SYNERGY ART FOUNDATION LTD ,MUMBAI vs. DCIT, CIRCLE 8(2)(1), MUMBAI

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ITA 192/MUM/2026Status: DisposedITAT Mumbai29 July 2026AY 2003-047 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found merit in the assessee's submission that the rectification issue was linked to the pending appeal against the original assessment order. Therefore, the Tribunal set aside the CIT(A)'s order and restored the matter to the CIT(A) to be decided along with the pending appeal.

What were the facts?

The assessee sought rectification of an assessment order under Section 154, alleging transposition errors in data compilation leading to incorrect determination of undisclosed income. The Assessing Officer rejected the application, and the CIT(A) upheld this decision, stating the issues were debatable and not apparent mistakes.

What were the issues?

Whether alleged transposition errors in data compilation constitute a 'mistake apparent from the record' rectifiable under Section 154. Whether the rectification proceedings should be decided along with the pending appeal against the assessment order.

Which sections of the Income-tax Act were involved?

Section 154,Section 153A,Section 156,Section 154(2)(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “G” MUMBAI

Before: SHRI OM PRAKASH KANT & SHRI PAWAN SINGH

For Appellant: Shri J. Prabhakar, CA
For Respondent: Shri Rajgopal Parthasarathi – SR
Hearing: 22/07/2026Pronounced: 29/07/2026

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI

BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI PAWAN SINGH (JUDICIAL MEMBER)

ITA No. 192 /MUM/2026 Assessment Year: 2003-04

Synergy Art Foundation Deputy Commissioner of Income Limited, J. Prabhakar Tax – Circle 8(2)(1), Room No.624, Chartered Accountant, Vs. 6th Floor, Aayakar Bhawan, No.245, Residency Maharshi Karve Road, Mumbai – Apartments, T.T.K. Road, 400020. Chennai – 600018. PAN NO. AABCS 7467 F Appellant Respondent

Assessee by : Shri J. Prabhakar, CA

Revenue by : Shri Rajgopal Parthasarathi – SR DR.

Date of Hearing : 22/07/2026 Date of pronouncement : 29/07/2026

ORDER PER OM PRAKASH KANT, AM

This appeal, preferred by the assessee, assails the order dated 25.11.2025 passed by the learned Commissioner of Income Tax (Appeals)–51, Mumbai ["the Ld. CIT(A)"], whereby the appeal filed against the rectification order dated 25.11.2013 passed under Section 154 of the Income-tax Act, 1961 ["the Act"] came to be dismissed. The assessee has raised the following grounds of appeal:

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“1. The learned CIT(A) is not justified in dismissing the appeal against rectification order refusing to correct blatant and apparent mistakes rendered in set aside order pursuant to order of Hon'ble ITAT.

2.

The learned CIT(A) is not justified in treating inchoate and haphazard transposition errors committed in assessment dated 30-03-2013 allegedly as investigative and fact intensive not capable of rectification u/s. 154 of the Act.

3.

The learned CIT(A) is not justified in omitting to adjudicate on the illegality of passing two truncated orders u/s.154 dated 26/10/2013 and 25/11/2013 without the benefit of service of notice of demand u/s.156 therefor in tandem with the said orders framed.

4.

The learned CIT(A) failed to notice the apparent contradiction in rectification order dated 25/11/2013 and its alleged consequent demand notice dated 31/10/2013.

5.

The learned CIT(A) is not justified in ignoring the express provisions of Section 154(2)(b) mandating compulsion to rectify an assessment order and holding that mistakes involving blatant transpositional errors obliterating materials found in seized records are not apparent on record or for that matter, allegedly debatable.

6.

The learned CIT(A) is not justified in acquiescing the conduct of the Assessing Officer to retain the alleged addition of Rs. 1,85,71,741/- as undisclosed income without an iota of evidence therefor in the seized materials belonging to the assessee.

7.

The learned CIT(A) is not justified in truncating the issues for consideration filed consequent to appeal hearing and reproducing it partially to ignore the sum and substance of the blatant mistakes manifest in the assessment order

8.

