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2024 (12) TMI 315 - AT - Income TaxRectification u/s 154 - rectification application to rectify the order u/s. 143(1) for allowing his claim of interest paid u/s 24(b) - HELD THAT - We find ourselves in agreement with the contention of the DR that failure to raise the ground cannot said to be a mistake apparent from record. There is no doubt that the assessee furnished the necessary evidence in support of the said interest payment in course of the rectification proceedings before the AO. The fact remains that when the return was processed by the AO, no details/evidence in respect of said interest payment were available from the return filed. We further find that it is a settled law that if clear data is not available, it is not obligatory on the part of the AO to pass rectification order u/s. 154. Therefore, the action of the AO of rejecting the request of the assessee for rectification, cannot be faulted, hence, Ld. CIT(A) rightly affirmed the aforesaid action of the AO, which in our considered view, need not be interfered.
Issues:
Claim of interest on construction of house property disallowed by AO and CIT(A) - Mistake apparent from record under section 154 - Entertaining new grounds before Appellate Tribunal. Analysis: 1. Claim of interest disallowed: The Assessee filed an appeal against the Order of the Ld. CIT(A) relating to the assessment year 2014-15, challenging the disallowance of the claim for interest on construction of a house property amounting to Rs. 31,17,879. The Assessee contended that all details regarding the claim were made available before the Assessing Officer (AO) and that the mistake was apparent from the record. However, the AO rejected the rectification application under section 154, stating that it was a mistake on the part of the Assessee. The Ld. CIT(A) also upheld the AO's decision, emphasizing the requirement of a mistake apparent from the record for rectification under section 154. 2. Rectification proceedings and legal principles: The Assessee filed a rectification application to correct the order under section 143(1) to allow the claim of interest paid under section 24(b). The Ld. CIT(A) observed that the rectification under section 154 can only be done if there is a mistake apparent from the record, as per legal precedents. The Hon'ble Supreme Court's decision in the case of Keshri Metal (P) Ltd. (237 ITR 165) was cited to support the view that rectification cannot be based on documents outside the record. The Ld. CIT(A) noted that although the Assessee provided evidence during rectification proceedings, the original return did not contain details of the interest payment, leading to the rejection of the rectification request by the AO. 3. Appellate Tribunal's decision: The Appellate Tribunal considered the arguments presented by both parties and held that failure to raise a ground cannot be considered a mistake apparent from the record. Despite the Assessee providing evidence during rectification proceedings, the absence of clear data in the original return led to the rejection of the rectification request by the AO. The Tribunal concurred with the Ld. CIT(A)'s decision to affirm the AO's action, stating that it was not obligatory for the AO to pass a rectification order under section 154 when clear data was not available. Consequently, the Tribunal dismissed the Assessee's appeal, upholding the actions of the lower authorities. In conclusion, the Appellate Tribunal dismissed the Assessee's appeal, affirming the decisions of the lower authorities regarding the disallowance of the claim for interest on the construction of a house property. The Tribunal emphasized the requirement of a mistake apparent from the record for rectification under section 154 and upheld the principle that rectification cannot be based on information outside the original return.
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