2018 (1) TMI 1694 - AT - Income Tax

Rectification of mistake u/s 254 - AO is not empowered to re-compute the tax payable by the assessee as per clause (b) of section 143(1) - HELD THAT - As rightly contended by the ld. D.R. the issue on which rectification was sought by the assessee in intimation issued by the Assessing Officer under section 143(1)(a) was beyond the scope of adjustment permissible under section 143(1)(a) and the application of the assessee filed under section 154 for such rectification was rightly rejected by the AO. Moreover the said issue being highly debatable one at the relevant time was beyond the scope of rectification permissible under section 154. As a matter of fact there was a mistake in the return of income filed by the assessee in computing the tax payable on the income returned and adjustment for the same therefore was made by the Assessing Officer as per clause (b) of section 143(1). As rightly contended by the ld. D.R. all these aspects were duly taken into consideration by the Tribunal while dismissing the appeal of the assessee vide its order dated September 27 2017 and there is no mistake much less a mistake apparent from record in the said order of the Tribunal. What the assessee is seeking by way of present Miscellaneous Application is nothing but a review of the decision taken by the Tribunal - Miscellaneous Application filed by the assessee is dismissed.

Summary

Issues:
Rectification of mistakes in the order of the Tribunal dated September 27, 2017 under section 143(1) and section 154 - Scope and applicability.

Analysis:
The assessee filed a Miscellaneous Application seeking rectification of alleged mistakes in the Tribunal's order dated September 27, 2017. The assessee contended that the alteration in the returned figure cannot be done under section 143(1) beyond its limited scope, citing an example of a tax figure changed by CPC, which was deemed impermissible. The assessee argued that section 154 allows rectification of mistakes apparent from the record, not limited to the return, and emphasized that the word "Record" includes all materials in assessment proceedings. Additionally, the assessee highlighted the exempt status of income from foreign sources for an N.R.I. and relied on relevant CBDT Circulars and High Court decisions to support the claim. The Tribunal was urged to re-examine the matter thoroughly.

The Departmental Representative contended that there were no mistakes in the Tribunal's order as alleged by the assessee. It was argued that the Assessing Officer had the authority to re-compute tax under section 143(1)(b) and that the adjustment sought by the assessee was beyond the scope of section 143(1)(a) and rightly rejected under section 154. The Departmental Representative also emphasized that the issue raised by the assessee was highly debatable and thus not suitable for rectification under section 154. It was asserted that the Tribunal had considered all aspects while dismissing the appeal, and no mistake was apparent from the record in the order.

Upon considering the submissions and relevant material, the Tribunal found that the issue raised by the assessee for rectification was beyond the permissible scope of section 143(1)(a) and rightly rejected under section 154. The Tribunal agreed with the Departmental Representative that the issue was debatable at the relevant time and not suitable for rectification under section 154. The Tribunal noted that the Assessing Officer had made adjustments as per section 143(1)(b) for the mistake in the return of income. It was concluded that the Miscellaneous Application was essentially seeking a review of the Tribunal's decision, which was not permissible under section 254(2). Therefore, the Tribunal dismissed the Miscellaneous Application, finding no merit in the assessee's claims.

In conclusion, the Tribunal upheld the dismissal of the Miscellaneous Application, emphasizing that the rectification sought was beyond the scope of permissible adjustments under section 143(1)(a) and section 154. The Tribunal reiterated that the issue raised was debatable and not a mistake apparent from the record, affirming the decision taken in the original order dated September 27, 2017. The Tribunal's decision was final, and the Miscellaneous Application was dismissed accordingly.