9911796707
TMI Blog2023 (12) TMI 341X X X X Extracts X X X X X X X X Extracts X X X X ..... exempt upto Rs. 10 lakhs under section 10(34) - The assessee has claimed to have earned dividend income from mutual fund which are exempt u/s 10(35) of the Act. Evidence to this effect was also filed by way of statement of Mutual Fund. The assessee had clearly demonstrated the inapplicability of section 115BBDA of the Act to the facts of her case. In the light of the same the Ld.CIT(A) s order upholding the rejection of her application seeking rectification to this effect is clearly untenable more particularly since we find that the Ld.CIT(A) has not even cared to deal with the contention of the assessee before upholding the order of CPC . Thus we hold, the rectification application filed by the assessee needs to be allowed. In vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d which is exempt u/s. 10(35) of I T Act. 3. In law and in the facts and circumstances of the Appellant case, the learned Commissioner of Income-tax (Appeals) has grossly erred in confirming the addition of Rs 50,65,550, though in the intimation u/s. 143(1) dt 23rd January 2019 this income was considered as exempt and income was assessed for Rs Nil which was returned income. 4. In law and in the facts and circumstances of the Appellant case, the learned Commissioner of Income-tax (Appeals) has grossly erred in confirming the addition of Rs 50,65,550 though original intimation u/s 143(1) was passed on 23rd January 2019 accepting returned income of Rs Nil. Later on, rectification order was passed u/s 154 of I T Act on 27th June 2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of which the assessee had sought rectification. My reasons for holding so follow. But before proceeding with the reasons, I shall first bring out necessary facts relating to the issue. 5. The order of the CPC u/s 154 of the Act against which the assessee had moved the rectification application first needs to be considered so as to understand the rectification sought by the assessee which was denied . The same was placed before me at PB Page No.7 to 10, but for the purpose of adjudication of issue before me, the computation of income in the rectification order of the CPC is only relevant, which is placed at PB Page No.7 8 before us and is reproduced hereunder: 6. As is clear from the above, the assessee had filed retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 154 of the Act, the income ought to have been Rs. 37,796/- only. 8. The computation of income under section 154 of the Act by the CPC at Rs. 41,03,348/- is clearly a patent mistake and the assessee s rectification application therefore against this order u/s 154 of the Act passed by the CPC, I hold, ought to have been entertained and allowed. 9. Be that so, the ld.counsel for the assessee has pointed out that this intimation under section 154 of the Act was made by the AO computing the assessee s income (though incorrectly) at Rs. 40,65,552/-, without even giving opportunity of hearing to the assessee; that no notice was given to the assessee prior to the passing of this order computing the assessee s income under section 154 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l rate under section 115BBDA at the rate of 10%. That the assessee having not earned dividend exempt u/s 10(34) of the Act, therefore the invocation of section 115BBDA of the Act to the dividend income earned by the assessee was a mistake needing rectification. 13. The ld.CIT(A) however, without dealing with the contention of the assessee upheld the rejectionof the rectification application of the assessee by the CPC, thus confirming the addition made by the AO. 14. I have gone through the relevant provisions of law and I find merit in the contention of the assessee. For clarity the provisions of section 115BBDA, 10(34) and 10(35) of the Act are reproduced hereunder: 115BBDA. (1) Notwithstanding anything contained in this Act, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12AB. (35) any income by way of, (a) income received in respect of the units of a Mutual Fund specified under clause (23D); or (b) income received in respect of units from the Administrator of the specified undertaking; or (c) income received in respect of units from the specified company: Provided that this clause shall not apply to any income arising from transfer of units of the Administrator of the specified undertaking or of the specified company or of a mutual fund, as the case may be: 15. It is clear from a bare reading of the above provisions that section 115BBDA of the Act levies special rate of tax only on dividend income earned from domestic companies if exceeding Rs. 10 lakhs. This dividend ..... X X X X Extracts X X X X X X X X Extracts X X X X
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