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2024 (6) TMI 877 - AT - Income TaxRectification of mistake - charging the correct income in the hands of the assessee - whether the assessee has received interest from the partnership firm? - HELD THAT - It appears to be mistake apparent from the record and therefore, the application filed by the assessee u/s 154 is required to be adjudicated on merit and therefore, considering that aspect of the matter, we set aside the matter with a direction to the AO to make necessary inquiry and obtained evidence from the assessee and considered the plea of the assessee on merits and charged the tax in accordance with law based on the correct income. We get strength to support of our wherein on the similar circumstances the co ordinate bench of Mumbai has considered the plea of the assessee. Out of the judgment so relied upon by the assessee we find that on the similar circumstances as that of the assessee was in the case of Shri Sumanchandra G. Mehta 2013 (12) TMI 358 - ITAT MUMBAI Thus we direct the AO to decide the application of the assessee filed u/s.154 after making necessary relief and decide the issue of charging the correct income in the hands of the assessee. In terms of these observations, the appeal of the assessee is allowed for statistical purposes.
Issues involved:
The issues involved in the judgment are related to the rejection of rectification application, addition of interest income from a partnership firm, the possibility of rectification u/s 154 of the Income Tax Act, the correctness of the return filing, and the principle of Article 265 of the Constitution of India. Rectification Application: The assessee filed a rectification application under Section 154 of the Income Tax Act, 1961, seeking correction of a mistake in the order passed under Section 143(1). The application was rejected by the Income Tax Officer, Tonk, leading to the appeal before the ld. CIT(A)/NFAC. Interest Income Addition: The assessee, a partner in a partnership firm, received interest and remuneration totaling Rs. 2,13,100. However, there was a discrepancy in the interest income amount punched in the return, leading to a computation error. The correctness of this addition of Rs. 11,65,000 on account of interest from the firm was contested by the assessee. Rectification u/s 154: The assessee argued that even if the return was filed under Section 139(4) of the Act, Section 154 permits rectification of a mistake apparent on the face of the record. The application for rectification was based on the discrepancy in the interest income figures, which was considered a mistake that needed rectification. Correctness of Return Filing: The issue of whether the return filing was correct or if it should have been a revised return was raised. The assessee corrected the return after realizing the mistake in punching the interest income figure. The contention was made that it was a case of filing a corrected return rather than a revised return. Principle of Article 265: The argument was presented regarding the principle of Article 265 of the Constitution of India, which states that no tax can be retained without the authority of law. The assessee contended that the failure to rectify a mistake apparent on the face of the intimation under Section 143(1) would go against this constitutional principle. Judgment Summary: The Appellate Tribunal directed the Assessing Officer to conduct a necessary inquiry and obtain evidence to determine the correct income of the assessee based on the interest income discrepancy. The Tribunal relied on previous judgments where similar rectifications were allowed, emphasizing the need for fairness to the taxpayer. The appeal of the assessee was allowed for statistical purposes, and the matter was remanded for the correct assessment of income in the hands of the assessee.
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