2019 (7) TMI 353 - AT - Income Tax

Rectification u/s. 254(2) - computation of income filed with the return of income does not reflect the exact amount of suo motu disallowance made by the assessee in the return of income itself - HELD THAT - The impugned amount has already suffered disallowance at the time of filing of return by way of suo motu action, is required to be corroborated on the basis of material on record. Since at this stage, in terms of the limited jurisdiction available with us in terms of section 254(2) of the Act, only apparent mistakes can be corrected, we deem it fit and proper to direct the Assessing Officer to verify this aspect of the matter. The assessee is required to satisfy the Assessing Officer that the impugned sum of ₹ 1,05,47,651/- was disallowed suo motu in the return of income. In case the assessee is able to satisfy the Assessing Officer, no further disallowance would be warranted. So, however, if the Assessing Officer is of the contrary view, he shall be free to pass an order on this limited aspect afresh as per law. Miscellaneous Application has been disposed of as partly allowed.

Summary

Issues:
Recall of Tribunal order for disallowance of a specific amount in the computation of income filed by the Revenue for A.Y. 2008-09.

Analysis:
The Appellate Tribunal received a Miscellaneous Application from the Revenue seeking to recall the order dated 13.07.2016 in relation to the disallowance of a specific amount of &8377; 1,05,47,651 for A.Y. 2008-09. The Revenue contended that the disallowance was deleted based on the assessee's claim that it was part of a suo motu disallowance made in the return of income. However, the Revenue argued that the computation of income filed did not reflect this disallowance amount accurately, indicating an error in the Tribunal's order.

During the proceedings, the assessee's representative maintained that the statement made during the appeal hearing was factually correct, asserting that there was no mistake. The Tribunal, after considering the submissions from both sides, concluded that the claim of the assessee regarding the disallowed amount being part of the suo motu action needed verification based on the available records. As per the limited jurisdiction under section 254(2) of the Act, the Tribunal directed the Assessing Officer to examine whether the disallowed sum was indeed part of the return of income's suo motu disallowance. The Tribunal emphasized that if the assessee could demonstrate this to the Assessing Officer, no further disallowance would be necessary; however, if the Assessing Officer disagreed, they were free to make a fresh order on this specific issue in accordance with the law.

Consequently, the Tribunal partially allowed the Miscellaneous Application, instructing the Assessing Officer to investigate the matter further and make a decision based on the verification of the disallowance claimed by the assessee. The order was dictated and pronounced in court on 28th June 2019 in the presence of both parties.