Sushrutha Hospital, Kakinada V. The ITO, Kakinada

ITA 290/VIZ/2016

• Counselvise Citation: [2016] 130 COUNSELVISE.COM (IT) 9637 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 20-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAVI SHANKAR NARAYANA
• Keywords: Rectification of order; Bonafide mistake; Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 143(1); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM SMC BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER ITA NO. 290 / VIZ /201 6 (ASST. YEAR : 20 07 - 0 8 ) SUSHRUTHA HOSPITAL, D.NO. 44 - 212, VALASAPAKALA, KAKINADA, E.G. DISTRICT. VS. ITO, WARD - 1, KAKINADA. PAN NO. AAYFS 2136 H (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI ADV. DEPARTMENT BY : SHRI RAVI SHANKAR NARAYANA - DR DATE OF HEARING : 2 0 / 1 2 /201 6 . DATE OF PRONOUNCEMENT : 23 / 12 /201 6 . O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 2 , VISAKHAPATNAM , DATED 11 /0 3 /201 6 FOR THE ASSESSMENT YEAR 200 7 - 0 8 . 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE FIRM HAD FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 1,29,848/ - . RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) AND A DEMAND OF RS. 49,329/ - WAS RAISED ON 25/06/2008 . SUBSEQUENTLY , THE ASSESSEE FILED A PETITION UNDER SECTION 154 OF THE ACT ON 28/07/2008 STATING THAT THE TAXABLE INCOME WAS ONLY RS. 22,845/ - AFTER CLAIMING DEDUCTION TOWARDS REMUNERATION TO THE PARTNERS OF RS. 1,07,000/ - AND REQUESTED TO RECTIFY THE MISTAKE UNDER SECTION 154 OF THE ACT. THE ASSESSING 2 ITA NO. 290 / VIZ /201 6 OFFICER , NOTED IN HIS ORDER THAT THE FIRM ITSELF HAD DECL A RED ITS TOTAL INCOME AT RS. 1,29,848/ - AND THE SAME WAS CONSIDERED FOR PROCESSING UNDER SECTION 143(1) , HENCE, THERE WAS NO MISTAKE APPARENT ON RECORD AND REJECTED THE PETITION FILED BY THE ASSESSEE. 3 . ON APPEAL , COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ORDER OF THE ASSESSING OFFICER . 4 . ON BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. 5. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED TH A T THE ASSESSEE FILED A RETURN OF INCOME BY DECLARING TOTAL INCOME OF RS. 1,29,848/ - , HOWEVER, IN THE RETURN OF INCOME FILED, THE ASSESSEE BY MISTAKE THE AMOUNT PAID TO THE PARTNERS HAS NOT CONSIDERED. THE ASSESSEE DREW OUR ATTENTION AT PAGE NO. 2 OF THE PAPER BOOK AND S UBMITTED THAT IN THE STATEMENT OF THE CASE , ASSESSEE HAS CALCULATED THE TAX PAYABLE OF RS.6,855/ - AFTER DEDUCTING THE REMUNERATION PAID TO THE PARTNERS. THEREFORE, HE SUBMITTED THAT THE ASSESSEE COMMITTED A BONAFIDE MISTAKE, HENCE SAME MAY BE RECTIFIED . HE ALSO SUBMITTED TH A T AS PER SECTION 154, THE RECTIFICATION ORDER CAN BE PASSED NOT ONLY ON ACCOUNT OF MISTAKE COMMITTED BY THE ASSESSING OFFICER BUT ALSO THE ASSESSEE . HE PLACED RELIANCE ON THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE 3 ITA NO. 290 / VIZ /201 6 CASE OF PAW AN KUMAR AGGARWAL V. CIT REPORTED IN (2014) 89 CCH 52 (DEL. HC). 