1998 (10) TMI 88 - AT - Income Tax

Rectification Of Mistakes, Rectification Of Mistakes, Apparent From Record, Assessment Proceedings

Summary

Issues Involved:

1. Addition of Rs. 47,006 as income from LIC deposit.
2. Rejection of evidence and explanation by the assessee.
3. Denial of rectification under section 154 of the Income-tax Act, 1961.

Issue-wise Detailed Analysis:

1. Addition of Rs. 47,006 as income from LIC deposit:
The assessee contested the addition of Rs. 47,006, which was reflected as a deposit in the bank account, arguing that this amount was received from LIC as income. The confirmation for this deposit was filed during the assessment proceedings for the assessment year 1984-85. The CIT(A) upheld this addition without appreciating the prior submission of evidence.

2. Rejection of evidence and explanation by the assessee:
The CIT(A) was criticized for arbitrarily rejecting the information, explanation, and evidence provided by the assessee. The assessee had established that the evidence supporting the source of the Rs. 47,006 deposit existed in the records of the Assessing Officer from the assessment year 1984-85. Despite this, the CIT(A) failed to acknowledge this evidence, leading to the addition of the amount for want of an already existing evidence.

3. Denial of rectification under section 154 of the Income-tax Act, 1961:
The assessee's appeal, initially dismissed ex parte, was later followed by an application for rectification under section 154. The CIT(A) observed no apparent mistake in the appellate order that could be rectified under section 154. The assessee argued that the evidence for the Rs. 47,006 deposit was already on record from the previous assessment year, and the failure to consider this constituted a mistake apparent from the record. The CIT(A) rejected this application, maintaining that the addition had already been confirmed for detailed reasons in the appellate order.

Judgment Analysis:

The Tribunal reviewed the facts and submissions, emphasizing that the term 'record' should not be given a narrow interpretation. Referring to the Supreme Court's interpretation in similar contexts, the Tribunal noted that 'record' includes all documents forming part of the case up to the time of review. The Tribunal concluded that the certificate from LIC, which was on record for the assessment year 1984-85, should have been considered. The CIT(A) was duty-bound to act upon the rectification application, treating the documentary evidence from the earlier assessment year as part of the record. The Tribunal found the CIT(A)'s order improper and not in conformity with the law, thus directing the deletion of the addition.

Conclusion:

The appeal of the assessee was accepted, and the order of the authorities below was set aside. The Assessing Officer was directed to delete the addition of Rs. 47,006.