PREM CHAND AGRAWAL,TONK vs. INCOME TAX OFFICER, TONK
Facts
The assessee, a partner in a firm, received interest income. There was a mistake in the initial return where the interest income was punched at Rs. 12,94,100 instead of Rs. 1,29,100. The assessee corrected the return, but the CPC processed it based on the original incorrect return. A rectification application was filed and rejected.
Held
The Tribunal held that the mistake was apparent from the record and the assessee's rectification application should have been adjudicated on merit. The lower authorities erred in not considering the corrected return and rejecting the rectification without proper inquiry.
Key Issues
Whether the assessee was justified in seeking rectification of a mistake apparent from the record, specifically regarding the interest income calculation, and whether the lower authorities correctly rejected the rectification application.
Sections Cited
143(1), 154, 139(4), 265
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES, “SMC” JAIPUR
Before: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 07/JP/2024
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, “SMC” JAIPUR Jh lanhi xkslkbZ] U;kf;d lnL; ,oa Jh jkBkSM deys’k t;arHkkbZ] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 07/JP/2024 fu/kZkj.k o"kZ@Assessment Year : 2011-12 cuke Prem Chand Agrawal, Income Tax Officer, Vs. F-75 Prop. M/s Kailash Industries, Tonk RIICO Industrial Area Newai Tonk
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AHCPA 4339 F vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. Dinesh Kumar, Adv. jktLo dh vksj ls@ Revenue by : Sh. Monisha Choudhary (Addl.CIT) lquokbZ dh rkjh[k@ Date of Hearing : 03/04/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 30/05/2024 vkns'k@ ORDER
PER: RATHOD KAMLESH JAYANTBHAI, A.M. This appeal is filed by the assessee aggrieved from the order of the Addl./Jt Commissioner of Income Tax, Appeal-3, Mumbai [Here in after referred as (CIT(A)] for the assessment year 2011-12 dated 08/11/2023, which in turn arises from the order passed by the AO passed under Section 143(1)/154 of the Income tax Act, 1961 (in short 'the Act') dated 22.04.2014.
2 ITA No. 07/JP/2024 Prem Chand Agrawal vs. ITO 2. The assessee assailed the present appeal on the following
grounds;
“1. Whether in the facts and circumstances of the case, the Learned CIT (Appeals) is justified in confirming the order of Learned Assessing Officer in rejecting the rectification application?
Whether in the facts and circumstances of the case, the Learned CIT (Appeals) is justified in confirming addition of Rs. 11,65,000/- on account of interest from firm in which assessee is partner ignoring that interest received from firm is only Rs. 1,29,100/-and not Rs. 12,94,100/-?
Whether in the facts and circumstances of the case, even if return filed by the Appellant is under the provisions of Section 139(4) of the Act, then also Section 154 of the Act permits rectification of mistake apparent on the face of the record as the amount was wrongly punched as apparent from the statutory audit report ?
Whether when there is a mistake apparent on the face of the intimation under Section 143(1) of the Act, if not permitted to be rectified shall be against the principle of Article 265 of the Constitution of India where no tax can be retained without authority of law?
Whether in the facts and circumstances of the case, the learned CIT(Appeals) is justified in not appreciating that it is a case of filing of corrected return rather a case of revised return?
That the appellant craves leave to add, amend or alter all or any of grounds of appeal and relief claimed before or at the time of hearing.”
The fact as culled out from the records is that the assessee
is a Partner of M/s. Mahaveer Oil Industries, Niwai District Tonk.
Assessee received interest of Rs. 1,29,100/- and remuneration of
Rs. 84,000/- totaling to Rs. 2,13,100/- from the Partnership Firm
3 ITA No. 07/JP/2024 Prem Chand Agrawal vs. ITO M/s. Mahaveer Oil Industries. Income Tax Return of Partnership
firm along with audited accounts were submitted. Assessee e-filed
its return for the Assessment Year 2011-12 declaring total income
of Rs. 14,09,550/- on 10/02/2012 having acknowledgement No.
