Harit Developers, Pune V. Dy. Commissioner Of Income Tax, Circle-8, Pune, Pune

ITA 513/PUN/2022

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The case involves Harit Developers, a partnership firm engaged in real estate, which appealed against the order of the NFAC and the DCIT concerning a rectification application under section 154 of the Income Tax Act. The firm had initially filed a return declaring a total income of \\u20b979,04,150 for the assessment year 2015-16, which was accepted without variation after a regular assessment. However, upon receiving a demand intimation, the firm filed a rectification application to remove an erroneously added interest income of \\u20b940,00,000. Both the DCIT and NFAC rejected this application, leading to the present appeal before the ITAT.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 136322 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 26-12-2022
• Assessment Year: 2015-2016
• Appeal Filed On: 04-07-2022
• Other Referred Cases: ITO Vs Volcart Bros.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 154; 143(3); 250; 143(2)

Judgement Text

॥ आयकर अपीलीय न्यायाधिकरण, पुणे “सी” न्यायपीठ, पुणे में ॥ ITAT-Pune Page 1 of 7 IN THE INCOME TAX APPELLATE TRIBUNAL, PUNE “C” BENCH, PUNE BEFORE HON’BLE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER आयकर अपीलसं. / ITA No. 513/PUN/2022 कर धििाारण वर्ा / Assessment Year :2015-16 Harit Developers, Royal Orange County, S. No. 29/1, 29/2, Behind Fountain INN, Rahatni, Pune-411017 PAN : AAGFH5853C . . . . . . . अपीलाथी / Appellant बिाम / V/s. Deputy Commissioner of Income Tax Circle-8, Pune. . . . . . . .प्रत्यथी / Respondent द्वारा / Appearances Assessee by : None Revenue by : Shri Suhas Kulkarni सुनवाई की तारीख / Date of conclusive Hearing : 27/12/2022 घोषणा की तारीख / Date of Pronouncement : 06/01/2023 आदेश / ORDER PER G. D. PADMAHSHALI, AM; The present appeal is directed against order of National Faceless Appeal Centre, Delhi [for short “NFAC”] dt. 23/05/2022 passed u/s 250 of the Income Tax Act, 1961 [for short “the Act”] which emanated out of order of rectification passed u/s 154 of the Act by the Deputy Commissioner of Income Tax, Circle-8, Pune [for short “AO”] for assessment year [for short “AY”] 2015-16. Harit Developers ITA No.513/PUN/2022 PAN: AAGFH5853C ITAT-Pune Page 2 of 7 2. Pithily stated facts borne out of records are; 2.1 The assessee is a resident partnership firm engaged in the business as promoters, builders and developers, has e-filed its return of income [for short “ITR”] declaring total income of ₹79,04,150/-, which was subjected to limited scrutiny by a notice u/s 143(2) of the Act. During the course of the regular assessment the assessee’s authorised representative [for short “AR”] made detailed submission called for and considering the same, the Ld. AO framed the assessment u/s 143(3) of the Act accepting returned income without variation by an order dt. 07/12/2017. 2.2 Upon the receipt of intimation determining the tax demand, the assessee by an application u/s 154 of the Act dt. 14/05/2019 sought to rectify the charge of interest income of ₹40,00,000/- under the head Income from Other Sources [for short “IOS”]. However finding no force in the contention of the assessee firm that the said amount of interest was wrongly added while filing ITR, the Ld. AO rejected the plea to rectify the same as extra-territorial u/s 154 of the Act. Harit Developers ITA No.513/PUN/2022 PAN: AAGFH5853C ITAT-Pune Page 3 of 7 2.3 Aggrieved by the denial to rectify the total income, the assessee firm taken up the matter before first appellate authority [for short “FAA”], wherein Ld. NFAC echoed the view of its tax authority below [for short “TAB”] and dismissed the appeal. 2.4 The appellant assessee alleging the action of both the Ld. TAB as erroneous brought up the following grounds in the present appeal; “1. The Deputy Commissioner of Income Tax (DCIT) erred in law and in facts of the case in dismissing the appeal and holding that the application for rectification u/s. 154 is not maintainable as the addition of Rs.40,00,000/- is not due to a mistake apparent from record. 2. The Deputy Commissioner of Income Tax (DCIT) erred in law and in facts of the case in holding that the addition of Rs.40,00,000/-, due to software and typographical error, is not a mistake apparent from record. 