M/S. BARNALA STEELS INDUSTRIES LIMITED,NEW DELHI vs. DCIT, MUZAFFARNAGAR

Brief facts of the case are that the assessee is a company deriving income from the business of manufacturing of M.S. Bars and TMT Steel. Assessment of income u/s 143(3) of the Act for the AY 2009-10 was complete by order dated 29.12.2011 computing the income at Rs. 1,44,52,756/-. However, stating that no documentary evidences regarding payment of TDS on certain payments under the head “Advertisement publicity and 1

Aggrieved by the orders of the authorities below and more particularly challenging the impugned order, the assessee carried the matter in this appeal stating that there was no mistake apparent on the face of record in the order u/s 143(3) of the Act that could have been rectified u/s 154 of the Act, as such the assumption of jurisdiction by the AO u/s 154 of the Act to make additions on the ground that no documents supporting the payment of TDS on certain payments were enclosed.

It is the argument of the Ld. AR that in this matter the assessment was u/s 143(3) of the Act and all the record was available before the AO when he passed such an order u/s 143(3) of the Act, the question whether the TDS was liable or not on the payments enumerated by the AO in the order u/s 154 of the Act is a debatable one and not available to the AO for Section 154 of the Act for making any additions. Per contra, Ld. DR vehemently relied on the orders of the authorities below stating that the orders are well reasoned ones.

We have carefully gone through the record. Relevant portion of the order u/s 154 is as follows:

No doubt the liability to deduct and pay TDS on these payments is a debatable one and has to be decided after affording an opportunity to the assessee, and hence, it cannot be said that it is a mistake apparent on the face of record. Section 154 of the Act clearly reads that with a view to rectifying any mistake apparent from record, any Income Tax Authority may amend any order passed by it. Since, we are of the firm opinion that the question involved in this matter sought to be rectified u/s 154 of the Act is not a mistake apparent from the record, but a debatable issue, we hold that it is not available to the AO to make additions u/s 194C of the Act under the guise of rectification of mistake apparent from record. With this view of the matter, we find that the orders of the authorities below cannot be sustained and accordingly quash the same. Additions made under the order dated 03.03.2014 u/s 154 of the Act are directed to be deleted.

In the result, the appeal of the assessee is allowed.