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2021 (7) TMI 41 - AT - Income TaxRectification u/s 154 - mistake which has crept in the order framed under section 143(3) read with section 147 - HELD THAT - CIT(A) has quashed the rectification order dated 6.4.2016 passed under section 154 of the Act by the AO on the ground that on the date of rectification the appeal of the assessee filed against the order of the AO u/s 143(3) r.w.s. 147 of the Act was pending wherein the addition of bogus purchases was challenged. Therefore the AO has exceeded his jurisdiction u/s 154 . CIT(A) quashed this order by holding that the AO has no power to rectify the order which is sub-judice before the Ld. CIT(A). Therefore, we do not find any infirmity in the order of Ld. CIT(A) as the order passed under section 154 of the Act is without valid jurisdiction and AO has obviously exceeded the jurisdiction. Accordingly, ground No.2 raised by the Revenue is dismissed.
Issues involved:
1. Validity of rectification order under section 154 of the IT Act. 2. Jurisdiction of the Assessing Officer in passing rectification orders when the matter is sub-judice. Analysis: 1. The appeal by the Revenue was against the order of the Commissioner of Income Tax (Appeals) relevant to assessment year 2009-10. The issue raised in ground No.2 was regarding the rectification order passed under section 154 of the Act by the Assessing Officer (AO) to rectify a mistake in the original assessment order. The AO had added amounts for alleged bogus purchases and depreciation claimed by the assessee. The AO issued a notice under section 154 to rectify the mistake, which the assessee objected to as the matter was sub-judice before the CIT(A). The CIT(A) allowed the appeal of the assessee, stating that the AO exceeded jurisdiction by passing the rectification order when the appeal against the original order was pending. 2. In the appellate proceedings, the CIT(A) held that the rectification order passed by the AO under section 154 was invalid as the appeal against the original assessment order was pending. The CIT(A) emphasized that the AO's attempt to change the basis of addition from profit element to depreciation in the rectification order indicated a change in opinion, which was impermissible under section 154. The CIT(A) concluded that the AO had exceeded jurisdiction by making changes to the assessment order while the matter was sub-judice. The ITAT upheld the CIT(A)'s decision, dismissing the Revenue's appeal as the rectification order was deemed to lack valid jurisdiction. 3. The ITAT's decision highlighted that the AO's actions in passing the rectification order under section 154 were without valid jurisdiction as the matter was already under appeal before the CIT(A). By quashing the rectification order, the CIT(A) was found to have correctly determined that the AO had overstepped his authority in making changes to the assessment order while the appeal was pending. Consequently, the ITAT upheld the CIT(A)'s decision, leading to the dismissal of the Revenue's appeal. In conclusion, the ITAT affirmed the CIT(A)'s decision to quash the rectification order under section 154 of the IT Act, emphasizing the importance of jurisdictional limitations on the Assessing Officer's powers when matters are sub-judice.
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