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TMI Blog2014 (9) TMI 490X X X X Extracts X X X X X X X X Extracts X X X X ..... nt - the issue dealt by the AO in the rectification order u/s. 154 of the Act cannot be said to be a mistake apparent from record as it was arrived after due application of mind – thus, there is no mistake apparent on record in the earlier order of the AO so as to take up the issues in the proceedings u/s 154 of the Act – the order of the CIT(A) is set aside – Decided in favour of assessee. - I.T.A. No. 215/Coch/2007 - - - Dated:- 5-9-2014 - Shri N. R. S. Ganesan, JM And Chandra Poojari,JJ. For the Petitioner : Shri N. S. Rajagopal, CA For the Respondent : Shri K. K. John, Sr. DR ORDER Per Chandra Poojari, Accountant Member: This appeal filed by the assessee is directed against the order dated 08- 12-2006 passed by the Ld. CIT(A),Trivandrum for the assessment year 1985- 86. 2. The brief facts of the assessee are that the assessment for the assessment year 1985-86 was originally completed u/s. 143(3) on 28/03/1988 which was set aside by the CIT(A) vide order dated 24-11-1988. The set aside assessment was subsequently completed on 22-03-1991. In the meantime, it was stated that an application u/s. 245C of the Income Tax Act was filed before the Additional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 4. Regarding withdrawal of interest already granted u/s. 244(1A), the CIT(A) observed that u/s. 244(1A), interest is to be granted if the whole or in part of the refund referred to in sub-section (1) of sec. 244 is due to the assessee as a result of any amount having been paid by him after the 31st day of March, 1975 in pursuance of any order of assessment or penalty and such amount or any part thereof having been found in appeal or other proceedings under this Act be in excess of the amount with such assessee is liable to pay as tax or penalty as the case may be under the Act. To be entitled to interest u/s. 244(1A) of the I.T. Act, the assessee must be entitled to refund. However, in this case, the CIT(A) observed that assessee is not entitled to any refund. In the case of the order u/s. 154 of the I.T. Act, the assessee was required to pay additional demand with reference to the tax and interest calculated vis- -vis the payment made by him as tax. Hence, the CIT(A) confirmed the disallowance of interest u/s. 244(1A) of the Act made by the Assessing officer. Against this, the assessee is in appeal before us. 5. The Ld. AR submitted that interest u/s. 220(2) was not levia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guage of the section do not authorize for any reduction or withdrawal as in interest u/s. 244A sub-section (3). The Ld. AR relied on the following decisions in support of the above proposition: (a) Cibatul Ltd. vs. IAC (201 ITR 507) (Guj.). (b) CIT vs. Leader Values (P) Ltd. (Asr.) 100 TTJ 913 (c) V.M. Salgaonkar Bros. (P) Ltd. vs. ITO (Bang.) 52 TTJ 218. 7. The Ld. AR submitted that it is a debatable issue and hence resort cannot be made to sec. 154. According to the Ld. AR no notice given to the assessee in respect of the action to withdraw the interest already granted under section 244(1A) and notice u/s. 154 dated 09/06/2005 is silent on this point. 8. With regard to enhancement of interest u/s. 2454D(6A), the Ld. AR submitted that interest u/s. 245D(6) amounting to ₹ 41499/- was levied in the proceeding dated 14-08-2003 which has been enhanced to ₹ 79355/- after rectification u/s. 154. According to the Ld. AR this is not an issue for which notice has been given to the assessee which is against the provisions of sec. 154(3) of the Act. There is no change in the total income or tax payable and hence the recomputtion of interest u/s. 245D(6A) at ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re omitted to be charged. Even though levy of this interest u/s. 220(2) and 245D(6A) is mandatory, still the Assessing officer issued notice u/s. 154 to the assessee. According to the Ld. DR after levy of the above interest, there was no refund payable to the assessee. 16. The Ld. DR submitted that this was further rectified on 27/09/2006 on application of the assessee that interest u/s. 220(2) was charged from April 1998 and should have been charged only from April 1991 which was duly accepted by the Assessing officer. 17. Regarding withdrawal of interest already granted u/s. 244(1A) by an order u/s. 154, the Ld. DR submitted that for granting of interest u/s. 244(1A), the foremost condition is that there should be a refund in the first instance. In this case, according to the Ld. DR, after levy of interest u/s. 220(2) and 245D(6A), there was demand and hence the assessee was not eligible for interest u/s. 244(1A). 18. In view of the above facts, the Ld. DR submitted that the rectification order passed by the Assessing officer is perfectly valid and the interest u/s. 220(2), 245D(6A) and 244(1A) have been correctly dealt with by the Assessing officer and therefore, the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te by means of rectification proceedings u/s. 154 of the Act, unless it can be said that there is a blatant and apparent mistake that has crept in, in the order of the Assessing officer, purely based on material facts on record. In the garb of an application for rectification, it is not open to the Assessing officer to seek re-opening of the order of the Assessing officer by re-arguing the whole matter. Unless there is a manifest error which is obvious, clear and is evident, the provisions of sec. 154 of the Act cannot be resorted to. What can be rectified u/s. 154 of the Act is a mistake which is apparent and patent. The mistake has to be such for which no elaborate reasons or enquiry is necessary. What is not permitted to be done by the Statute having been deliberately omitted to confer review jurisdiction on the Assessing officer, cannot be indirectly achieved by recourse to rectification u/s. 154 of the Act. When an error was far from self-evident, it ceases to be apparent error. The so called inaccuracies or wrong calculation or wrong levy of interest in the original assessment order so as to charge interest u/s. 220(2), 245D(6A) and withdrawal of interest under sec. 244(1A) w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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