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TMI Blog2022 (12) TMI 232X X X X Extracts X X X X X X X X Extracts X X X X ..... g the previous year as per clause (2) of the Explanation to section 11(1). Further, an amount of Rs. 56,18,790/- claimed as amount accumulated or set apart for application to charitable or religious purposes to the extent as is not exceed 15% of income derived from property held under trust under section 11(1)(a) was also not allowed as deduction. An application under section 154 was filed which was rejected. While rejecting the application under section 154, the Assessing Officer observed as under: "The demand was outstanding as assessee neither claimed exemption u/s 11 and 12 nor claimed any other basic exemption benefits as shown in "Col No. B, C, and D" of other details of ITR at page 1 and 2 for Assessment Year 2013-14. In view of the above all and on verification from the 1TD System and also on perusal from the . 7R filed by assessee, it is seen that there is no error found in the order of the CPC which assessee have sought to be rectified. It is also observed that assessee itself offered the income for taxation in the ITR filed and did not claim the benefit of exemption u/s 11 & 12 of the Act vide scheduled Part-B of ITR and from the acknowledgement of ITR. Neither the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g exemption under section 11 of the Act for the last many years and also later years. The exemption has been granted to it in various years. Referring to the paper book filed it was submitted that during the year under consideration while filing its return of income, (PB Pg. 21-33), inadvertently the particulars with regard to claim of benefit of registration u/s 12AA under the Act, in point B to Part A-GEN (PB Pg. 22) were wrongly filed as NO. Resultantly the exemption of Rs. 3,74,58,598/- intended to be claimed by the assessee (PB. Pg. 34), was not allowed to it by the CPC. An assessment at an amount of Rs. 3,74,58,598/- was made by CPC u/s 143(1) of the Act. (Pg. 2 of CPC order). 7. It was submitted that on receiving frequent demand notices, on apprising by the assessee, CPC duly took cognizance of the grievance of the assessee and in its demand notice dt. 13.08.2019 (PB Pg. 38-40), asked assessee to upload certain documents in relation to registration under section 12A of the Act and allowance of exemption under section 11 (PB Pg. 40). The assessee tried to comply the same, however the CPC Portal having been closed, the documents could not be uploaded. Thereafter the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. DR submitted that there is no error in the findings of Ld. Tax authorities below. It was submitted that in Return as filed exemption was not claimed so same could not be allowed by way of rectification. 11. Giving thoughtful consideration to the matter on record and submission it will be necessary to understand as to what is the scope of rectification of Mistakes under Section 154 of the Act and to if Ld. AO was justified to dismiss application on basis that mistake of not marking claim of benefit of registration u/s 12A under the Act, in point B to Part A-GEN was not a mistake apparent from record and liable to be entertained. 12. In this context it can be observed that the scope and ambit of power of rectification came to be considered and decided by the Supreme Court in T. S. Balaram, ITO v. Volkart Brothers [1971] 82 ITR 50. It was held in that case that the power of rectification of mistakes under section 154 of the Act is a very limited power which is restricted to rectification of mistakes apparent from the record. Besides, it must be a mistake which is patent on the face of the record and does not call for detailed investigation of the facts or require an elaborate a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bserved; "The expression "record" has not been defined in the Act. It has, therefore, to be construed and understood in the context in which it appears. Section 154 empowers the income-tax authorities to rectify mistakes which are "apparent from the record", "Record" in such a case would mean record of the case comprising the entire proceedings including documents and materials produced by the parties and taken on record by the authorities which were available at the time of passing of the order which is the subject-matter of proceedings for rectification. They cannot go beyond the records and look into fresh evidence or materials which were not on record at the time the order sought to be rectified was passed (see Sri Pankaj Kumar Dasgupta v. State of Tripura [1990] 79 STC 409 (Gauhati). 16. Hon"ble Madras High Court in Commissioner Of Income-Tax vs M.R.M. Plantations (P.) Ltd. 1999 240 ITR 660 Mad, dealing with question as to the scope of the "record" occurring in Section 154 of the Income-tax Act, 1961 has observed: "Section 154 of the Act opens with the words "with a view to rectifying any mistake apparent from the record . . ." The term "record" as noticed earlier is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand is that the mistake was in the Part A of the return which calls for personal information of the assessee. Assessee was supposed to submit "YES" in the column in point B to Part A-GEN of the Return (page 22 of PB), meant to disclose date of approval/ registrations etc, to claim of benefit of exemption u/s 10 read with 12A of the Act. It seems that mistakenly "NO" was mentioned by the assessee and relevant information about registration etc. was shown as "NO". 19. However, in Part B of the return (page 23 of PB) under the head statement of income for the period ended on 31/3/2013 income from other sources is shown at Rs 3,74,58,598/- and in deductions at relevant places amount applied for charitable/ religious places and amount accumulated or set apart have been disclosed, with total deduction claim shown at Rs 3,74,58,598/-. 20. At the same time in computation of income, which was part of the Return, as available at Page no 34 of PB, Amount applied to charitable purposes, amount deemed to be applied and accumulated amount has been shown at Rs 3,74,58,598/- and accordingly Gross Total Income is shown as NIL. 21. Further, the matter of fact is that the CPC while considering t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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