Loading judgment…
Facts
The assessee's rectification application under Section 154 of the Income Tax Act was dismissed by the CIT(A) who confirmed the addition of Rs. 6,75,000/-. The assessee claimed that the actual cash deposit was Rs. 2,25,000/-, and this discrepancy constituted a mistake apparent from the record.
Held
The Tribunal noted that the CIT(A) had dismissed the rectification application, holding that the mistake was not apparent from the record as per Section 154 of the Act and relying on Supreme Court decisions. However, the Tribunal restored the matter to the AO.
Key Issues
Whether the difference between the addition made by the AO (Rs. 6,75,000/-) and the actual bank deposit (Rs. 2,25,000/-) constitutes a "mistake apparent from record" rectifiable under Section 154 of the Income Tax Act.
Sections Cited
154, 148, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,’’SMC” JAIPUR
fu/kZkj.ko"kZ@AssessmentYear : 2011-12 cuke Shri Nanu Ram Choyal ITO G-57, Harshpath, Shyamnagar Vs. Ward-Behror Jaipur 302 019 Alwar LFkk;hys[kk la-@thvkbZvkjla-@PAN/GIR No.: AAHPC 3509 K vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby : Shri P.C. Parwal, CA jktLo dh vksjls@Revenue by: Shri Gautam Singh Choudhary, JCIT-DR lquokbZ dh rkjh[k@Date of Hearing : 21/08/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: : 28 /08/2025 vkns'k@ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM
This appeal filed by the assessee is directed against the order of ld. Commissioner of Income Tax, dated 13-06-2025, National Faceless Appeal Centre, Delhi [ hereinafter referred to as ld. CIT(A) ] for the assessment year 2011-12 wherein the assessee has raised the following grounds of appeal. ‘’The ld.CIT(A) has erred on facts and in law in dismissing application filed by the assessee u/s 154 of the Act for rectification of the appellate order where the ld.
SHRI NANU RAM CHOYAL VS ITO,WARD-BEHROR, ALWAR CIT(A) confirmed the addition of Rs.6,75,000/- on account of unexplained cash deposit in the bank account whereas the cash deposit in the bank account is only Rs.2,25,000/- by holding that the mistake claimed by the appellant is not entertainable u/s 154 of the Act.’’ 2.1 Apropos to solitary ground of appeal of the assessee, it is noticed that the ld. CIT(A) has dismissed the rectification application u/s 154 of the Act filed by the assessee, by observing as under:- ‘’6. Decision: Under the provisions of section 154 of the Act, the term "mistake apparent from record refers to an error that is evident on the face of the record without the need for extensive investigation or examination of facts and evidence. Accordingly, under the provisions of section 154 of the Act, following errors can be considered as 'mistake apparent from record a) An error of fact b) An arithmetic mistake c) A small clerical error d) An error due to overlooking compulsory provisions of law. During the rectification proceedings, the appellant could not explain the mistakes required to be rectified uls 154 of the Act for which the instant application has been filed. On perusal of the case of the appellant, it is clearly seen that the facts of the case does not fall under the purview of section 154 of the Act. In regards to the applicability of the provisions of section 154 of the Act, Hon'ble Supreme Court in T. S. Balaram, ITO v. Volkart Brothers reported in [1971]
82. ITR 50 held that the power of rectification of mistakes u/s 154 of the Act is a very limited power which is restricted to rectification of mistakes apparent from the record. Besides, it must be a mistake which is patent on the face of the record and does not call for detailed investigation of the facts or require an elaborate argument to establish it. It does not cover any mistake which may be discovered by a complicated process of investigation, argument or proof. The mistake sought to be rectified must be manifest and self-evident on the face of the record. The legal position is thus now settled that a mistake which is not obvious, patent and self- evident and mistake on which conceivably there can be two opinions cannot be rectified by way of rectification of mistake u/s154 of the Act. In other words, in the garb of exercise of the power of rectification u/s 154 of the Act, the income-tax SHRI NANU RAM CHOYAL VS ITO,WARD-BEHROR, ALWAR authorities cannot revise or review their order generally or reconsider the conclusions arrived therein on the facts before them at that time on the basis of new facts brought on record by the party seeking rectification or coming into possession otherwise, because the jurisdiction u/s 154 is confined to rectification of mistakes apparent from the record, 7. In view of the facts and discussions made above, I find that there is no error in the appellate order and therefore, the mistake claimed by the appellant is not entertainable u/s 154 of the Act. Thus, the application made by the appellant u/s 154 of the Act for rectification of the appellate order is dismissed.’’ 