LADE MADWESH,KADAPA vs. INCOME TAX OFFICER, WARD-(2), KADAPA

The grounds raised by the assessee reads as under :

The assessee also raised the following additional grounds before us:

Learned AR submitted that additional grounds so filed are admissible in view of judgment rendered by the Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT (1998) 229 ITR 383 (SC). The prayer for admission of additional grounds noted above, which are not in memorandum of appeal, are being admitted for adjudication in terms of Rule 11 of the Income Tax (Appellate Tribunal) Rules, 1963 owing to the fact that objections raised in additional grounds are legal in nature for which relevant facts are stated to be emanating from the existing records.

Facts of the case, in brief, are that the assessee filed its return of income for the AY. 2017-18 on 05/02/2018, declaring total income of Rs.6,79,760/-. The Centralized Processing Centre, Bengaluru (‘CPC’) issued intimation u/s. 143(1) of the Income Tax Act, 1961 (for short “the Act”) on 19/03/2019 making an addition of Rs.1,04,12,500 on account of long-term capital gain. The assessee filed rectification against the addition before CPC, but did not succeed in getting any relief from the CPC.

Aggrieved, assessee preferred appeal before the Ld.CIT(A). Ld.CIT(A) with the following observation in para no.7 & 8 of his order, sustained the addition made by CPC and dismissed the appeal of the assessee.

Feeling aggrieved with the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal. Consolidating all their grounds, the learned Counsel for the assessee submitted that the Ld.CIT(A)/CPC erred in not rectifying the mistake which is covered u/s 154 of the Act. The learned AR further submitted that the deductions/exemptions otherwise allowable to the assessee under relevant provisions of the Act should not had been denied by the revenue authorities on simple technical mistakes on the part of the assessee.

The learned DR, on the other hand, heavily relied on the order of the learned revenue authorities.

We have heard the rival arguments made by both the sides and perused the orders of the learned revenue authorities. The main issue before us to decide whether the intimation issued by the CPC is subject to rectification u/s 154 of the Act or not. To decide the issue, it is relevant to reproduce Section 154(1) of the Act, which is to the following effect: “Rectification of mistake. 154. (1) With a view to rectifying any mistake apparent from the record an income-tax authority referred to in section 116 may,— (a) amend any order passed by it under the provisions of this Act ; (b) amend any intimation or deemed intimation under sub-section (1) of section 143; (c) amend any intimation under sub-section (1) of section 200A; (d) amend any intimation under sub-section (1) of section 206CB.”

From perusal of above it is absolutely clear that any mistake which is apparent from record can only be rectified u/s 154 of the Act. Further Hon'ble Supreme Court in the case of T. S. Balaram, Income Tax vs M/S. Volkart Brothers, Bombay on 5 August, 1971, (1971) AIR 2204, has held that to rectify a mistake, the mistake must be an obvious and patent mistake and not ,something which can be established by a long-drawn process of reasoning on points on which there may conceivably be two opinions. The relevant portion of the decision of the Hon'ble Supreme Court read as under:

“It was not open to the Income-tax Officer to go into the true scope of the relevant provisions of the Act in a proceeding under S. 154 of the Income-tax Act, 1961. A mistake apparent on the record must be an obvious and patent mistake and not ,something which can be established by a long-drawn process of reasoning on points on which there may conceivably be two opinions. As seen earlier, the High Court of Bombay opined that the original assessments were in accordance with law though in our opinion the High Court was not justified in going into that question. In Satyanarayan Laxminarayan Hegde and ors. v. Millikarjun Bhavanappa Tirumale(1) this Court while Spelling out the scope of the power of a High Court under Art. 226 of the Constitution ruled that an error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opinions cannot be said to be an error apparent on the face of the record. A decision on a debatable point of law is not a mistake apparent from the record-see Sidhamappa v. Commissioner- of Income-tax, Bombay(2). The power of the officers mentioned in S. 154 of the Income-tax Act, 1961 to correct "any mistake apparent from the record" is undoubtedly not more than that of the High Court to entertain a writ petition on the basis of an "error apparent on the face of the record". In this case it is not necessary for us to spell out the distinction between the expressions 66 error apparent on the face of the record" and "mistake apparent from the record". But suffice it to say that the Income tax Officer was wholly wrong in holding that there was a mistake apparent from the record of the assessments of the first respondent. For the reasons mentioned above we dismiss this appeal with costs.”

Respectfully following the decision of the Hon'ble Supreme Court and in view of the provisions of section 154 of the Act, we are of the considered opinion that in the case of the assessee the mistake is not apparent from the record. Hence, we dismiss the appeal of the assessee. Grounds of appeal are answered accordingly.