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Facts
The assessee filed its return for AY 2019-20 and it was processed u/s 143(1)(a) with an addition of Rs. 1,82,09,000/- u/s 50C. The assessee's rectification application u/s 154 was initially allowed, but later reversed by the AO. The CIT(A) dismissed the appeal as infructuous.
Held
The Tribunal observed that the CIT(A) had not dealt with the merits of the case and that there was an apparent mistake as admitted by the AO. Therefore, the issue was remitted back to the CIT(A) for a decision on merits.
Key Issues
Whether additions u/s 50C can be made in processing u/s 143(1)(a)? Whether the CIT(A) erred by not deciding the appeal on merits?
Sections Cited
250, 154, 143(1), 50C, 143(1)(a)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, B BENCH, PUNE
Before: Dr. MANISH BORAD & SHRI VINAY BHAMORE
Assessee by : Shri Pramod Shingte Revenue by : Shri Ganesh B. Budruk-Additional CIT Date of hearing : 28.04.2025 Date of pronouncement : 13.05.2025 आदेश/ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
This appeal at the instance of the assessee is directed against the order passed by the NFAC/CIT(A) dated 18.01.2025 framed u/s 250 of the Income Tax Act, 1961 which is arising out of order u/s 154, dated 27.10.2023.
Assessee has raised following grounds of appeal:-
1. On the facts and in the circumstances of the case and in law the Learned Assessing Officer erred in passing order under section 154 by rejecting the contention of the appellant that debatable issue cannot be considered as prima facie additions. In view of this the order under section 154 is void-ab-inito and deserves to be struck down.
2. On the facts and in the circumstances of the case and in law the CPC has erred in passing an intimation under section 143 (1) 6/07/2020 / under section 154 dated 27/10/2023 by enhancing the income by Rs. 1,82,09,000/-, by invoking provisions of section 50C of the IT Act, without appreciating the fact that provision of section 143(1)/154 does not envisage such additions, and therefore entire additions deserves to be deleted.
3. Without prejudice to the above ground and on the facts and circumstances of the case and in law the Learned Assessing Officer erred in making an addition of Rs. 1,82,09,000/-, being difference between ready reckoner value adopted for stamp duty Rs.2,37,09,000/- and actual consideration received Rs. 55,00,000/-, without appreciating the fact the said land was lease hold land therefore provisions of section 50C are not applicable and secondly without appreciating the fact that section 500 gives an option assessee to claim that actual consideration is correct. Therefore, entire additions need to be deleted Your appellant prays for deletion of entire addition. Your appellant craves for to add, alter amend, modify, delete any or all grounds of appeal before or during the course of hearing in the interest of natural justice.
Brief facts of the case are that the assessee filed its Income Tax Return for A.Y. 2019-20 on 29.02.2019 and the same was processed u/s 143(1)(a) of the Act on 06.07.2022 after making addition of Rs. 1,82,09,000/- u/s 50C of the Act. The assessee filed rectification application u/s 154 of the Act on 31.05.2023 stating that provision of section 50C are not applicable. Ld. AO allowed the assessee’s application u/s 154 stating that there was a mistake apparent from record in the order u/s 143(1)(a) of the Act. Subsequently Ld. AO again passed an order u/s 154 of the Act on 11.12.2024 stating that since there was no apparent mistake in the return processed u/s 143(1)(A) of the Act, therefore the previous order passed u/s 154 on 27.11.2024 is hereby reversed. Further the assessee challenged the order u/s 154 of the Act but failed to get any relief from the Ld. CIT(A) who dismissed the appeal treating as infructuous. Now the assessee is in appeal before this Tribunal. Ld. counsel for the assessee stated that the assessee has already challenged the order u/s 143(1)(A) before Ld. CIT(A) and the same is still pending to be disposed off. He stated that the apparent mistake has been accepted once by Ld. AO and then it has been reversed. He also submitted that addition u/s 50C of the Act cannot be made in processing of return u/s 143(1)(a) of the Act. He also stated that the Ld. CIT(A) has not dealt with the merits of the case.
On the other hand Ld. DR supported the orders of the Ld. CIT(A).
We have heard rival contentions and perused the record placed before us. We observe that the assessee sold lease holding land and building for a total consideration of Rs. 95,00,000/- Fair market value for the purpose of stamp duty was stated in the income tax return at Rs. 2,37,09,000/- Based on this information available in the return of income, CPC made an addition of Rs. 1,82,09,000/- in the return processed u/s 143(1)(A) dated 06.07.2020. This order u/s 143(1)(a) addition in the hands of assessee u/s 50C of the Act has been challenged by the assessee before Ld. CIT(A) but the appeal is still pending to be disposed off. Subsequently assessee filed an application u/s 154 of the Act stating that CPC made an apparent mistake making impugned addition and the assessee succeeded but after some time Ld. AO passed another order u/s 154 of the Act reversing the previous order. Ld. CIT(A) in the impugned order has not dealt on merits but has observed that as there was no apparent mistake in the return processed u/s 143(1)(A) of the Act no order u/s 154 of the Act was required to be passed and Ld. CIT(A) thus held assessee’s appeal as infructuous.
We further observed that the date of the order appealed against is 27.10.2023 but u/s 154 of the Act mentioned in Form 35 filed before Ld. CIT(A) is different to the date of order passed u/s 154 of the Act on 11.12.2024 and the copy of which is placed on record. We also note that Ld. AO has allowed the assessee’s application u/s 154 stating that there is an apparent mistake in the assessment order framed u/s 143(1)(a) but it was subsequently reversed by Ld. AO. Under these given facts and circumstances we find that there is an apparent mistake as appellant mistake has been admitted by Ld. AO. Therefore Ld. CIT(A) ought to have dealt with the merits of the case relating to addition u/s 50C of the Act. Since the order for appeal against order u/s 143(1)(a) of the Act is pending before the first appellate authority, we deem it appropriate to remit the issue raised on merits in the instant appeal to the file of Ld. CIT(A). Assessee is also directed to correct the contents of Form 35 and also to file necessary details in support of its grounds of appeal raised on merits and the same shall be decided by Ld. CIT(A)/NFAC by passing a speaking order in accordance with law after providing proper opportunity of hearing to the
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced on this 13th day of May, 2025.