The learned CIT(A) is not justified in disposing the appeal in a one-sided fashion without seeking remand report on the blatant mistakes committed in the assessment order.

9.

The learned CIT(A) is not justified in sustaining an illegal assessment of Rs.2.28.02.123/- in contra distinction to the assessed sum of Rs.1.96.21.594/- arising out the set aside order of Hon'ble ITAT 'E' Bench in ITA No. 5026/Mum/2011 dated 30/09/2011.

10.In any event the order of the CIT(A)-51 Mumbai is illegal, bereft of proper reasonings and made without due regard to the facts and circumstances of the appellant's case and the law applicable thereto.

11.

Your appellant craves the indulgence of the Hon'ble Income Tax Appellate Tribunal to submit additional/supplementary grounds of appeal as well as additional evidence on record in view of the appellate order without being

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rendered without substantive basis and the appeal being concluded as an empty ritual.” 2. In substance the assessee is aggrieved with the rejection of the appeal against the rectification order dated 25.11.2013 passed by the AO, in relation to assessment order dated 30.03.2013 passed u/s 143(3) r.w.s 153A of the Act.

3.

Briefly stated facts of the case are that Pursuant to the order of the Coordinate Bench of this Tribunal in ITA No. 192/M/2026, whereby the matter had been restored to the file of the Assessing Officer ["the AO"], the AO completed the assessment under Section 153A on 30.03.2013, determining the total income at Rs. 2,28,02,123/-. Aggrieved thereby, the assessee preferred an appeal before the Ld. Commissioner of Income Tax (Appeals)-38, Mumbai, and simultaneously moved an application under Section 154 before the AO, seeking rectification of certain mistakes alleged to be apparent on the face of the record, including failure to grant proper credit for taxes paid.

4.

The assessee in the rectification application pointed out that while computing the income, the AO intermingled certain data of sales viz-a-viz the parties etc. and thus in view of committing transposition errors, the purchase and sales were wrongly determined leading to wrong determination of the undisclosed expenditure in the assessment order which was never capable of reconciliation.

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5.

The ld AO however rejected the rectification application of the assessee. The AO although allowed the credit of the self-assessment tax, but not given any finding as regarding the error due to transposition of certain columns of the tables for computation of the sales of the assessee. On further appeal against the said rectification order, the Ld. CIT(A) dismissed the cause of rectification itself and held that no mistake apparent from the record was established by the assessee. The relevant finding of the Ld. CIT(A) is reproduced as under: -

“7.1 The facts of the case have been considered. The sole issue to be decided vide various grounds of appeal of the appellant is that whether the AO was correct in rejecting the appellant's rectification Petition. Upon perusal of the rectification AO to amend the assessment order and re-determine the assessable income after application filed by the appellant before the AO it is seen that the appellant wants the the AO had prepared various tables-particularly the table titled "List of paintings correcting the AQ's erroneous "cut-and-paste tables. The appellant submitted that which had sold but purchase record for the same are not found"- by adopting an arroneous "cut-and-paste" method, resulting in extensive transposition, truncation and mismatch of rows and columns when compared with the seized soft data and the 151-line sales statement furnished during assessment. It was contended that the AO had incorrectly jumbled entries, juxtaposed amounts independently of the corresponding dates, buyers and artists, and matched current-year sales only against Current-year purchases without tracing purchases recorded in earlier years, thereby treating several accounted transactions as unaccounted. The appellant therefore requested the AO to correct these patent mistakes apparent from the record by re-examining the seized material and physical invoices, reconciling all line items in accordance with Annexure A, deleting additions arising solely from such clerical and transposition errors, and thereafter re-determining the assessable income on the basis of the properly tallied data. 7.2 A mistake is considered "apparent from the record" when it is self-evident, non-debatable, and verifiable directly from the material already on record, without requiring fresh investigation or reinterpretation of complex facts. In the present case, the appellant's grievance is that the AO's tables were prepared by an erroneous cut-and-paste method, leading to transposition of rows, mismatching of amounts, truncated entries (only 89 lines copied against 151 furnished), and incorrect linkage between dates, buyers, artists, and amounts.

