2015 (9) TMI 612 - HC - Income Tax

Rectification under Sec.154 - assessee seeking to rectify the order of assessment, contending that out of the gross income of ₹ 2,66,50,000/- an amount of ₹ 84,00,000/- was received during the previous year ending 31.03.2005 from Mr. K.K. Joseph as loan and ₹ 1,62,50,000/- was also received as loan from K.K. Joseph during the current year - Held that - On a perusal of the facts, the orders rendered by the statutory authorities and the Tribunal and appreciating the pleadings put forth, we are of the considered opinion that the question raised for invoking Sec.154 of the Act was a question ought to have been raised in a regular appeal and the same has nothing to do with rectification of any mistake apparent from the record. The findings entered by the Assessing Authority was based clearly on facts which was susceptible to an appeal. We also did not find any error apparent from the record which enabled the assessee to invoke the said provision. In the said circumstances, we do not find any illegality or other legal infirmities in the finding entered by the Appellate Tribunal so as to invoke our jurisdiction conferred under Sec.260A

Summary

Issues:
1. Rectification under Sec.154 of the Income Tax Act based on the order of the Assessing Officer.
2. Treatment of corpus donation in the hands of the assessee.
3. Appeal against the decision of the Assessing Officer and the Commissioner of Income Tax (Appeals).
4. Interpretation of the provisions of Sec.154 for rectification of mistakes apparent from the record.

Detailed Analysis:
1. The appeal was filed by the assessee against the order of the Income Tax Appellate Tribunal, which held that there was no mistake apparent from the record in the Assessing Officer's order to seek rectification under Sec.154 of the Income Tax Act. The Tribunal found that the appeal filed by the Revenue was allowed as there was no error evident in the Assessing Officer's decision.

2. The issue revolved around the treatment of corpus donation in the hands of the assessee trust. The Commissioner of Income Tax (Appeals) allowed the appeal partly, holding that the amount converted from a loan account to corpus donations fell under voluntary contributions as per Sec.11(1)(d) of the Income Tax Act. The Assessing Officer was directed to exclude the corpus donation from the total income of the assessee.

3. The appellant had chosen to file an application for rectification under Sec.154, contending that certain amounts were received as loans and corpus donations. The Commissioner of Income Tax (Appeals) partially allowed the appeal, leading to the Revenue filing an appeal before the Appellate Tribunal. The Tribunal found that the remedy did not lie before the Assessing Officer, and there was no mistake apparent from the record to invoke Sec.154.

4. The judgment delved into the interpretation of Sec.154, emphasizing that rectification is meant to correct errors that are apparent from the record. The court cited precedents to explain that rectification is not meant to disturb finality but to correct errors. It was clarified that the power under Sec.154 is akin to a review power and is not meant to change the ultimate conclusion of a decision.

In conclusion, the court dismissed the appeal as it did not find any legal infirmities in the Tribunal's finding. The judgment highlighted that the question raised for invoking Sec.154 should have been raised in a regular appeal and did not pertain to rectification of any mistake apparent from the record. The decision underscored the limited scope of rectification under Sec.154 to correct errors, not to disturb concluded findings.