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Facts
The assessee disclosed Long Term Capital Gain (LTCG) of Rs. 38,53,567/-, which was chargeable to tax at a special rate under Section 112. The CPC processed the return and considered the LTCG at double the amount offered by the assessee, i.e., Rs. 71,39,912/- instead of Rs. 35,69,956/-, leading to an excessive tax demand.
Held
The Tribunal held that the CPC made a clear mistake apparent from the record by considering the LTCG at double the amount offered by the assessee. Such a mistake was liable to be rectified. As a correction would leave no adjustment in the CPC's order, the Tribunal accepted the assessee's plea.
Key Issues
Whether the CPC's action of doubling the Long Term Capital Gain amount, instead of using the amount offered by the assessee, constituted a mistake apparent from the record requiring rectification under Section 154 of the Income Tax Act.
Sections Cited
154, 112, 254(1)
AI-generated summary — verify with the full judgment below
PER PAWAN SINGH, JUDICIAL MEMBER;
This appeal by assessee is directed against the order of ld. CIT(A) dated 05.02.2025 for A.Y. 2016-17. The ld CIT(A) rejected the application of assessee under section 154 of Income Tax Act (Act) The assessee has raised following grounds of appeal:
“1. On the facts and in the circumstances of the case, the appellant submits that the Hon’ble Commissioner of Income Tax (Appeals)S- NFAC erred in upholding the rectification order passed u/s 154 by Central Processing Centre wherein the application for rectification sought u/s 154 to rectify the mistake apparent from records was rejected. The appellant submits that the jurisdictional assessing officer be directed to rectify the mistake apparent from record and the demand raised be deleted.
2. On the facts and in the circumstances of the case, the appellant submits that the Hon’ble Commissioner of Income Tax (Appeals)S- NFAC erred in upholding the action of CPC of computing the Long Term Capital Gain chargeable to at special rate of 10% u/s 112 at Rs.
71.39.912/- in the intimation as well as rectification order passed u/s 154 instead of Rs. 35,69,956/- as per return of income, thereby doubling the long term capital gain without bringing on record any mistake apparent from records leading to excessive tax demand. The appellant submits that the long term capital gain of Rs. 35,69,956/- be taxed u/s 112 and the double addition of Rs. 71,39,912/- be deleted.
3. On the facts and in the circumstances of the case, the appellant submits that the Hon’ble Commissioner of Income Tax (Appeals)S- NFAC erred in dismissing the appeal without granting any proper opportunity and without considering appreciating the statement of facts and grounds of appeal raised by the appellant.
The appellant submits that an opportunity of being heard been given.
Rival submissions of both the parties have heard and record perused. The learned Authorised Representative (ld. AR) of the assessee submits that the assessee while filing return of income has disclosed Long Term Capital Gain (LTCG) of Rs. 38,53,567/-. Such amount is chargeable to tax at special rate under section 112 of the Act. The assessee offered gross total income at Rs. 38,96,293/-. The income chargeable at special rate was Rs. 35,69,956/-, however, the CPC considered its exact double figure i.e. Rs. 71,39,912/-. The assessee filed application for rectification under section 154, which was rejected in a mechanical manner. The appeal of the assessee was also dismissed by ld. CIT(A) by holding that there is no mistake apparent from the record which require rectification. The ld. AR while carrying us through return of income and order of CPC pointed out all the figures of total income as well as the long term capital gain taken (considered) at double amount.
On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the revenue submits that case of assessee has not been verified by assessing officer, therefore, matter may be restored back to the file of assessing officer to pass the order afresh. During the hearing, the ld. Sr. DR was confronted with the fact that this case is not the case of scrutiny rather an adjustment made by CPC in a mechanical manner, wherein as per assessee there is apparent mistake. The ld. Sr. DR for the revenue reiterated that it will be better if the matter is examined by assessing officer afresh.
We have considered the rival submissions of both the parties and have gone through the orders of lower authorities. We find that in the order of CPC, there is mistake which is apparent from the record. The CPC while processing the return of income consider one income component from assessee tht is long term capital gain(LTGC) which is chargeable to tax at special rate is considered at double of the amount which was offered by assessee, thus, it is clear mistake from the order, which was liable to be rectified. And in case such figure is corrected/rectified, no adjustment would be left in order of CPC, therefore, we accept the plea of ld. AR of the assessee and direct the assessing officer to accept the returned income.
In the result, the appeal of assesseeis allowed.
Order was pronounced in the open Court on 25/06/2025.