2020 (12) TMI 603 - AT - Income Tax

Rectification of mistake u/s 154 - income from business has been offered to tax by the appellant during assessment proceedings as per the working filed by the appellant during assessment proceedings which does not include income from other sources mainly on account of bank FDR interest - HELD THAT - It is pertinent to note that the assessee agreed for Business income from contract receipts at ₹ 1.46 crores, which was independent of income from bank interest at ₹ 22.54 lakhs that was declared by the assessee under the head Income of other sources. Assessing Officer in the assessment order inadvertently adopted Business income of ₹ 1.46 Crores as Total income, which had the effect of excluding Income from other sources at ₹ 22.54 lakhs, which was independently offered by the assessee in its return of income and was not a subject matter of any dispute. It is this mistake which the AO rectified in the current proceedings u/s.154 of the Act by also including Income from other sources amounting to ₹ 22.54 lakhs in the total income, which was earlier omitted to be included in the original assessment order. In our considered opinion, it is a clear-cut case of the AO carrying out rectification of a glaring and patent mistake committed in the original assessment order. By no standard, it can be construed as a debatable point amenable to two views. We, therefore, uphold the impugned order. Appeal of the assessee is dismissed.

Summary

Issues involved:
1. Addition of ?22,54,821 as a mistake apparent from the record under section 154 of the Income Tax Act, 1961.
2. Whether the addition made through the order of rectification was justified.

Detailed Analysis:
Issue 1: The primary issue in this case revolves around the addition of ?22,54,821 as a mistake apparent from the record under section 154 of the Income Tax Act, 1961. The Assessing Officer (AO) made this addition based on the assertion that the income from other sources, specifically interest income, was not included in the original assessment order. The AO believed that this omission constituted a mistake apparent from the record, warranting rectification.

Issue 2: The crux of the matter was whether the addition made through the order of rectification was justified. The appellant contended that the agreed addition already considered the amount in question, and therefore, adding it separately under section 154 was unwarranted. The appellant argued that the total income was determined after due consideration, and any change to the agreed addition would be a matter of debate and discussion, not a mistake apparent from the record.

Analysis of the Judgment: The Tribunal examined the facts presented by both parties. The AO's position was that the income from other sources was not included in the original assessment order, leading to the rectification under section 154. However, the appellant maintained that the agreed addition already factored in the disputed amount. The Tribunal scrutinized the computation of income and observed that the appellant had agreed to a specific business income amount, which did not encompass the income from other sources in question.

The Tribunal ultimately upheld the rectification order, emphasizing that the AO rectified a clear-cut mistake in the original assessment by including the omitted income from other sources. The Tribunal concluded that this was not a debatable point but a straightforward rectification of an error. Therefore, the appeal of the assessee was dismissed, affirming the addition of ?22,54,821 as a mistake apparent from the record under section 154.

In conclusion, the Tribunal's decision centered on the necessity to rectify the omission of income from other sources in the original assessment order, deeming it a clear mistake rather than a debatable issue. The judgment underscores the importance of ensuring accuracy and completeness in assessment procedures to maintain the integrity of tax assessments.