2019 (3) TMI 1304 - AT - Income Tax

Rectification of mistake u/s 154 - Wrong figure mentioned in FBT return - No revised return filed - Rectification application filed requesting AO to take the figure of FBT as per profit and loss account - HELD THAT - Assessee some error was committed by the assessee while filing the return for FBT. The assessee declared fringe benefit of ₹ 2,19,470/-. Whatever figure was given by the assessee has been accepted by the department. Therefore. there is no mistake apparent on record from the side of the Revenue Department because whatever figure was declared by the assessee has been accepted by the department. If there was any mistake in the return of income containing miscalculation of FBT, proper course is allowed under the Income Tax Act to file a revised return of income. However, the assessee did not take any steps in this regard. Therefore, no mistake is attributable to the assessing officer which should be rectified under section 154. The assessee is responsible for his own acts and as such, Learned CIT(A) correctly dismissed the appeal of assessee. The appeal of assessee is dismissed.

Summary

Issues:
- Challenge to the rejection of application under section 154 of the Income Tax Act 1961.

Analysis:
1. The appeal was against the order confirming the rejection of the application under section 154 of the Income Tax Act 1961. The assessee filed a rectification application requesting the assessing officer to consider the FBT figure as per the profit and loss account. The assessing officer rejected the application citing a miscalculation by the assessee, leading to the department's non-involvement. The assessee did not file a revised return of income, resulting in the rejection of the application.

2. The assessee contended that a system error occurred while importing FBT data, attributing it to another client's data. The mistake went unnoticed during the filing and assessment process. The assessee highlighted discrepancies in expenses, indicating the error in figures was realized later, after receiving a demand notice. The appellant's inability to revise the return within the specified time led to the application under section 154, which was rejected by the assessing officer.

3. The Learned CIT(A) dismissed the appeal, emphasizing that the assessee had the opportunity to revise the return under section 139(5) before the assessment completion. As the assessee failed to rectify the error within the prescribed time limit, the appellate proceedings did not allow for revising the details in the return. The assessing officer's rejection of the application under section 154 was deemed appropriate as rectifying the details would amount to revising the particulars submitted by the assessee.

4. Upon review, it was observed that the department had accepted the FBT figure declared by the assessee. The assessing officer was not at fault as the figure provided by the assessee was acknowledged. Any mistake in the income return, including FBT miscalculations, could have been rectified by filing a revised return as per the Income Tax Act. Since the assessee did not take steps to rectify the error through a revised return, the responsibility for the error lay with the assessee. Consequently, the Learned CIT(A) rightly dismissed the appeal, holding the assessee accountable for their actions.

5. The appeal of the assessee was ultimately dismissed, upholding the decision of the Learned CIT(A) to reject the application under section 154. The judgment emphasized the importance of timely rectification of errors in tax filings and the responsibility of the taxpayer to ensure accuracy in their returns.