2024 (3) TMI 424 - AT - Income Tax

Rectification u/s. 154 - claim of the assessee that the CPC, Bengaluru in the intimation issued u/s. 143(1) had wrongly taken its income under the head Profit and gains from the business or profession at Rs. 35,09,675/- instead of Rs. Nil and raised a consequential demand towards tax and interest(s) u/ss. 234B and 234C - HELD THAT - Admittedly, the assessee firm had revised its return of income on 03.09.2011 declaring an income. As is discernible from record, the CPC, Bengaluru vide intimation u/s. 143(1) of the Act dated 24.02.2012 had accepted the income disclosed by the assessee firm in its revised return of income. Considering the fact that the assessee firm had itself filed its return of income (revised) declaring an income we are unable to comprehend as to on what basis the acceptance of the said returned income by CPC, Bengaluru could be held as suffering from a mistake apparent from record rendering the same amenable for rectification u/s. 154 of the Act. As observed by the CIT(Appeals), and rightly so, as intimation issued by the CPC, Bengaluru was based on the revised return of income filed by the assessee firm, and no adjustment had been carried out, therefore, the A.O in absence of any mistake apparent from record had rightly rejected its application u/s. 154 - Appeal of the assessee is dismissed

Summary

Issues involved:
The issues involved in the present appeal are the rejection of rectification application filed by the appellant under Sec. 154, assessment of total income by the AO, confirmation of AO's action by CIT(A), and the legality of the order passed after the expiry of the limitation period.

Rectification Application Rejection:
The appellant firm filed a rectification application under Sec. 154, contending that the CPC wrongly calculated its income under "Profit and gains from the business or profession." The AO rejected the application stating that the mistake was not apparent from the record and directed the appellant to pay tax within 7 days.

Assessment of Total Income:
The appellant initially declared a net taxable income of Rs. 39,44,780/-, which was later revised to Rs. 74,54,460/-. The AO assessed the total income at Rs. 74,54,460/- instead of the original declaration. The CIT(A) upheld this assessment, stating that no mistake was apparent from the record as the CPC had processed the returned income as disclosed by the appellant.

Legality of Order Passed:
The appellant raised an alternative ground challenging the legality of the order passed under Sec. 154 after the expiry of the limitation period. The CIT(A) found that the application itself was made after the limitation period, thus justifying the rejection of the application under Sec. 154.

The appellant argued that a technical error led to double taxation on the profit from the sale of land, as the net profit from the sale was wrongly included in the revised income. The appellant contended that this mistake was glaring and apparent, warranting rectification under Sec. 154. However, the authorities upheld the original assessment, stating that as the CPC had accepted the revised income declared by the appellant, no rectification was necessary.

Considering the facts and contentions presented, the Tribunal found no basis to rectify the accepted income as declared by the appellant. Upholding the decision of the lower authorities, the Tribunal dismissed the appeal. The order was pronounced on the 7th day of March, 2024.