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2013 (8) TMI 181 - AT - Income TaxRectification of mistake - application rejected - whether were there are two opinions, the rectification u/s 154 can be done? - as per assessee in column no.24 (Part B- computation of total income) has been left blank although information of exempted income has been shown in Schedule -F3(ii)/F3(ix) of the return - Held that - It is a case of omission to claim exemption of income in the return of income, therefore, the case of the assessee does not fall in the definition of incorrect claim as is mentioned in Section 143(1)(a) of the Act read with its explanation. Further the assessee claimed that in Schedule-F-3(ix) though exempt income is mentioned but no claim is made in computation of total income could not be accepted because there is no authenticity of Schedule-F under the law because the computation of total income in Part-B shall be subjected to verification which assessee has verified to be correct income. When the assessee has verified the total taxable income at ₹ 3,41,73,652/- to be correct and complete, there is no question of making any withdrawal from such statement. Schedule-F is not subject to any verification therefore, as against unverified statement in Schedule-F, the preference to verified statement on oath shall have to be given precedents and preference. Therefore, the claim of the learned counsel for assessee that assessee made a claim of exempt income in Schedule-F cannot be accepted. The assessee has made claim in application under Section 154 of the I.T. Act that the taxable income of the assessee should be revised and the A.O. should hold that the entire income of the assessee to be exempt, however, the A.O. has no such power to make the claim of the assessee acceptable by making a long drawn process of reasoning. Since no claim of deduction of exempt income has been made in the return of income and A.O. accepted the return of income filed by assessee as it is, therefore, there was no mistake apparent on record of the Revenue Department. Thus, the rectification application under Section 154 was not maintainable - appeal of the assessee dismissed.
Issues Involved:
1. Whether the rejection of the application filed under Section 154 of the Income Tax Act by the assessee was justified. 2. Whether the omission to claim exempt income in the return of income constitutes a mistake apparent from the record. 3. Whether the Assessing Officer (A.O.) has the power under Section 154 to rectify such an omission. Issue-wise Detailed Analysis: 1. Rejection of Application under Section 154: The assessee challenged the order of the learned CIT(A) in confirming the rejection of the application filed under Section 154 of the I.T. Act. The application was filed due to an omission in the return of income where exempt income was not carried forward to Part-B of the computation of income. The A.O. found the issue complicated and referred it to the Additional Commissioner of Income Tax, who directed that the issue was not a mistake apparent from the record, leading to the rejection of the application under Section 154. 2. Omission to Claim Exempt Income: The assessee argued that the omission to claim exempt income in the return was a mistake apparent on the record. However, the learned CIT(A) and the Tribunal held that the A.O. had no means to examine such an error while processing the return for the limited purpose under Section 143(1). The Tribunal cited the Hon'ble Supreme Court's decision in T.S. Balaram, Income-Tax Officer, Company Circle IV, Bombay Vs. Volkart Brothers and others (1971) 82 ITR 50 (SC), which stated that a mistake apparent on the record must be obvious and patent, not requiring a long drawn process of reasoning. 3. Power of A.O. under Section 154: The Tribunal analyzed Section 143(1) of the I.T. Act, which allows the A.O. to make adjustments for any arithmetical error or incorrect claim apparent from the return. The Tribunal concluded that the omission to claim exempt income was not an arithmetical error or an incorrect claim as defined under the Act. The Tribunal also referenced various judicial precedents, including Hindustan Liver Ltd. Vs. Joint Commissioner of Income Tax and others [2006] 284 ITR 42 (Cal) and Punjab State Co-operative Supply & Marketing Federation Ltd. Vs. Deputy Commissioner of Income Tax 173 Taxman 15, which supported the view that such omissions do not constitute mistakes apparent from the record. Conclusion: The Tribunal upheld the rejection of the application under Section 154, stating that the A.O. processed the return as filed by the assessee, which showed a total income of Rs. 3,41,73,652/- without claiming any exempt income. The Tribunal emphasized that the A.O. has no power to rectify the return under Section 154 for omissions made by the assessee. The appeal of the assessee was dismissed, affirming that the rectification application was not maintainable. Final Judgment: The appeal of the assessee is dismissed. The Tribunal found no justification to interfere with the order of the learned CIT(A), confirming the rejection of the application under Section 154 of the I.T. Act.
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