339020280100212. In the return of income filed by mistake in
punching, interest income was punched as Rs. 12,94,100/- in
place of Rs.1,29,100/- Thus, income was computed at 14,09,550/-
as shown in return. The signed hard copy of the acknowledgement
was not sent and immediately on having knowledge of the mistake
on 7/3/2012 corrected his return and declared his correct total
income at Rs. 2,44,550/- having acknowledgement No.
348435310070312. Hard Copy of both the returns original &
corrected were sent to CPC simultaneously in the same envelop.
Copy of both the returns are submitted and placed on record. The
Centralized Processing Center, Income Tax Department passed its
Order on 11/06/2012 under Section 143(1) on the basis of original
return filed on 10/02/2012 without considering the fact that the
Original Return has already been corrected on 7/3/2012. Assessee
then filed rectification application before CPC, Income Tax
Department who vide its communication dated 15/11/2012
4 ITA No. 07/JP/2024 Prem Chand Agrawal vs. ITO informed that the case has been transferred to the Jurisdictional
Assessing Officer and further proceedings shall be taken by the
Jurisdictional Assessing Officer. Assessee then filed an application
dated 24.10.2013 before Income Tax Officer, Tonk under Section
154 of the Act for rectification of mistake in order dated 11.6.2012.
Income Tax Officer, Tonk rejected the rectification application vide
its order dated 22/4/2014.
Aggrieved from the said action of the Assessing Officer,
assessee preferred an appeal before the ld. CIT(A)/NFAC. Apropos
to the grounds so raised the relevant finding of the ld. CIT(A)/NFAC
is reiterated here in below:-
“Decision “Assessee submission has been considered carefully. In this case for AY 2011-12 due date for filing return u/s 139(1) was 31 July 2011, whereas assessee has filed return on 10.02.2012 of Rs. 1409550/-. Furthermore, assessee has also sent ITR V of return filed on 10.02.2012 to CPC for verification, which CPC has correctly processed as held clearly by the Hon'ble Supreme Court of India in the case of Goetze (India) Ltd. V. Commissioner of Income Tax that assessee cannot amend return filed by him for claiming deduction or other than by filing a revised return.
In this case Assessee has not filed any revised return for the relief, he is claiming. Accordingly, assessess's case has been dismissed and no relief can be given. It is not a mistake apparent from record.”
5 ITA No. 07/JP/2024 Prem Chand Agrawal vs. ITO 5. As the assessee did not find any favor from the order of the
ld. CIT(A), the assessee preferred the present appeal on the
ground as reproduced hereinabove. To support the contention so
raised in the written submission reliance was placed on the
following evidence / records / decisions:
S. No. Particulars Page No. 1 Copy of ITR-V (Original) Dt 10.2.2012 1-2 Along with computation of income 2 Copy of ITR-V (Revised) Dt 7.3.2012 3 3 Copy of Intimation u/s 143 4-6 4 Copy of Application Dt. 24.10.2013 along with audit 7-22 report 5 Copy of written submissions before CIT (Appeals) 23-30 along with e-proceedings acknowledgment
Decisions: • ITO, Mumbai vs. Vikunj Enterprises Private, Mumbai in ITA No. 1789/Mum/2018 dated 30/04/2019 • Goetze (India) Ltd. vs. CIT (2006) 204CTR (SC) 182 • M/s Craftsman Automation P. Ltd. vs. CIT on 30 September, 2015 in Tax Case Appeal No. 1177 of 2005 • Chandrashekhar Bahirwani, Mumbai vs. ACIT in ITA No. 7810/Mum/2010 & 6599/Mum/2012 dated 17.06.2015 • Yogita Dhiren Goradia, Mumbai vs. CIT(A), NFAC, Delhi on 31 January, 2023
6 ITA No. 07/JP/2024 Prem Chand Agrawal vs. ITO • Madhabi Nag, Bankura vs. ACIT in ITA No. 512/Kol/2015 dated 09.12.2015 • Shrikant Real Estates (P) Ltd. vs. ITO in ITA No. 4304/Mum/2012 dated 19th October, 2012 • Sumanchandra G. Mehta vs. ITO in ITA Nos. 564/Mum/2012 & 565/Mum/2012 dated 24th Jan, 2013
The ld. AR of the assessee in addition to the above written
submission, the ld. AR appearing on behalf of the assessee
submitted that the tax should be charged correctly in the hands of
the assessee. The ld. JAO has not made any inquiry as to the
factual error available on record and therefore, the assessee should
be charged on the correct income and accordingly, the tax is
required to be levied. To support his contention he has relied upon
the various case laws as cited here in above.