3. The Deputy Commissioner of Income Tax (DCIT) erred in law and in facts of the case in holding that the appellant had time to file for a revised return on detecting incorrect particulars and that the rectification of incorrect addition of Rs.40,00,000/- due to software and typographical error was not covered by the provision of S.154. Harit Developers ITA No.513/PUN/2022 PAN: AAGFH5853C ITAT-Pune Page 4 of 7 4. The Assessee craves leave to add, alter, modify or substitute any of the grounds of Appeal at the time of hearing.” 3. When case was called up at pre-scheduled physical hearing, none represented the assessee, in the interest of justice we proceed to adjudicate the matter following rule 24 of the ITAT-Rules, which empowers the Tribunal to decide the appeal ex–parte on merits where appellant does not appear in person or through its authorised representative and the same is done placing on record a no-objection from the respondent revenue. It is needless to mention that, proviso to said rule carves out an exception empowering the Tribunal to recall ex–parte order if appellant appears afterwards and satisfies placing evidential material to the effect that, there was sufficient cause for its non– appearance when appeal was called for hearing, however in the event of failure to substantiate non- appearance in the evince of evidentiary material, the recall exercise turns futile. Harit Developers ITA No.513/PUN/2022 PAN: AAGFH5853C ITAT-Pune Page 5 of 7 4. After hearing to rival contentions of both the parties; and subject to the provisions of rule 18 ITAT, Rules, 1963 perused case records, case laws relied upon by the appellant as well the respondent and duly considered the facts of the case in the light of settled legal position forewarned to parties present. 5. We note that, under a regular assessment, the appellant’s retuned income, after due examination and verification was accepted by an order dt. 07/12/2017 u/s 143(3) of the Act. Subsequently, on the receipt of demand intimation from CPC, the appellant finding fault with the tax liability determined u/s 143(3) of the Act, filed a rectification application dt. 14/05/2019 u/s 154 seeking thereby deletion of interest income of ₹40,00,000/- charged to tax under IOS, alleging it as erroneously crept-in while filing the ITR, which both the Ld. TAB rejected as falling outside the jurisdiction of section 154 of the Act. 6. In our considered view, no error can be said to be apparent on the face of the record if it does not Harit Developers ITA No.513/PUN/2022 PAN: AAGFH5853C ITAT-Pune Page 6 of 7 manifest or self-evident and requires an examination or argument to establish it. As in the present case, the appellant after culmination of regular assessment proceedings brought up the matter u/s 154 before the Ld. TAB alleging the interest income charged to tax u/s 143(3) of the Act as unearned and wrongly crept-in in the ITR, which invariably requires to be established so only by re-examination of records which ispo-fact falls outside the jurisdiction of section 154 of the Act. 7. Since the plea of the appellant is neither visible nor obvious nor self-evident on the face of the records which can be established without having re-examined the facts in the light of evidential document and without any lengthy and complicated arguments, hence to our considered view, sails out of apparent from record, for the reasons we approbate the action of both the Ld. TAB in the light of Hon’ble Supreme Court’s judgment of “ITO Vs Volcart Bros.” reported in 82 ITR 50, categorically held that “the mistake apparent from records must be obvious and patent, that is, the mistake may Harit Developers ITA No.513/PUN/2022 PAN: AAGFH5853C ITAT-Pune Page 7 of 7 be a mistake of fact or mistake of law but it must not involve a debatable point of law.” 8. Resultantly, the appeal of the appellant is DISMISSD in above terms. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this FRIDAY, 06 th day of January, 2023. -S/d- -S/d- S. S. GODARA G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE ; दिन ांक / Dated : 06 th day of January, 2023. आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1.अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The NFAC, New Delhi. 4. The CIT Concerned, Pune 5. DR, ITAT, Pune “C” Bench, Pune 6. ग र्डफ़ इल / Guard File. आिेश नुस र / By Order, वररष्ठ दनजी सदिव / Sr. Private Secretary आयकरअपीलीय न्य य दिकरण, पुणे / ITAT, Pune.