HANUMANT HOLDINGS PRIVATE LIMITED,MUMBAI vs. INCOME TAX OFFICER, AAYAKAR BHAVAN, MUMBAI

During the course of hearing, the ld. AR submitted that the limited dispute relates to the quantum of net profit to be considered for the purposes of computation of income under the normal provisions of the Act as well as for the purposes of MAT calculation u/s. 115JB of the Act. It was submitted that the assessee while filing its return of income has considered net profit as per profit and loss account amounting to

It was submitted that the matter relates to the quantum of profit which has to be considered while computing the income under the head ‘profit and gains of business and profession’ and as submitted earlier, the assessee by mistake has considered the figure of ‘profit before tax’ instead of ‘profit after tax’ and as a result, there is an increased profit

It was submitted that the Assessing Officer in para 2 of the assessment order has stated that a mistake must be patent on record and it must not be a mistake which can be discovered by a process or argument or debate and the rectification must be limited in correcting the mistake only without any further argument or debate which is the factual position in the present case as the mistake is clearly evident on the face of the financial statements and the return of income so filed by the assessee.

It was further submitted that the Assessing Officer has stated that the return of income has been processed as per the income declared by the assessee and the said return can be modified/amended by filing a revised return of income and has relied on the decision of the Hon'ble Supreme Court in the case of Goetz India Ltd. v. CIT (2006) 284 ITR 323 (SC). It was submitted that the said decision, no doubt relates to the power of the Assessing Officer, however, when the matter was carried in appeal before the ld. CIT(A), even he has failed to appreciate the same and he has infact held that the right course of action for the assessee is to pursue by way of filing a rectification application before the Assessing Officer. It was submitted that it is against the rectification order that the assessee has moved an appeal before the ld. CIT(A) and the ld. CIT(A) while noting the fact that the assessee’s grievance relates exclusively to clerical errors committed while filing the return of income specially regarding the figure of ‘profit before tax’ and add back of the provision for income tax has held that the errors made by the assessee in the return itself cannot be adjudicated in appellate proceeding and the assessee should pursue by filing the rectification application before the Assessing Officer.

The ld. DR has been heard, who has relied on the order passed by the lower authorities.

We have heard the rival contentions and perused the material available on record. We find that the matter clearly falls within the domain of rectification as it is evident on the face of the return of income, the computation of income as well as the audited financial statements so filed by the assessee. The assessee while filing the return of income in its computation under the head ‘profit and gains’ of business and profession’ has considered ‘profit before tax’ amounting to Rs. 18,16,573/- and has made separate upward adjustments of provision for tax and excess provision of tax amounting to Rs. 3,52,809/-. Therefore, where the separate adjustments have been made for provision for taxation, then the starting figure should have been the ‘profit after tax’ and not the ‘profit before tax’ and as a result, the contentions raised by the ld. AR on behalf of the assessee that the profit after tax of Rs. 14,63,764/- should have been considered is found to be acceptable. We accordingly direct the Assessing Officer to take into consideration, the profit after tax of Rs. 14,63,764/- instead of Rs. 18,16,573/- and re-compute the taxable income and the consequent tax liability in the hands of the assessee, in accordance with law.

In the result, the appeal filed by the assessee is allowed.