2015 (10) TMI 1403 - AT - Income Tax

Rectification of mistake - no interest is payable to the assessee and withdrew the interest granted under section 244A of the Act as held by AO - Assumption of jurisdiction under section 154 by the Deputy Commissioner of Income-tax - Held that - It is not in dispute that the refund granted to the assessee was withdrawn by way of rectification order under section 154 of the Act. It is also not in dispute that the hon ble High Court of Bombay in the case of Stock Holding Corpn. of India 2014 (11) TMI 899 - BOMBAY HIGH COURT has held that the assessee is entitled to interest on refund under section 244A of the Act in respect of self-assessment tax paid. Considering the facts in the light of the judicial decisions referred to hereinabove, in our considered view, the Assessing Officer erred in assuming jurisdiction under section 154 of the Act on a debatable issue. The learned Commissioner of Income-tax (Appeals) further erred in confirming the order of the Assessing Officer. We, therefore, set aside the order of the learned Commissioner of Income-tax (Appeals) and hold that the order passed by the Assessing Officer under section 154 of the Act is bad in law. - Decided in favour of assessee for statistical purposes.

Summary

Issues:
Jurisdiction under section 154 of the Act challenged by the assessee.

Analysis:
The appeal before the Appellate Tribunal ITAT Mumbai involved a challenge to the assumption of jurisdiction under section 154 of the Act by the Deputy Commissioner of Income-tax for the assessment year 2008-09. The Assessing Officer rectified the assessment order under section 154 of the Act, withdrawing the interest granted under section 244A of the Act, leading to the assessee's appeal. The main contention was that the issue was debatable and not a mistake apparent from the record. The Commissioner of Income-tax (Appeals) upheld the rectification, stating that the refund due was less than 10% of the total tax payable, thus denying interest on excess tax to the assessee.

The assessee argued that a mistake apparent on the record must be obvious and patent, not subject to differing opinions. Citing legal precedents, the assessee contended that the assumption of jurisdiction under section 154 was erroneous. The Departmental representative supported the Commissioner's decision. The Tribunal reviewed the orders and legal positions, noting that the High Court had held that interest on refund under section 244A was due in cases of self-assessment tax paid. Consequently, the Tribunal held that the Assessing Officer erred in assuming jurisdiction under section 154 on a debatable issue. The Commissioner's confirmation of the order was also deemed incorrect. Therefore, the Tribunal set aside the Commissioner's order, declaring the Assessing Officer's order under section 154 as legally flawed.

In conclusion, the appeal filed by the assessee was treated as allowed for statistical purposes, with the Tribunal ruling in favor of the assessee due to the erroneous assumption of jurisdiction under section 154 by the Assessing Officer.