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Income Tax Appellate Tribunal, LUCKNOW BENCH “B”, LUCKNOW
Before: SHRI KUL BHARAT & SHRI NIKHIL CHOUDHARY
PER BENCH.: This is an appeal filed by the assessee against the order u/s 250 of Income Tax Act, 1961 (“the Act”, for short) on 23.10.2024 by the Ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi rejecting the appeal of the assessee against the order u/s 154 of the Act, passed by the Assessing Officer. The grounds of appeal are as under:-
1. “1. The CPC erred to assess the income and generate the intimation u/s 143(1) with demand of Rs.26,96.11,856/- for Assessment Year 2013-14 as the filled return ITR-7 was defective a. During the filling the ITR-7; in block “Other Details of Part A-GEN under A(i) the assessee opt “No” in answer of question “Whether one of the charitable purpose is advancement of any other object of general public utility”’ b. The assessee filled ITR-7 (for persons including companies required to furnish return under section 139(4A) Le Income Tax Return of Charitable and Religious Trust [Every person who is in receipt of the following income for which he is taxable, must file a return of income, if such income (computed before allowing any exemption under sections 11 and 12) exceeds the maximum amount not chargeable to tax: income derived from property held under trust o¢ other legal obligation wholly for or charitable purposes or religious purposes, or in part only for such purposes; or income by way of voluntary contribution on behalf’ of such trust or institution. c. As per section 139(5) clause (a) “the annexure, statements and columns in the return of income relating to computation of income chargeable under each head of income, computation of gross total income and total come have been duly filed in; 2. The CPC erred to not taking cognizance of Audit Report and Financials enclosed with the 3CA-CD as there were mistake apparent from record ie. the data filled m 11. R-? were mot as per enclosed 3CA-CD and financials enclosed with the Audit Report 3. The Ld. CIT (Exemption) erred to not to consider thy registration u/s 124 and also not taking cognizance of 1] R-7 which was filled toy AY 2013-14 And alter tilling the application u/s 119(2) by the assesses, he has not accepting to Change the jurisdiction from Range — If to Exemption even it was registered u/s 124. 4- The Ld. A.O. erred in issuing notice us 221(1) of the income tax Act, 1961 vide notice no.ITBA/COM/F/17 2019-20 1023718038(1) dated U9 01/2020 when the assessee’s application u/s 119(2) and u/s 154 were pending at Ld AO it was against the natural Justice and bad in law as per facts and circumstances of the cause.
The Ld. A.O. erred in issuing notice u/s 226(3) of the Income Tax, 1961 (notice to attach Bank Account) vide notice no. ITBA/RCVW/S/226(3) 1/2019 20. 1024446695(1) dated 3001-2020 when application u/s 119(2) and ws154 since 21-01-2019 and 18-01-2019 respectively and extension of hearing against notice no. ITBA,COMF 17 2019 20/1023718038(1) dated 09/01/2020 were pending at Ld. A.O. It was against the natural justice and bad in law as per facts and circumstances of the case.
The Ld. A.O. erred in recovery of Rs.1,26,60,119/from attached accounts after reminding the pending notice u/s 119(2) and u/s 154 dated 21-01-2019 and 18-01-2019 and the same was not disposed-off by Ld. A.O within prescribed time limit.
The Ld. A.O. erred in rejection of application filed u/s 154 of the Income tax Act, 1961 for AY2013-14 vide letter no. [TBA/COM/F/17/2019- 20/1025087630(1) dated 12-022020 after submitting various ‘applications to remind the Ld. A.O. that application u/s 154 and u/s 119(2) were pending at your end since last one year. It was against the natural justice and bad in law as per facts and circumstances of the case.
The Ld. A.O. erred in providing reason of rejection of application u/s 154 as section 154' of the Income Tax Act, 1961 said: “Rectification of an order can be made only within 4 years from the end of financial year in which the order sought to be amended was passed.” The Intimation u/s 143(1) order was passed on 14-03-2015 and the financial year of the order is 2014-15, as per section 154, the assessee Page 3 of 9 had time limit to file rectification till financial year 2018-19 i.e. 31-03-2019. The assessee had submitted application at Ld. A.Q. on 18-01-2019 which was within time limit. However, the Ld. AO has not disposed-off this application within a period of 6 months from the end of the month in which the application was made. To hide all these issues, the Ld. A.O. has taken coercive action and issued the notice to attach bank accounts, It is bad in law and against the natural justice as per facts and circumstances of the case.