6 . ON THE OTHER HAND, DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HIMSELF HAD DISCLOSED HIS TOTAL INCOME OF RS. 1,29,848/ - , THE SAME HAS BEEN ACCEPTED BY THE ASSESSING OFFICER, AND T HEREFORE, THE ASSESSING OFFICER HAS NOT COMMITTED ANY MISTAKE AND THE ORDER PASSED UNDER SECTION 143(1) IS A MERE INTIMATION, IT CANNOT BE RECTIFIED . 7. I HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW . 8 . THE ASSESSEE FILED A RETURN OF INCOME BY DECLARING TOTAL INCOME OF RS. 1,29,848/ - . THE ASSESSEE HAS ATTACHED THE STATEMENT OF THE CASE ALONG WITH ACKNOWLEDGMENT FILED BEFORE THE ASSESSING OFFICER ON 31/03/2008, WHEREIN HE CALCULATED THE TAXABLE INCOME OF RS. 6,855/ - AFTER DEDUCTING REMUNERATION PAYABLE TO THE PARTNERS. IN THE RETURN OF INCOME, THE ASSESSEE HAS NOT D EDUCTED THE AMOUNT PAID TO THE PARTNERS. I FIND THAT THE ASSESSEE HAS COMMITTED A BONAFIDE MISTAKE WHILE FILING THE RETURN OF INCOME, T HEREFORE, ONCE ASSESSEE HAS COMMITTED A BONAFIDE MISTAKE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN REJECTING THE PETITION FILED UNDER SECTION 154 OF THE ACT. THE HON'BLE DELHI HIGH COURT IN THE CASE OF PAWAN KUMAR AGGARWAL (SUPRA) HAS CONSIDERED THE SECTION 154 AND HELD THAT AT ANY STAGE OF THE 4 ITA NO. 290 / VIZ /201 6 PROCEED INGS, THE RECTIFICATION UNDER SECTION 154 IS POSSIBLE IN CASE MISTAKE COMMITTED BY THE PARTIES INCLUDING ASSESSING OFFICER ALSO. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED HEREUNDER: - SECTION 154 SHOWS THAT THE POWER OF RECTIFICATION EXTENDS TO AMENDMENT OF AN INTIMATION OR DEEMED INTIMATION UNDER SECTION 143. THIS POWER ENS URE EVEN AFTER 'THE MATTER' HAS BEEN CONSIDERED AND DECIDED IN ANY PROCEEDING BY WAY OF APPEAL OR REVISION. NECESS ARILY, THIS POWER EXTENDS EVEN AT THE STAGE OF THE APPEAL AND THE FURTHER APPEAL TO THE ITAT. EVEN AFTER SUCH DECISION, IT IS OPEN TO THE AO TO AMEND THE INTIMATION UNDER SECTION 143 (1) IF THE CIRCUMSTANCES SO WARRANT. THE TECHNICALITIES IN THE GIVEN CIRC UMSTANCES OF THE CASE OUGHT NOT TO OBSCURE THE JUSTICE. THE JUSTICE DEMANDS, IN THE PECULIAR FACTS OF THE CASE, THAT THERE IS NO IMPEDIMENT TO RELIEF. THAT APPEARS TO HAVE BEEN OVERLOOKED IN ENTIRETY BY THE LOWER AUTHORITIES AND THE TRIBUNAL HAD FAILED TO NOTICE THAT THE CONTROLLING EXPRESSION IN SECT/ON 154 IS NOT 'AN ERROR' WHICH IS SOMEWHAT COLOURED BY THE EXERCISE OF POWER BY THE AUTHORITIES. INSTEAD, THE CONTROLLING EXPRESSION IS 'ANY MISTAKE' WHICH HAS WIDER CONNOTATION AND INCLUDES MISTAKES COMMITTED BY THE PARTIES ALSO. IMPUGNED ORDER SET ASIDE. 9 . IN VIEW OF THE ABOVE, I REVERSE THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) AND DIRECT THE ASSESSING OFFICER TO CONSIDER THE RECTIFICATION APPLICATION FILED BY THE ASSESSEE. ORDER ACCOR DINGLY. 10 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD DAY OF DECEMBER , 201 6 . SD/ - ( V. DURGA RAO ) JUDICIAL MEMBER DATED : 23 RD DECEMBER , 201 6 . VR/ - 5 ITA NO. 290 / VIZ /201 6 COPY TO: 1 . THE ASSESSEE SUSHRUTHA HOSPITAL, D.NO. 44 - 212, VALASAPAKALA, KAKINADA, E.G. DISTRICT. 2 . THE REVENUE ITO, WARD - 1, KAKINADA. 3 . THE PR. CIT, KAKINADA . 4 . THE CIT - 2, VISAKHAPATNAM. 5 . THE CIT(A) - 2, VISAKHAPATNAM . 6 . THE D.R . 7 . GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY, I.T.A.T., VISAKHAPATNAM