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Income Tax Appellate Tribunal, DELHI ‘B’ BENCH,
Before: SHRI N.K. BILLAIYA, & SHRI ANUBHAV SHARMA
PER N.K. BILLAIYA, ACCOUNTANT MEMBER:-
This appeal by the assessee is preferred against the order of the ld. CIT(A), Delhi - 42 dated 08.02.2023 pertaining to Assessment Year 2012-13.
The grievances of the assessee read as under:
“1. That on the facts and circumstances of the case and in law, the order dated 08.02.2023 passed by the Commissioner of Income- tax (Appeals) ["CIT(A)"], upholding the action of the assessing officer in assessing the book profit of the Appellant under section 115J8 of the Income-tax Act, 1961 ("the Act") at Rs.76, 16,35,349 against returned book profit of Rs.71 ,57,92, 161, is bad in law, unsustainable and invalid.
2. That on the facts and circumstances of the case and in law, the CTT(A) erred in not quashing the order passed by the assessing officer under section 154 of the Act on the ground that the same was beyond jurisdiction, void ab initio and bad in law inasmuch as powers of rectification were exercised qua a purely debatable issue.
3. That on the facts and circumstances of the case and in law, the CIT(A) erred in upholding the action of the assessing officer in adding back provision for mark-to-market losses to the book profit under section 115J8, not appreciating that the same was not 'mistake apparent from record' for exercise of powers of rectification under section 154 of the Act.
4. Without prejudice, that on the facts and circumstances of the case and in law; the CIT(A) erred in upholding the addition ofRs.4,58,43, 188 made by the assessing officer to the book profit computed under section 115J8 of the Act.
5. That on the facts and circumstances of the case and in law, the CIT(A) erred in not deleting interest levied by the assessing officer under section 2348 and section 234C of the Act. “
Representatives of both the sides were heard at length. Case records carefully perused. Relevant documentary evidence brought on record duly considered in light of Rule 18(6) of the ITAT Rules.
Briefly stated, the facts of the case are that the assessee filed its return of income on 29.11.2012 declaring total income of Rs. 43.02 crores with current year loss of Rs. 143.02 crores under the head ‘long term capital loss’. The assessee has also shown book profit of Rs. 71.57 crores. Assessment was framed vide order dated 29.04.2016 u/s 143(3) r.w.s 144C of the Act.
The assessee preferred appeal before the ld. CIT(A) and while giving effect to the appellate order u/s 250/143(3) of the Act, the Assessing Officer rectified the assessment order dated 29.04.2016 u/s 154 of the Act and made addition of Rs. 4,58,43,188/-.
The assessee challenged this order before the ld. CIT(A) but without any success.
We have given thoughtful consideration to the order dated 23.05.2019 framed u/s 154 of the Act while giving appeal effect to the appellate order u/s 250 r.w.s 143(3) of the Act. We do not find any justification in this order by the Assessing Officer, in as much as, he was only supposed to give appeal effect to the order of the first appellate authority and should not have invoked the provisions of section 154 of the Act while giving appeal effect.
There is no provision in law wherein the Assessing Officer has power to rectify the original assessment order while giving appeal effect to the order of the ld. CIT(A). On this understanding of the law, we direct the Assessing Officer to delete the impugned addition as the order dated 23.05.2019 is quashed.
In the result, the appeal of the assessee in is allowed.
The order is pronounced in the open court on 18.09.2023.