The Ld. A.O. erred in providing reason in point no.2 of rejection order “you have claimed exemption u/still of the Income Tax Act, 1961 and filled ITR-? which relates to Jurisdiction of the exemption unit and not to jurisdiction of this office.” Refer point no. 3 of this Grounds of Appeal
where the assessee mentioned the comments by Ld. CIT(Exemption) in order against application submitted u/s 119(2) filed separately before CIT(Exemption).
10. The Ld. A.O. erred to write reason of rejection in point no.3 in rejection order that “Nothing has been brought on record to prove, that this is a mistake and not conscious activity of the assessee.” The Ld. A.O. erred to not to refer the Audit Report u/s 44AB and Financials of AY 2013-14 submitted by the assessee on 30-09-20 11- The Ld. A.O. erred to write point no.4 in rejection order that “Nu effort has been made by the assessee to even seek stay on the outstanding demand.” The Ld. A.O. erred to not to consider the rectification application u/s 154 dated 18-01-2019 and not to disposed-off the application of rectification made with in time (filled on 18-0t-2019),
12. The Ld. A.O. erred to write point no. 5 in rejection order that “A notice u/s 221 dated 0901-2020 was issued to you for recovery of this tax demand which remained un-complied. The Ld. A.O. erred to not considering the application of extension of time which was Submitted on 16-01-2020 on official mail Id lucknow.dcit2@incometax.gov.in in which the assessee was demand for extension of hearing on 30-01-2020. The Ld. A.O. has not declined the extension of date. The Ld. A.O. erred in rejecting the application u/s 154 without fully appreciating that the assessee had submitting the status of cases on 30-01-2020 as per commitment of the date.
13. Kindly stay the demand
14. The assessee craves leaves to add/alter any of the ground of appeal on or before the date of hearing.”
2. The facts of the case are that the assessee filed a return of income in ITR-7 on 30.09.2013 through the portal along with audited financials. An audit report in form 3CA was filed on 24.10.2013. The assessee claims to have submitted audit report in Form 10B in hard copy on 30.09.2013, but the same Form 10B was submitted online through the portal on 31.08.2016. The Page 4 of 9 assessee did not file the return of income correctly. A sum of Rs.69,02,04,110/- was declared as income from other sources in the said return, when it was actually the gross receipts/gross profit of the UPGEWC as per the financial statement of F.Y. 2012-13. As per these financials, which was duly audited u/s 44AB and u/s 12A(b) of the Act, the entire expenditure made against these receipts were claimed and net profit of Rs.21,47,117.17/- was shown. The assessee held that ITR processing was done on 14.03.2015 by CPC on the basis of facts filed in ITR-7 without referring to the audit report and financials and an intimation was sent u/s 143(1) of the Act with a demand of Rs.26,27,38,580/- against the same. The assessee filed a rectification application on 29.07.2016, which was rejected by CPC. This was followed up by another rectification application on 16.12.2016, which was again rejected by the CPC. On 07.01.2019, the assessee received a notice of demand u/s 221 of the Act. Thereafter, the assessee filed an another application u/s 154 of the Act on 18.01.2019 before ACIT, Range-2, Lucknow- New and also filed an application u/s 119(2)(b) of the Act before the Ld. CIT, Lucknow on 21.01.2019. It also filed an application u/s 119(2) before CIT(E), Lucknow on 08.04.2019 and sought permission to file revised return of income for A.Y. 2013-14, with reference to Circular No.09/2015 dated 09.06.2015. This came to be rejected by Ld. CIT(E) because the original income tax return of the assessee had already been processed by CPC and according to the Ld. CIT(E) there was no provision to revise that return. However, the Ld. CIT(E) held that the appeal could be filed against the processing. The assessee pointed out that even while the application u/s 154 of the Act dated 18.01.2019 was Page 5 of 9 pending; it received a notice u/s 221(1) of the Act on 09.01.2020 and without getting proper opportunity to represent the matter, the Ld. ACIT Range-2, Lucknow passed an order u/s 226(3) of the Act. It is observed from the record that the ACIT-2, Lucknow- New has rejected the application u/s 154 of the Act filed by the assessee, holding the same to be barred by limitation. It is also observed that after the rejection of the said application, the assessee filed an appeal before the Ld. CIT(A) and filed written submission before the Ld. CIT(A). After consideration of these submissions, the Ld. CIT(A) held that the assessee had committed a mistake apparent on record in filing of the ITR-7, but did not file any revised return of income within the stipulated period of time to rectify the same. He held that the Assessing Officer has rightly stated that since the assessee had not filed an appeal against the intimation u/s 143(1) of the Act and two previous application of the assessee u/s 154 of the Act had been rejected, the present rectification application was only a dilatory tactics to stop recovery proceedings and the Assessing Officer had therefore rightly rejected the rectification application of the assessee.
