2021 (12) TMI 927 - AT - Income Tax

Revision u/s 263 by CIT - Assessments passed u/s.201(1) and 201(1A) in incorrect name of assessee - Name of the assessee has been mentioned inadvertently as - M/s Vodafone South Limited (VSL - Hyd) instead of mentioning the name of the assessee as M/s.Vodafone Mobile Services Limited. - HELD THAT - PCIT s detailed discussion in issue before us has itself acknowledged that the Assessing Officer had passed the necessary corrigendum dt.22-01-2018 rectifying the name of the assessee-company from M/s.Vodafone South Ltd., (VSL-Hyd) to M/s.Vodafone Mobile Services Limited. There could hardly be any dispute that such corrigendum forming part of the PCIT s discussion in para 2.2 dates back to the main orders as on 27-02-2017 only. This tribunal s common order in assessee s corresponding quantum appeals 2018 (5) TMI 2104 - ITAT HYDERABAD has rejected the assessee s corresponding pleas as well. Once learned PCIT s revision directions in view of the issue, treat the alleged error committed by the Assessing Officer in incorporating the foregoing name to be only clerical and rectifiable in nature we fail to understand in this clinching factual backdrop as to how the impugned assessment/order(s) passed by the Assessing Officer could be erroneous ones, causing prejudice to the interest of Revenue; simultaneously as held in Malabar Industrial Co. Vs. CIT 2000 (2) TMI 10 - SUPREME COURT - PCIT has nowhere concluded that the Assessing Officer s orders in issue attract assumption of Section 263 revision jurisdiction in the given facts after the assessing authority had issued corrigendum and the same involved only a clerical mistake; as the case may be (supra). We thus conclude that the PCIT herein has erred in law and facts in invoking his Section 263 revision jurisdiction - Decided in favour of assessee.

Summary

Issues Involved:
1. Erroneous Orders under Section 201(1) and 201(1A) of the Income Tax Act, 1961.
2. Prejudice to the Interest of Revenue.
3. Clerical Error in the Name of the Assessee.
4. Jurisdiction under Section 263 of the Income Tax Act, 1961.

Issue-Wise Detailed Analysis:

1. Erroneous Orders under Section 201(1) and 201(1A) of the Income Tax Act, 1961:
The PCIT identified that the orders under Section 201(1) and 201(1A) for the Assessment Years 2015-16 and 2016-17 mentioned the wrong name of the assessee, "M/s Vodafone South Limited (VSL - Hyd)" instead of "M/s Vodafone Mobile Services Limited." This error was deemed prejudicial to the interest of revenue, necessitating a revision under Section 263 of the Income Tax Act, 1961.

2. Prejudice to the Interest of Revenue:
The PCIT, after reviewing the proposals from the Assessing Officer and the JCIT, concluded that the erroneous mention of the assessee's name in the orders was prejudicial to the interest of revenue. The substantial demand involved for both assessment years (?2,09,61,635 for AY 2015-16 and ?3,84,16,393 for AY 2016-17) further justified the need for revision to protect the revenue's interest.

3. Clerical Error in the Name of the Assessee:
The Assessing Officer acknowledged the clerical error and issued a corrigendum on 22-01-2018 to rectify the name of the company to "M/s Vodafone Mobile Services Limited." The ITAT noted that the corrigendum dated back to the original orders of 27-02-2017, indicating that the error was clerical and rectifiable under Section 292B of the Income Tax Act. The ITAT referenced the Supreme Court's decision in Skylight Hospitality LLP Vs. ACIT, which held that such clerical errors could be corrected.

4. Jurisdiction under Section 263 of the Income Tax Act, 1961:
The PCIT invoked Section 263, which allows for the revision of orders that are erroneous and prejudicial to the interest of revenue. However, the ITAT concluded that the PCIT's directions were not justified, as the error was clerical and had been rectified. The ITAT emphasized that the PCIT did not establish that the Assessing Officer's orders were erroneous in a manner that caused prejudice to the revenue after the corrigendum was issued. The ITAT cited the Supreme Court's ruling in Malabar Industrial Co. Vs. CIT, which requires both error and prejudice to the revenue for invoking Section 263.

Conclusion:
The ITAT found that the PCIT erred in invoking Section 263 revision jurisdiction, as the clerical error had been rectified, and the orders were not prejudicial to the interest of revenue. Consequently, the ITAT reversed the PCIT's common order for both assessment years, allowing the assessee's appeals.

Order:
The assessee's twin appeals are allowed, and the order was pronounced in the open court on 26th November 2021.