The ld DR representing the revenue submitted that the correct
action should be followed by the assessee by filing the revised
return which the assessee has not filed. The case laws cited all are
related to the fact that the assessee filed the revised return and in
this case the assessee has already filed the return after the due
date there are not provisions to revise that return. Thus, there is no
merit in the arguments of the ld. AR of the assessee. Based on
7 ITA No. 07/JP/2024 Prem Chand Agrawal vs. ITO these arguments the ld. DR relied upon the finding recorded in the
orders of the lower authority.
We have heard the rival contentions and perused the material
placed on record. The apple of discord in this case is that whether
the assessee has received interest from the partnership firm at
Rs.1,29,100/- or Rs. 12,94,100/-. This appears to be mistake
apparent from the record and therefore, the application filed by the
assessee u/s 154 of the Act is required to be adjudicated on merit
and therefore, considering that aspect of the matter, we set aside
the matter with a direction to the ld. AO to make necessary inquiry
and obtained evidence from the assessee and considered the plea
of the assessee on merits and charged the tax in accordance with
law based on the correct income. We get strength to support of our
wherein on the similar circumstances the co ordinate bench of
Mumbai has considered the plea of the assessee. Out of the
judgment so relied upon by the ld. AR of the assessee we find that
on the similar circumstances as that of the assessee was in the
case of Shri Sumanchandra G. Mehta Vs. ITO in ITA no.
564/Mum/2012 wherein the co-ordinate bench observed that;
8 ITA No. 07/JP/2024 Prem Chand Agrawal vs. ITO “7. The present case is a perfect example of such ignorance. The assessee has shown interest income earned as well as interest paid under the head" income from other sources". Not realizing that a negative figure is not accepted by the server and therefore the interest paid shown as Rs. 2,33,535/- was rejected by the server while processing the return.
No doubt the CBDT has the powers to frame the rules but, at the same time, it cannot benefit from the ignorance of the taxpayers using the latest technology. We do not find any reason why such error should not be rectified by the AO. This is not Ignorance of law but ignorance of the usage of the latest technology.
Therefore in the interest of justice and fair play to the taxpayer, we restore this issue back to the files of AO. The AO is directed to examine the claim of the assessee of interest paid at Rs. 2,33,535/- and if satisfied with the claim, the AO is directed to deduct the same from the positive interest figure of Rs. 3,38,345/- meaning thereby that only Rs. 1,04,810/-should be added to the taxable income.
Before parting, a similar issue came up for hearing before the Tribunal in the case of Srikant Real Estate Pvt. Ltd. 140 ITD 155 wherein one of us (AM) is the author of the decision where also the Tribunal has taken a similar view and directed the AO to rectify the error. Drawing support from the findings given in the aforesaid case, this appeal is also restored back to the files of the AO with the above direction.
In the result, the appeal filed by the assessee is allowed for statistical purposes.”
Respectfully following the findings as referred above we direct the
ld. AO to decide the application of the assessee filed u/s. 154 of the
Act after making necessary relief and decide the issue of charging
the correct income in the hands of the assessee. In terms of these
9 ITA No. 07/JP/2024 Prem Chand Agrawal vs. ITO observations, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 30/05/2024.
Sd/- Sd/- ¼ jkBkSM deys’k t;arHkkbZ ½ ¼ lanhi xkslkbZ ½ (Sandeep Gosain) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 30/05/2024 *Ganesh Kumar, Sr. PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Prem Chand Agrawal, Tonk 2. izR;FkhZ@ The Respondent- ITO, Tonk 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File {ITA Nos. 07/JP/2024} vkns'kkuqlkj@ By order, सहायक पंजीकार@Aेेज. त्महपेजतंत
