2018 (7) TMI 936 - AT - Income Tax

Rectification of mistakes apparent from the record - eligibility for exemption u/s 11 - Held that - As pointed out by the assessee, there is a mistake apparent from the record in the order, para No. 7 in the order is modified as under 7. We notice from the record produced by the assessee that assessee has deducted relevant tax on security charges. Even though, assessee has submitted the document before the AO, still AO disallowed the expenditure. This issue should go back to AO for verification and deletion of the above disallowance. Since, the findings of CIT(A) are confirmed by us, consequently, assessee is eligible for exemption u/s 11. Hence, this ground becomes academic in nature, accordingly, this ground raised by the assessee is allowed.

Summary

Issues: Rectification of mistakes apparent from the record in the order of the Tribunal dated 10/11/2017 in ITA No. 332//Hyd/2017.

Analysis:
1. The assessee filed a Miscellaneous Application seeking rectification of mistakes in the Tribunal's order. The applicant highlighted a discrepancy in the order related to the disallowance made under section 40(a)(ia) and the subsequent exemption under section 11. The applicant argued that the mention of ground no.3 in the order was a mistake and clarified that the relevant ground was actually ground No.4, which contested the disallowance under section 40(a)(ia).

2. The applicant presented evidence in the form of documents from the books of account to support their claim that tax was deducted on the security charges paid. The applicant emphasized that the Tribunal failed to consider this factual evidence, leading to a mistake apparent from the record. The applicant requested the Tribunal to rectify this error by directing the Assessing Officer to verify and delete the disallowance of the expenditure.

3. The ld. DR representing the Revenue conceded the submission made by the ld. AR of the assessee regarding the mistake in the order. After considering the arguments from both sides and examining the material on record, the Tribunal acknowledged the mistake and modified the order. The Tribunal directed that the issue of disallowance of expenditure should be sent back to the Assessing Officer for verification and deletion, as the assessee had deducted the relevant tax on security charges. The Tribunal concluded that since the findings of the CIT(A) were confirmed, the assessee was eligible for exemption under section 11, rendering the contested ground academic in nature. Consequently, the Tribunal allowed the ground raised by the assessee in the Miscellaneous Application.

4. In the final decision, the Tribunal allowed the Miscellaneous Application filed by the assessee, and the rectification of the mistake apparent from the record was pronounced in the open court on 5th July 2018.