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Facts
The assessee's income for AY 2014-15 was assessed by the AO under Sections 147/144/144B, which was subsequently rectified by an order under Section 154 to correct a perceived mistake in tax calculation. The assessee challenged the Section 154 order before the CIT(A), who upheld it, leading to the present appeal before the ITAT. Crucially, in a separate appeal against the original assessment, the CIT(A) later set aside that assessment and directed a fresh assessment.
Held
The Tribunal noted that since the underlying original assessment order, which the Section 154 rectification order pertained to, had already been set aside by the CIT(A), the rectification order itself became infructuous. Consequently, the present appeal challenging the rectification order was rendered without substance. Therefore, the Tribunal dismissed the assessee's appeal as infructuous.
Key Issues
Whether the rectification order under Section 154 is valid when the underlying assessment order, which it sought to rectify, has been set aside and a fresh assessment directed. The procedural validity of the rectification proceedings was also contested.
Sections Cited
Section 250, Section 154, Section 156, Section 151A, Section 144B, Section 147, Section 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, B BENCH,
Before: Dr. MANISH BORAD & MS. ASTHA CHANDRA
Assessee by : Shri Kalpesh Turalkar (Virtual) Revenue by : Shri Aviyogi Ambadkar, Addl.CIT Date of hearing : 13.01.2026 Date of pronouncement : 14.01.2026 आदेश/ORDER
PER DR.MANISH BORAD, ACCOUNTANT MEMBER :
This appeal at the instance of the assessee is directed against the order of Ld. ADDL/JCIT(A)-2, Chennai dated 28.07.2025 framed u/s 250 of the Income Tax Act, 1961 for A.Y. 2014-15 which is arising out of order passed u/s 154 of the Act dated 20.12.2024.
Assessee has raised following grounds of appeal:-
1. The Learned The ADDL/JCIT(A) -2, Chennai, (hereinafter referred to as the "Ld. CIT(A)"] has erred in law and on facts in passing the order dated 28.07.2025 (hereinafter referred to as the 'Impugned order"), without considering legal provisions of the Act and uphold order dated 20.12.2024 and Notice of Demand dated 20.12.2024 issued under section 156 of the Act. The said Impugned order is bad in law and liable to be set aside.
2. Appellate Order passed without providing an appropriate opportunity of being heard and is, hence bad in law The Ld. CIT(A) erred in passing the impugned order without providing the Appellant an appropriate opportunity of being heard. Hence, the impugned order passed by the Ld. CIT(A) is in gross violation of principles of natural justice and the same may be quashed.
The learned CIT (A) erred in upholding proceedings under section 154 of the Act in respect of rectifying the Notice of Demand issued under section 156 of the Act, the Appellant submits that the learned A.O. has initiated the said proceeding without jurisdiction. Hence the impugned order is bad in law and liable to be set aside.
4. The learned CIT (A) erred in upholding order dated 20.12.2024 and Notice of Demand dated 20.12.2024 without considering the legal provisions of section 151A of the Act. The Appellant submits that as per Notification S.O. 1466(E) dated March 29, 2022 issued under section 151A of the Act, impugned rectification proceeding could only have been issued in a Faceless manner by a Faceless Assessing officer in accordance with section 144B of the Act. In the present case the rectification proceeding initiated by the Respondent is not the appropriate authority to initial rectification proceeding. Hence, the the impugned rectification proceedings are invalid and bad in law.
5. The Appellant craves leave to add, alter, amend, modify and/or delete any of the Grounds of Appeal.
3. At the outset Ld. Counsel for the assessee submitted that in the appeal before Ld. CIT(A) filed against the addition made by the Ld. Assessing Officer (AO) in the assessment u/s 147 r.w.s 144 r.w.s 144B of the Act dated 22.02.2022, the assessee has been granted relief by Ld. CIT(A) vide order dated 31.12.2025 directing the AO to carry out afresh assessment proceedings. He therefore submitted that the instant appeal which is arising out of order u/s 154 r.w.s 147 of the Act dated 20.12.2024 deserves to be dismissed as infructuous.
On the other hand Ld. Departmental Representative (DR) raised no objection.
We have heard rival contentions and perused the record placed before us. The assessee has been subjected to assessment proceedings for A.Y. 2014-15 and vide order u/s 147 r.w.s 144 r.w.s 144B dated 22.02.2022 Ld. AO assessed the income at Rs. 1,03,38,500/- against the ‘NIL’ income declared by the assessee. However Tax was computed treating the income at Rs. ‘NIL’. Ld. AO on noticing this apparent mistake passed the order u/s 154 revising the tax calculation. Aggrieved with the order u/s 154 assessee preferred appeal before Ld. CIT(A) but failed to succeed. Before us Ld. Counsel for the assessee has submitted that against the addition made in the assessment order, the assessee preferred appeal before Ld. CIT(A) and recently vide order dated 31.12.2025, Ld. CIT(A) has set aside the assessment order and directed the Ld. AO to make afresh assessment after duly considering the details filed by the assessee.
Under the present consideration since the assessment order has been set aside, the order u/s 154 of the act becomes infructuous. Since the present appeal is arising out of said rectification order u/s 154 of the Act we dismiss the instant appeal treating it as infructuous.
In the result appeal of the assessee is dismissed as infructuous.
Order pronounced on this 14th day of January, 2026.