2.2 During the course of hearing, the ld. AR of the assessee submitted that section 154 of the Act authorizes an income tax authority to rectify any mistake apparent from the record. The AO, in the assessment order, has stated that in the bank account of the assessee cash deposit of Rs.6,75,000/- is made but he has not given the details of such bank account. The ld. CIT(A) has also confirmed the addition without having the bank account with him. The assessee therefore obtained the bank account from the bank on 15.04.2024 and thereafter filed application u/s 154 on 29.01.2025 stating that in the bank account the cash deposit is only Rs.2.25,000/-.Based on that the addition of Rs.6,75,000/- made by AO and confirmed by ld. CIT(A) was a mistake apparent on record. Since the order of AO merged with that of ld. CIT(A), assessee has filed the rectification application before the ld. CIT(A) which he ought to have considered and rectified the mistake. Infact, the decision of Hon'ble Supreme Court in case of Volkart Brothers is in favour of assessee as the mistake sought to be SHRI NANU RAM CHOYAL VS ITO,WARD-BEHROR, ALWAR rectified is manifest and self-evident on the face of the record. Hence the AO be directed to restrict the addition to Rs 2,25,000/-against Rs.6,75,000/- made by him. It is also pertinent to mention that the assessee had submitted an application dated 08-04-2025 enclosing therewith the copy of bank statement wherein the amount of Rs.2.25 lacs was deposited in the bank account of the assessee vide A/c No. 14412191011094 in Punjab National Bank. The relevant narration of the letter of the assessee addressed to the ld. CIT(A)/ NFAC, Delhi is reproduced as under:-
‘’Sub: Written submission for rectification of appeal order no.ITBA/NFAC/250/2023-24/1052239746(1) on20-04-2023 in case ofShri Nanu Ram Choyal, Jaipur PAN No.AAHPC 3509K, A.Y. 2011-12 Ref: Notice dated 07-04-2025 Hon’ble Sir, ‘’Ld. AO passed order making addition of Rs. 6,75,000/- on the ground of cash deposit in bank. This addition was made on the basis of Annual Information Statement received by AO. In fact only 2,25,000/- is deposited in cash in bank account no. 14412191011094 of Oriental Bank of Commerce (Now Punjab national bank). Copy of bank statement enclosed. This is apparent on record that above transaction of Rs. 2,25,000/- reflected three times in the annual information statement.
This fact can be verified from AO's record.
2.3 On the other hand, the ld.DR supported the order of the ld. CIT(A), but at the same time, he did not oppose the prayer of the assessee. 2.4 We have heard both the parties and perused the materials available on record. Brief facts of the case are that the AO on the basis of information that the assessee had made cash deposit of Rs.6.75 lacs in the bank account, issued notice u/s 148 of the Act. However, the notices were not complied with by the assessee. Thus, the AO assessed the income by making addition of Rs.6.75 lacs vide order dated 17-11-2018 which in first appeal by the ld.CIT(A)vide his order dated 20-4-2023 has been confirmed as the assessee did not file any written submission in support of the ground of appeal. The observation of ld.CIT(A) at para 8.7 is reproduced as under:-
‘’8.7 Therefore, action of the AO to consider Rs.6,75,000/- as undisclosed income is upheld as the appellant failed to discharge the onus cast upon him to explain its nature and source. Accordingly Ground No. 2 is dismissed.
Further, the assessee filed an application u/s 154 of the Act before the ld. CIT(A)/ NFAC for rectification of mistake but the same has also been SHRI NANU RAM CHOYAL VS ITO,WARD-BEHROR, ALWAR dismissed. Now from the available records, it is noticed that the assessee had deposited Rs.2.25 lacs in the bank account at Punjab National Bank instead of Rs.6,75,000/-. Hence, in the interest of and justice, the matter is restored to the file of the AO to decide it afresh by providing adequate opportunity of being heard to the assessee and also taking into consideration the submissions as well as the bank details wherein the amount is mentioned as Rs.2.25 lacs. Considering that aspect of the matter, we direct the ld. AO verify the contention of the assessee and correctly assess the income in the hands of the assessee in accordance with law. The assessee is directed to produce all the relevant record before the AO for adjudication of the issue in question.
2.6 Before parting, we may make it clear that our decision to restore the matter back to the file of the AO shall in no way be construed as having any reflection or expression of opinion on the merits, which shall be adjudicated by AO independently in accordance with law.
SHRI NANU RAM CHOYAL VS ITO,WARD-BEHROR, ALWAR 3.0 In the result, the appeal of the assessee is disposedof, for statistical purposes. Order pronounced in the open Court on 28 /08 /2025.