2024 (6) TMI 1389 - AT - Income Tax

Rectification of mistake u/s 154 - Deduction u/s 80IA claimed through belated filling of return of income - Without verifying whether the return of income is filed in time or not, AO allowed the claim - HELD THAT - When the assessee is making a claim, he has to file return of income in time otherwise as per the provisions of section 80AC of the Act, no deduction under section 80IA of the Act would be allowed. Prima-facie, the AO committed a patent mistake allowing the claim of the assessee. The mistake committed by the AO is a mistake apparent on record. In our opinion, the mistake committed by the AO which is apparent on record can be rectified by the AO u/s 154 of the Act. In this case, the AO has rightly invoked provisions of section 154 and rectified the mistake committed by him. Moreover, the rectification done by the AO in this case is not at all a debatable issue for the reason that it is an admitted fact that the assessee filed return of income belatedly. As per the provisions of section 80AC of the Act, no claim can be allowed if the return of income is filed belatedly. Therefore, the AO has rightly exercised his power and rectified the mistake and no debatable issue is involved. Assessee s appeal is dismissed.

Summary

Issues:
Appeal against order disallowing claim under section 80IA of the Income Tax Act for assessment year 2008-09 due to belated filing of return of income.

Analysis:
The assessee, engaged in infrastructure projects, filed a belated return of income claiming deduction under section 80IA of the Income Tax Act. The Assessing Officer allowed the claim but later issued a show cause notice under section 154 proposing to withdraw the deduction due to the belated filing. The assessee argued that the delay was due to a search conducted at their premises and was not willful. The Assessing Officer rectified the mistake under section 154 and disallowed the claim. The assessee appealed to the CIT(A), who dismissed the appeal. The Tribunal directed the CIT(A) to reconsider, but the appeal was again dismissed. The main argument was whether the Assessing Officer could disallow a claim already allowed. The Tribunal held that the mistake of allowing the claim was apparent on record and could be rectified under section 154. The Tribunal rejected the case laws cited by the assessee, stating they were not applicable to the present case. Consequently, all grounds raised by the assessee were dismissed, and the appeal was rejected.

In conclusion, the Tribunal upheld the decision to disallow the claim under section 80IA of the Income Tax Act due to the belated filing of the return of income. The Tribunal found that the Assessing Officer had rectified a mistake apparent on record by invoking section 154. The arguments presented by the assessee were deemed not applicable to the case, leading to the dismissal of the appeal.