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Facts
The assessee challenged the CIT(A)'s order, which rejected their plea to change the opening and closing stock values for AY 2013-14. This was necessitated by the Assessing Officer's modification of the closing stock value for AY 2012-13, a dispute later settled under the Vivad Se Vishwas Act, 2020. The assessee's subsequent rectification petition under Section 154 for AY 2013-14 was rejected by the AO and upheld by the CIT(A), who found it outside the purview of Section 154.
Held
The Tribunal held that the assessee's claim to revise stock values constituted a new claim requiring verification of accounts, which does not qualify as a 'mistake apparent on the face of record' rectifiable under Section 154. The intimation under Section 143(1) for AY 2013-14 was consistent with the return filed, and such a claim falls outside the scope of Section 154. Thus, the Tribunal upheld the CIT(A)'s decision, while giving liberty to the assessee to pursue other appropriate legal actions.
Key Issues
Whether a change in opening and closing stock values for an assessment year, necessitated by a prior assessment year's settled dispute, can be rectified through a petition under Section 154 of the Income Tax Act.
Sections Cited
Section 143(1), Section 154
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Mumbai “G” Bench, Mumbai.
IN THE INCOME TAX APPELLATE TRIBUNAL Mumbai “G” Bench, Mumbai. Before Shri B.R. Baskaran (AM) & Shri Anikesh Banerjee (JM) (A.Y. 2013-14) ITO, Ward 3(2) Sumermal Pukhraj Shanklesha Vs. 1, Station Road, Narayanwadi, Kalyan. Kalyan 421301. PAN : AONPS9463C (Appellant) (Respondent) Assessee by Shri Ajay R. Singh & Shri Akshay Pawar Shri Dinesh A. Chourasia Department by 28.05.2024 Date of Hearing Date of Pronouncement 28.05.2024 O R D E R Per B.R. Baskaran (AM) :-
The assessee has filed this appeal challenging the order dated 07-11- 2023 passed by Ld CIT(A), NFAC, Delhi and it relates to the assessment year 2013-14. The assessee is aggrieved by the decision of Ld CIT(A) in not accepting the plea for changing the value of opening stock & closing stock pursuant to the assessment order passed in AY 2012-13.
The ld A.R submitted that the assessing officer had changed the value of Closing stock as on 31.3.2012 in the assessment order passed for AY 2012- 13. Even though the assessee had contested the addition made in the assessment year 2012-13 on account of change in the value of closing stock, it later settled the dispute under Vivad Se Vishwas Act, 2020. Consequent thereto, the opening stock as on 1.4.2012 is required to be changed which will have impact on the income declared in AY 2013-14. However, the assessee had already filed the return of income for assessment year 2013-14 adopting the original values determined by the assessee. The return of income so filed was processed u/s 143(1) of the Act accepting the income returned by the assessee. Since the value of opening stock requires to be changed Sumermal Pukhraj Shanklesha consequent to the assessment order passed for AY 2012-13, the assessee moved a rectification petition u/s 154 of the Act for assessment year 2013- 14. The assessing officer rejected the same on the reasoning that the claim of the assessee requires verification of books of accounts and further, it is a long drawn process. The Ld CIT(A) also upheld the view taken by the assessing officer observing the request of the assessee does not fall within the purview of sec.154 of the Act.
The Ld A.R submitted that there cannot be any dispute that the value of closing stock determined as on 31.3.2012 (relevant for AY 2012-13) shall become opening stock as on 1.4.1992 (relevant for AY 2013-14). Consequent thereto, the value of closing stock as on 31.3.2013 also needs to be corrected. Since the assessing officer has modified the value of closing stock as on 31.3.2012, consequential effect needs to be given for the value of stock as on 1.4.2012 and 31.3.2013. Hence the assessee has moved rectification petition u/s 154 of the Act. He submitted that the claim of the assessee is a justified one and accordingly prayed that the assessing officer may be directed to rectify the intimation issued u/s 143(1) of the Act.
The ld D.R, on the contrary, submitted that there is no mistake apparent from record in the intimation issued u/s 143(1) of the Act against the return of income filed by the assessee. Hence the rectification petition filed by the assessee was rightly rejected.
We heard the parties and perused the record. We are concerned with the intimation issued u/s 143(1) against the return of income filed by the assessee for AY 2013-14. It is an admitted fact that there is no mistake apparent from record in the intimation issued u/s 143(1) of the Act, as the same is in accordance with the return of income filed by the assessee. We notice that the assessee is putting up a new claim for revising the values of opening stock and closing stock through the rectification petition filed u/s 154 of the Act. Under section 154 of the Act, only those mistakes which are apparent on the face of record can be rectified. In our view, the new claim of the assessee cannot fall under the category of mistakes apparent on the face
Sumermal Pukhraj Shanklesha of record. Accordingly, we are of the view that the Ld CIT(A) was justified in rejecting the claim of the assessee. 6. However, the assessee is at liberty to move appropriate petition before the tax authorities for getting its grievance redressed or take any other appropriate legal action. 7. In the result, the appeal of the assessee is dismissed.
Order pronounced in the open court on 28th May, 2024.