INCOME TAX OFFICER, JAIPUR vs. VINOD KUMAR JHARCHUR HUF, JAIPUR

We have considered the rival contentions, perused the material available on record and also gone through the findings of the lower authorities recorded in their respective proposal of the ld. AO to rectify the order passed u/s. 143(3) of the Act. At the same time ld. DR did not controvert the arguments of the ld. AR of the assessee that the whether the action of the ld. AO is falling within the provision of section 154 of the Act or not?. The ld. DR merely stated that as there was an audit objection the ld. AO rectified the point of error pointed out by the revenue audit team. There are no arguments of the ld. DR on merits of the case so as to controvert the findings of the ld. CIT(A).Since, the appeal of the assessee was allowed by the ld. CIT(A) on both technical as well as consideration of the merits of the case and the revenue has challenged this appeal only on the opportunity ground (technical ground) and did not challenge the ground on the fact that considering the fact of the case that the mistake is apparent on record or not. Whereas on the other hand looking to the petition of the ld. AR of the assessee under rule 27 raising the legal ground at this stage which is based on the ratio decided in favour of the assessee considering the facts of the case on hand respectfully following the ratio of decision relied upon by the assessee we consider it to allow the additional ground on merits raised by the ld. AR of the assessee as the related ground was also raised before the ld. CIT(A). We have gone through the submission of the assessee and orders of the lower authorities it is not disputed that the assessee has earned the capital gain and the claimed the deduction under section 54 of the Act. As the ld. AR of the assessee has already submitted all the details related to the claim made by the assessee against the capital gain expressly showing that all the details were submitted and after examination of all the records the ld. enquiry. The dispute is only about the amount of the claim allowable to the assessee which has already reached to finality once the order of the assessment is passed under section 143(3) of the Act. The ld. DR did not controvert the arguments of the ld. AR of the assessee that considering the present set of fact the ld. AO did not bring anything in the notice issued to him so as to demonstrate that in fact there is a mistake apparent on record. The claim of the assessee is already considered which is based on the submission on merits in the scrutiny assessment and order has been passed which is based on the evidences and submission made by the assessee. Merely there is an observation of the revenue audit party it is not a mistake apparent on record. The ld. AO is in error of reviewing his own order under section 154 of the Act. Considering the facts placed on record the bench noted that the issue noted by the ld. AO is not a mistake apparent on record and is not subjected to revision under the guise of provision of section 154 of the Act and therefore, order passed under section 154 of the Act lacks jurisdiction as ld. AO did not demonstrate as to what is the mistake apparent on record and the debatable or change of opinion is not subject matter of the provision of section 154 of the Act, as the law allows the mistake apparent on record be rectified which is expressly not demonstrated before us and see that there exist no mistake which is apparent on record.

In view of the above, we do not find any infirmity in the order of the ld. CIT(A)/NFAC and accordingly decline to interfere. Hence the ground of the appeal of the revenue is dismissed.

In the result, the ground raised by the assessee in the application filed under rule 27 of ITAT Rules, 1963 is allowed and the appeal filed by the revenue is dismissed.