1987 (5) TMI 69 - AT - Income Tax

Summary

Issues: Appeal against order cancelling ex parte assessment u/s. 154 for Assessment year 1982-83.

Analysis:
The case involves an appeal by the assessee against the order of the Appellate Asstt. Commissioner cancelling the ex parte assessment for the Assessment year 1982-83. The Income-tax Officer initially completed the assessment on the supposition that the assessee had not filed a return despite actually filing one. The assessee contended that the ITO had no jurisdiction to cancel the ex parte assessment u/s. 154. The counsel for the assessee argued that the ITO could only rectify a mistake apparent from the record and could not efface the order itself. The Departmental Representative, on the other hand, relied on the orders of the Income-tax authorities. The Tribunal considered the submissions and the decision cited by the assessee, emphasizing that rectification under section 154 is to correct an error apparent on the face of the record, without limitations other than time and the error being apparent. The Tribunal disagreed with the assessee's contention, stating that the power under section 154 is to rectify an error in the order, which may involve amending the order to eliminate the error. The Tribunal cited the decision of the Hon'ble Bombay High Court in a similar case to support this interpretation. The Tribunal highlighted that the correction may extend to the whole or a part of the order, depending on the error's nature. It was noted that the assessee's argument was based on the difference in assessed income, which would not affect the power of the ITO to rectify the error. The Tribunal held that the ITO could rectify the ex parte assessment under section 154, dismissing the appeal.

In conclusion, the Tribunal upheld the order cancelling the ex parte assessment under section 154 for the Assessment year 1982-83. The Tribunal clarified that the power under section 154 allows for rectification of errors apparent on the face of the record, which may involve amending the order to correct the error. The Tribunal emphasized that the ITO's power to rectify extends to the whole or a part of the order as necessary for rectification. The Tribunal rejected the assessee's argument that the ex parte assessment could not be rectified under section 154 based on the difference in the assessed income declared by the assessee. The Tribunal's decision was based on the interpretation of the provisions and relevant legal principles, affirming the ITO's authority to rectify errors in the assessment order.