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7.3 Having considered the appellant's submissions, I am unable to accept the contention that the alleged discrepancies constitute a "mistake apparent from the record" within the meaning of section 154. The appellant's objections relate to the manner in which the AO compiled and interpreted the seized data, the relevancy of entries selected, the matching of purchases across years, and the alleged mis- alignment of rows and columns in the AO's working. These matters do not represent simple clerical or arithmetical mistakes that are self-evident or capable of being rectified merely by looking at the existing assessment record. Rather, they require a detailed factual re-appreciation of the seized material, a fresh verification of entries, reconciliation of sales with purchases across multiple years, and the drawing of inferences that may reasonably be debatable. Establishing the appellant's claim demands a line-by-line reconciliation of large data sets (151 line items claimed by the assessee versus truncated tables prepared by the Assessing Officer), comparison of multiple tables and seized soft- copy records, tracing purchase entries across prior years (including records generated by legacy accounting software that may lack inventory codes), and resolution of whether particular items were omitted, mis-coded or deliberately treated as "unaccounted" steps that are inherently investigative and fact- intensive. Rectification under section 154 cannot be invoked to revisit such interpretational or factual issues or to substitute the AO's appreciation of evidence with that sought by the assessee. The disputes raised by the appellant therefore fall squarely within the realm of assessment-stage factual verification and adjudication, and not within the limited scope of a "mistake apparent from record." 7.4 In view of the above, it is held that there is no anomaly in the order U/s 154 dated 25.11.2013 and the grounds of appeal are dismissed.” 6. We have heard the rival contentions and perused the material on record. Before us , the Ld. Counsel for the assessee submitted that the appeal against the assessment order passed under Section 153A on 30.03.2013 is still pending adjudication before the First Appellate Authority, and that the subject-matter of the present rectification proceedings — namely, the correctness of the quantum of undisclosed income determined in that very assessment order — is inextricably linked with, and ought properly to be decided along with, the said pending appeal.

Synergy Art Foundation Limited 6 ITA No. 192/MUM/2026

7.

We find merit in this submission. It is not in dispute that the assessee, while assailing the assessment order on merits, also pursued the alternate remedy of rectification under Section 154, without success. Both proceedings, however, turn upon a common question, namely, the correct determination of the assessee's total undisclosed income for the year under consideration on a reconciled reading of the seized material. In the interest of judicial consistency and coherent determination of the assessee's true income, we are, therefore, of the considered view that the ends of justice would be best served by consolidating the two proceedings before the First Appellate Authority.

8.

Accordingly, without expressing any opinion on the merits of the rival contentions including the question whether the alleged errors constitute a "mistake apparent from the record" within the meaning of Section 154(2)(b) of the Act”, we deem it appropriate to set aside the order of the Ld. CIT(A) on the issue in dispute and restore the matter to the file of the ld First Appellate Authority, to be decided afresh along with the pending appeal against the assessment order dated 30.03.2013 passed under Section 153A of the Act.

9.

It has been brought to our notice that the appeal against the assessment order for the year under consideration is presently pending listed at No. CIT(A)-15-10695/2019-20, and that pursuant to instructions dated 25.11.2025 issued by the Central Board of

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Direct Taxes assigning such matters to designated Commissioners of Income Tax (Appeals)-48 to 54 at Mumbai, jurisdiction over the connected appeal also vests with one of the said designated Commissioners. We direct the jurisdictional authorities to list the present matter along with the said pending appeal, so that both may be heard and decided together in a coordinated manner, after affording adequate opportunity of hearing to both sides.

10.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open Court on 29/07/2026.

Sd/- Sd/- (PAWAN SINGH) (OM PRAKASH KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER

Mumbai; Dated: 29/07/2026 M. Ranganath Vittal , Sr. P.S.

Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.

BY ORDER, //True Copy// (Assistant Registrar) ITAT, Mumbai

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