2014 (5) TMI 449 - HC - Income Tax

Power of rectification u/s 154 of the Act - Rejection of Securities Transaction Tax - Whether the Tribunal fell into error in rejecting the assessee s claim for credit of Securities Transaction Tax (STT), proof of which was concededly attached to the return Held that - The power of rectification extends to amendment of intimation or deemed intimation under Section 143- This power enures even after the matter has been considered and decided in any proceeding by way of appeal or revision - this power extends even at the stage of the appeal and the further appeal to the ITAT - Even after such decision, it is open to the AO to amend the intimation u/s 143 (1) if the circumstances so warrant - Commissioner of Income Tax Versus Sam Global Securities Ltd. 2013 (9) TMI 876 - DELHI HIGH COURT - the technicalities in the given circumstances of the case ought not to obscure the justice - The justice demands that there is no impediment to relief - That appears to have been overlooked in entirety by the lower authorities and the Tribunal had failed to notice that the controlling expression in Section 154 is not an error which is somewhat colored by the exercise of power by the authorities - instead, the controlling expression is any mistake which has wider connotation and includes mistakes committed by the parties also Decided in favour of Assessee.

Summary

Issues:
1. Whether the ITAT erred in rejecting the assessee's claim for credit of Securities Transaction Tax (STT) due to an error in mentioning STT as TDS in the return.

Analysis:
1. The case involved a dispute regarding the rejection of the assessee's claim for credit of STT by the ITAT. The assessee reported a total income for AY 2008-09 but failed to disclose the STT paid. The AO rejected the rectification request, leading to unsuccessful appeals. The ITAT rejected the claim based on the assessee's mention of nil income from STT transactions and rebate under Section 88E being zero. The ITAT emphasized that STT payment alone does not entitle a rebate; the income must include taxable securities transactions. The certificate provided did not specify the income arising from the transactions, leading to the rejection of the claim.

2. The counsel argued that the ITAT overlooked Section 154(1)(b) of the Income Tax Act, allowing amendment of intimation under Section 143(1). Reference was made to Section 154(1A) for post-decision amendments. A precedent case was cited to support the argument. The Revenue's counsel contended that the assessee's error in mentioning STT as TDS precluded rectification by the AO.

3. The court examined Section 154, emphasizing the authority's power to rectify mistakes, including amending intimation under Section 143. The provision allows post-appeal or revision amendments. The court agreed with a precedent that justice should not be obscured by technicalities. The controlling term is "any mistake," encompassing errors by parties. The court found in favor of the assessee, emphasizing the broader interpretation of "mistake" under Section 154, allowing relief despite technical errors.

4. Consequently, the court ruled in favor of the assessee, holding that the ITAT erred in rejecting the claim for STT credit. The appeal was allowed without costs, highlighting the importance of considering the broader scope of "mistake" under Section 154 for rectification purposes.