake apparent from the record" within the meaning of section 154 of the Act. In our considered opinion, the answer has to be in the negative. The scope and

6 ambit of section 154 stand authoritatively settled by the judgment of the Hon'ble Supreme Court, wherein it has been held that a mistake apparent from the record must be obvious, patent and self-evident and not one which requires a long-drawn process of reasoning or on which two opinions are reasonably possible. A debatable question of law or fact can never be brought within the ambit of section 154.

11.6 The aforesaid principle has been reiterated by the Hon'ble Supreme Court in ACIT v. Saurashtra Kutch Stock Exchange Ltd. (2008) 305 ITR 227 (SC). Their Lordships clarified that while non-consideration of a binding judgment may itself constitute a mistake apparent from the record, the jurisdiction under section 154 nevertheless remains confined to correction of manifest and patent errors and cannot be exercised for adjudicating contentious issues requiring appreciation of facts or interpretation of law.

11.7 Applying the aforesaid settled principles to the facts of the present case, we find that the grievance raised by the assessee is intrinsically connected with the correctness of the computation of taxable income after denial of exemption under section 11 of the Act. Whether only revenue receipts ought to have been considered, whether capital receipts were liable to be excluded, whether capital expenditure was allowable while computing income after treating the assessee as an AOP, and what would be the correct method of computation, are all questions which necessarily require examination of the assessment records, appreciation of the nature of receipts and expenditure, interpretation of the relevant statutory provisions and adjudication of rival legal contentions. Such issues cannot be decided merely by looking at the assessment order and cannot be said to constitute self-evident mistakes apparent from the record.

11.8 We also find that the very controversy sought to be agitated by the assessee in the rectification proceedings forms part of the quantum appeal pending before the appellate authority. Section 154 cannot be invoked as a substitute for appellate proceedings or as an indirect method of seeking review of the assessment order. The proper forum for adjudication of such disputed questions is the appellate proceedings where the entire computation can be examined comprehensively on facts as well as in law.

7 11.9 In view of the foregoing discussion, we find no infirmity in the order of the Ld. CIT(A) affirming the action of the Assessing Officer in rejecting the application filed under section 154 of the Act. Accordingly, the impugned order is upheld.

11.10 Before parting, we clarify that the observations made herein are confined solely to the maintainability of the rectification proceedings under section 154 of the Act. Since the quantum appeal against the assessment order is stated to be pending before the Ld. CIT(A), the assessee shall be at liberty to raise all factual and legal grounds available to it in those proceedings. The Ld. CIT(A) shall adjudicate the quantum appeal independently on its own merits, uninfluenced by any observations contained in the present order and strictly in accordance with law after affording adequate opportunity of hearing to the assessee.

Order pronounced on 03/08/2026 Sd/- Sd/- मनोज कुमार अ�वाल लिलत कुमार (MANOJ KUMAR AGGARWAL) (LALIET KUMAR) लेखा सद�/ ACCOUNTANT MEMBER �ाियक सद� /JUDICIAL MEMBER AG आदेश की �ितिलिप अ�ेिषत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��थ�/ The Respondent 3. आयकर आयु�/ CIT 4. आयकर आयु� (अपील)/ The CIT(A) 5. िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, च�ीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File

BY ORDER, ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KENDRIYA SADAN, SECTOR-9A CHANDIGARH