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TMI Blog2020 (7) TMI 214X X X X Extracts X X X X X X X X Extracts X X X X ..... y by virtue of the property being ancestral and put into the common hotchpotch of the family. Under the circumstances, the issue being highly debatable and requires lengthy arguments. It is a settled law that powers of the AO to rectify an order u/s 154 are very limited and can be exercised only in a case where the AO finds that a mistake apparent on record had occurred - in the case of a debatable issue or where the lengthy arguments are needed to decide the issue, powers u/s 154 of the Act can not be exercised to amend an already passed order - powers u/s 154 of the Act cannot be exercised on change of opinion by the Assessing Officer on an issue relating to any admissibility of a claim. AO thus, in our view was, not justified in passing the impugned order u/s 154 of the Act with limited jurisdiction of rectification of order in the case of a mistake apparent on record in the order. Rectification order cannot be held to be justified. - Decided in favour of assessee. - ITA No.43/CHD/2019 - - - Dated:- 6-7-2020 - Shri N.K. Saini, Vice President And Shri Sanjay Garg, Judicial Member For the Assessee : Shri Ashwani Kumar, CA For the Revenue : Smt. Geetinder Mann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of transfer expenses / improvement cost, however, accepted the claim of deduction u/s 54B of the Income Tax Act. Later on, the AO vide order dated 5.7.2017 passed u/s 154 of the Act rejected the claim of deduction of the assessee u/s 54B of the Act observing that the assessee being 'HUF' was not entitled to claim of deduction u/s 54B of the Act on account of reinvestment made in purchase of agricultural land as the same for the assessment year under consideration i.e. assessment year 2012-13 was not available to an 'HUF'. As per the provisions of section 54B of the Act, as applicable for A.Y. 2012-13, where the capital gain arises to an assessee from transfer of a capital asset being land, which, in the two years immediately preceding the date on which transfer took place, was being used by the assessee or a parent of his for agricultural purpose and the assessee has, within a period of two years after that date, purchased any other land for being used for agricultural purposes, then, the deduction provided u/s 54B of the Act is available to such an assessee. However, for the assessment year 2013-14 onwards vide Finance Act, 2012 w.e.f. 1.4.2013, the 'HU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Assessing Officer in the scrutiny assessment proceedings carried out u/s 143(3) of the Act and he after considering the claim of the assessee had allowed the same making some disallowances out of the impugned expenses etc. It is not a case where the Assessing Officer had not applied his mind to the issue under consideration. However, later on, the Assessing Officer confirmed the view that the deduction was not allowable to an 'HUF' for the assessment year 2012-13 as the same has been made available to a 'HUF' by Finance Act 2012 w.e.f. 1.4.2013. He, therefore, held that a mistake apparent on record had occurred in the assessment order dated 17.3.2015 passed u/s 143(3) of the Act. However, we find from the provisions of section 54B of the Act, as applicable for assessment year 2012-13, that the same are loosely worded. The relevant part of the said provisions is reproduced as under:- Capital gain on transfer of land used for agricultural purposes not to be charged in certain cases. 54B. [(1)] [Subject to the provisions of sub-section (2), where the capital gain arises] from the transfer of a capital asset being land which, in the two years immedia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idual or an 'HUF' also. Moreover, as per amended provisions deduction is available to the assessee if the land is used for agricultural purposes by the assessee himself or by his parent or an 'HUF'. What is noted is that amendment has been carried out in respect of user of the land not in respect of the claimant / assessee whose income is assessed. It is also a well-known fact that in the land record maintained by the Land Revenue Department, ownership of property is entered in the name of an individual and not in the name of 'HUF' and that the 'HUF' claim of ownership over such a property by virtue of the property being ancestral and put into the common hotchpotch of the family. Under the circumstances, the issue being highly debatable and requires lengthy arguments. It is a settled law that powers of the Assessing Officer to rectify an order u/s 154 are very limited and can be exercised only in a case where the Assessing Officer finds that a mistake apparent on record had occurred. However, in the case of a debatable issue or where the lengthy arguments are needed to decide the issue, powers u/s 154 of the Act can not be exercised to amend a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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