3. The assessee is aggrieved with this rejection of this application and has come before us. On the appointed date of hearing, nobody appeared on behalf of the assessee. The bench was assisted by Shri Manu Chaurasia, Ld. CIT-DR. After consideration of the matter it has been decided to pass the order on the basis of the material available on record. The materials available on record indicate that the assessee filed a return of income in which certain mistakes were committed. Due to the fact of these mistakes, the CPC computed the income of the Page 6 of 9 assessee and raised a demand of Rs.26,96,11,856/-. The assessee filed two rectification applications against the demand raised but both these rectification applications were dismissed. The assessee thereafter, claims that it also filed a rectification application in the office of ACIT Range-2, Lucknow on 18.01.2019. However, there is no mention of this rectification application by the Ld. AO in her order dated 12.02.2020. In the said order, it appears that following the issue of notice u/s 221(1) of the Act, the assessee filed a rectification application before the AO on 28.01.2020. This rectification application came to be dismissed by the Ld. AO on the ground that as per the provisions of section 154 of the Act, a rectification can be carried out within four years of passing of the order that is sought to be rectified under this section. In the assessee’s case, as intimation had been issued u/s 143(1) of the Act on 14.03.2015, the period of four years had lapsed and hence rectification of the order dated 14.03.2015 was now barred by limitation. Furthermore, it was observed that the matter did not relate to the jurisdiction of the Assessing Officer since the assessee had claimed Exemption and therefore it should have been filed before the appropriate officer. Thirdly, it was noticed that the request to change the head of income and the amount of income could not be entertained, as there was no evidence on record to show it was a mistake and not conscious activity. Furthermore, the assessee had not claimed the benefit of section 11 of the Act in subsequent years. Finally, the Ld. AO noted that rectification applications on similar points had been rejected twice by CPC and assessee had neither made any effort to pay the outstanding demand or seeks stay of the same. Therefore, the assessee was directed to deposit the Page 7 of 9 outstanding demand at the earliest. It is also observed that prior to this, the Ld. CIT(E) had rejected the order u/s 119(2)(b) of the Act for condoning of delay in filing revised return. It does not appear that any appeal or other legal ground was taken by the assessee with regard to the same.
The assessee has now come in appeal with regard to grounds as reproduced earlier in the order. At the very outset, we note that the assessee has not challenged any one order but a series of orders issued by different officers of the Income Tax Department. In the same grounds of appeal, it has challenged the decision of the Ld. CIT(E) to not to consider the registration u/s 12A of the Act and to not condone the delay in filing of the revised return of income. The notices issued by the AO u/s 221(1) and 226(3) of the Act have also been challenged as have the recovery made by the AO. Finally the original intimation u/s 143(1) of the Act has also been appealed against in the grounds raised before us. It is, therefore, pertinent to point out that multiples orders cannot be challenged in a single appeal and therefore we decline to admit grounds nos. 1, 2, 3, 4, 5 & 6 which relate to issues other than the rejection of application u/s 154 of the Act. These are accordingly dismissed as irrelevant. With regard to ground nos. 7, we observe that the assessee has claimed to have filed rectification application before the ACIT Range-2, Lucknow-New on 18.01.2019. The fate of that application is not known and the present order u/s 154 of the Act is not passed to address that application. If, the assessee was aggrieved at the failure of the Assessing Officer to dispose that application, then the assessee ought to have preferred an appeal before the appropriate forum on the expiry of the given period for the disposal of that Page 8 of 9 application. The treatment of that application cannot, in our opinion that the subject matter of this appeal. Hence we decline to admit ground no. 7 also and dismiss it an irrelevant. With regard to ground no. 8, as it is clear that the application u/s 154 of the Act dated 28.01.2020 is clearly beyond the prescribed period of limitation, we uphold the decision of the Assessing Officer to reject application and we dismiss this ground of the assessee. In view of the fact that the application u/s 154 of the Act has been filed beyond the period of limitation and the Assessing Officer has declined to entertain it on that ground, it is not necessary to decide on the merits of the arguments presented by the Assessing Officer on other issues in the course of the order u/s 154 of the Act. Accordingly, in view of our decision on ground no. 8, ground nos. 9 to 12 are dismissed as infructuous. Similarly, since the appeal is dismissed, the plea of stay demand is also dismissed; Ground no. 13 is accordingly dismissed. Ground no. 14 is general in nature and does not require to any adjudication.
In the result, the appeal of the assessee is dismissed.
Order pronounced in the open Court on 14/05/2025.