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2023 (2) TMI 352 - AT - Income TaxRectification of mistake u/s 154 - calculation of claim u/s 54EC deduction - HELD THAT - Assessee has shown proper calculation of capital gains and claimed 54EC deduction, however, ADIT(CPC) has made adjustment under section 143(1) against which assessee filed rectification Application under section 154 of the Act. CPC passed rectification order without considering assessee s submission. CPC has not given any reasons in the rectification order. Assessee filed appeal before the ld.CIT(A) against the order under section 154 - CIT(A) has merely stated that the grounds of appeal raised by the assessee are beyond the scope of section 154 - CIT(A) failed to appreciate the facts narrated by the assessee in the submissions and documents filed by the assessee. In this case, all the facts are emanating from the Return of Income filed by the assessee. Hence, ld.CIT(A) has to consider Return of Income and the rectification application filed by the assessee. CIT(A) has not discussed these facts. CIT(A) has failed to pass a speaking order, therefore in the interest of justice we set-aside the order to the CIT(A) for denovo adjudication. CIT(A) shall give opportunity of being heard to the assessee before passing the order. Accordingly, grounds raised by the assessee are allowed for statistical purpose.
Issues:
Appeal against order under section 154 of the Income Tax Act for A.Y. 2020-21. Analysis: The appeal was filed by the Assessee against the order of the Commissioner of Income Tax (Appeal) for the Assessment Year 2020-21, arising from the Assessing Officer's order under section 154 dated 22.04.2022. The Assessee contended that the Commissioner erred in not rectifying the mistake apparent from records, which led to an increase in income under the head "Business & Profession." The Assessee correctly showed capital gains and claimed exemption under section 54EC of the Act. However, the Assessing Officer reduced the amount of capital gains and increased the income under "Business & Profession." The Assessee filed a rectification application before the CPC, which did not rectify the defect but further increased the income under "Business & Profession." The Commissioner failed to adjudicate on the issue, stating it was beyond the scope of section 154. The Assessee argued that all facts were in the Return of Income, and the CPC did not consider all available data, making it a mistake apparent from the record. The Departmental Representative for the Revenue admitted the facts presented by the Assessee. The Tribunal heard both parties and examined the records. It was observed that the Assessee had correctly calculated capital gains and claimed the 54EC deduction. However, the CPC made adjustments under section 143(1) without considering the Assessee's submissions. The CPC's rectification order lacked reasoning. The Commissioner, in turn, dismissed the appeal stating it was beyond the scope of section 154. The Tribunal found that the Commissioner failed to appreciate the facts presented by the Assessee. Since all relevant facts were in the Return of Income, the Commissioner should have considered both the Return and the rectification application. As the Commissioner did not provide a detailed explanation, the Tribunal set aside the order for fresh adjudication, instructing the Commissioner to allow the Assessee an opportunity to be heard. The grounds raised by the Assessee were allowed for statistical purposes, and the appeal was allowed accordingly. The Tribunal pronounced the order on 8th February 2023, allowing the Assessee's appeal for statistical purposes.
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