SHEELA DAVIS,THRISSUR vs. THE ITO WARD 1 & TPS, GURUVAYOOR, THRISSUR, THRISSUR
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Income Tax Appellate Tribunal, COCHIN BENCH : COCHIN
Before: SHRI SATBEER SINGH GODARA & SHRI AMARJIT SINGH
PER SATBEER SINGH GODARA, J.M.
This assessee’s appeal, for the assessment year 2017- 2018, arise against the CIT(A)-National Faceless Appeal Centre [in short the “NFAC”], Delhi, Delhi’s DIN & Order no.ITBA/NFAC/ S/250/2023-24/1061383776(1), dated 23.02.2024, in proceedings u/sec.154of the Income Tax Act, 1961 (in short the "Act").
2 ITA.No.312/COCH./2024 Case called twice. None appears at assessee’s behest. She is accordingly proceeded ex-parte.
Coming to the assessee’s sole substantive grievance herein that both the learned lower authorities have erred in law and on facts in refusing her sec.154 rectification, the Revenue invited our attention to the learned CIT(A)’s lower appellate discussion to this effect reading as under :
“5. DECISION:
5.1. I have carefully considered the Order u/s. 154 of the I.T. Act, submission and the statement of facts filed by the appellant. In the case of the appellant, order u/s. 154 of the Income Tax Act dated 13.01.2020 was passed by the ITO, Ward-1 & TPS, Guruvayoor (the AO") for AY 2017-18.
5.2 The appellant has filed four grounds of appeal. Appeal no. 1 to 3 are interconnected and related to the addition of Rs.3,33,650/- made by the AO.
During the appellate proceedings, the appellant contended that the assessee Mrs. Sheela Davis, Proprietrix, Welfare Firm is doing money lending business. She filed Income-tax Return for the Assessment Year 2017-18 on 21/03/2018. The return
3 ITA.No.312/COCH./2024 was selected for scrutiny. The assessee had filed the return u/s.44AD of the Income-tax Act, 1961. During the course of assessment the Assessing Officer observed that an amount of Rs.4,63,000/- remitted bank account with State Bank of India is not shown in the books of account. Subsequently, the assessee showing the necessary evidence in the cash book and the learned Assessing Officer passed a Rectification order on 13.01.2020 deleting the addition. The Assessing Officer observed that the assessee had borrowed Rs.7,20,42,195/- during this year and paid interest to the tune of Rs.66,67,567/-. The learned Assessing Officer further observed that the assessee is keeping fixed deposit with various bank which fetch lesser interest. He made an addition of Rs.3,33,650/- towards the income returned stating that by depositing borrowed funds to earn a lower interest is not prudent business practice.
This appeal is being filed against the addition of Rs.3,33,650/-
5.2.1. I have carefully perused the facts of the case of the appellant. In the case of appellant the AO has passed order u/s.154 of the I.T. Act on 13.01.2020 rectifying the
4 ITA.No.312/COCH./2024 order u/s. 143(3) dated 24.12.2019. In the rectification order, the AO mentioned that :-
The assessment in this case was completed u/s 143(3) of the Income Tax Act, 1961 on 24.12.2019 making an addition of Rs.7,96,650/- which included cash deposit of Rs.4,63,000/- made into bank account on 11.11.2016. The addition of Rs.4,63,000/- was made since this amount is not seen reflected in the cash Book of the assessee.
The assessee filed a rectification letter dated 07.01.2020 stating that the amount of Rs.4,63,000/- was paid from the branch of the business. The consolidated day book shows payment of Rs.9,91,103.78 to the bank on 11.11.2016 which includes cash payment of Rs.4,63,000/- made from the branch. The details filed by the assessee were verified. The contention of the assessee appears to be correct. This being a mistake apparent from records, the order u/s 143(3) dated 24.12.2019 is rectified u/s 154 of the Income Tax Act, 1961 as under :
5 ITA.No.312/COCH./2024 Assessed income us 143(3) dated 24.12.2019 Rs 15,25,337/-
Less: Deletion as discussed in para 2 Rs 4,63,000/-
Revised Total Income : Rs.10,62,337/-
5.2.2. As seen from the rectification order the AO has already deleted the addition of Rs.4,63,000/- after verification of the facts submitted by the assessee during proceedings u/s. 154. However, in this appeal, the appellant filed against the addition of Rs.3,33.650/- which was made by the AO during proceedings u/s. 143(3) dated 24.12.2019. Whereas, the appellant has filed this appeal against order u/s. 154 of the Act dated 13.01.2020. As the addition against which this appeal has been filed relates to order u/s. 143(3), this appeal becomes infructuous and treated as dismissed.”
Suffice to say, it has already come on record that the learned assessing authority had duly accepted the assessee’s sec.154 rectification petition thereby followed by re-computation of her taxable income either. That being the case, we quote TS Balram, ITO vs. Volkart Brothers [1971] 82 ITR 50 (SC) that the assessee’s sole ground in the instant appeal in fact involve
6 ITA.No.312/COCH./2024 detailed investigation/enquiries which is no more permissible u/sec.154 rectification proceedings as the latter provision is meant to deal with the mistakes apparent on record. Ordered accordingly.
This assessee’s appeal is dismissed in above terms.
Order pronounced in the open Court on 22.08.2024.
Sd/- Sd/- [AMARJIT SINGH] [SATBEER SINGH GODARA] ACCOUNTANT MEMBER JUDICIAL MEMBER Cochin, Dated 22nd August, 2024 VBP/- Copy to 1. The appellant 2. The respondent 3. The CIT(A) concerned. 4. The CIT concerned 5. The D.R. ITAT, Cochin Bench, Cochin. 6. Guard File. //By Order// //True copy//
Sr. Private Secretary, ITAT, Cochin Bench, Cochin
