MEHER NOSHERWAN JEHANGIR ,MUMBAI vs. ITO, WARD-19(2)(2), MUMBAI

The appeal was preferred by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi *for brevity, ‘Ld.CIT(A)’) passed under section 250 of the Income-tax Act, 1961 (for brevity, ‘the Act’), date of order 04/10/2024 for A.Y. 2015-16. The impugned order was emanated from the order of the Centralised Processing Centre, Bengaluru (in brevity, ‘the AO’), passed under section 143(3) / 154 of the Act, date of order 18/07/2017.

Meher Nosherwan Jehangir 2. We have heard the submissions of the parties and reviewed the documents on record. The assessee filed a return of income under Section 139(4) of the Act, which was subsequently processed under Section 143(1) of the Act. The Ld. AR submitted that the assessee had declared a capital gain of Rs.4,06,005/- in the return of income. However, while processing the return, the CPCerroneously assessed the capital gain at Rs.19,34,657/-. This discrepancy was considered by the assessee as an inadvertent error made by the CPC. The assessee filed an application under Section 154 of the Act, seeking rectification of the intimation issued under Section 143(1). Ultimately, the assessee was informed via email on 05/02/2023 that the rectification order, dated 18/07/2017, had been issued. Upon receiving this intimation, the assessee filed an appeal in Form 35 on 02/03/2023, within 30 days of the receipt of the email. The Ld. CIT(A), however, treated the rectification order dated 18/07/2017 as the date of service and dismissed the appeal, citing a delay of more than five years in filing the appeal. The Ld.AR contended that no intimation or service of the rectification order had been received prior to the email dated 05/02/2023. Therefore, the cause of action arose only upon receiving the email, and the appeal was filed within the statutory time limit. The impugned appellate order was subsequently challenged before the ITAT. During the hearing, the Ld. AR reiterated that the assessee was informed of the rectification order only through the email dated 05/02/2023, and a copy of the said email is included in the paper book (APB, page 17). It was further submitted that the assessee had correctly declared the capital gain in the return of income, and the calculation of short-term capital gain was duly provided to the Ld. AO. However, the Meher Nosherwan Jehangir CPC, without considering the return of income and without issuing any show-cause notice, made an adjustment under Section 143(1) of the Act. The assessee also filed an affidavit before the Tribunal, affirming that the cause of action arose only on 05/02/2023, when the email from the CPC was received. This affidavit, executed before the Hon’ble Notary Public on 14/01/2025, is annexed in the paper book (APB, pages 1 & 2).