Chinmaya Educational Society, Chinmaya Vidyalaya, UHF, Nauni, Solan V. ITO Ward Exemptions, Solan

ITA 528/CHANDI/2022

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 6052 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 03-06-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 26-06-2022
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 154; 143(3); 143(1)

Judgement Text

आयकर अपीलȣय अͬधकरण,चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, ‘A’, CHANDIGARH BEFORE SHRI A.D. JAIN, VICE PRESIDENT & DR KRINWANT SAHAY, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 528/CHD/2022 Ǔनधा[रण वष[ / Assessment Year : 2015-16 Chinmaya Educational Society, Chinmaya Vidyalaya,, UHF, Nauni, Solan 172230 Himachal Pradesh Vs. बनाम The ITO, Ward Exemptions, Solan èथायी लेखा सं./PAN No: AAATC2581J अपीलाथȸ ./ Appellant Ĥ×यथȸ / Respondent ( HYBRID MODE ) Ǔनधा[ǐरती कȧ ओर से/Assessee by : Sh. Vishal Mohan, Sr. Advocate with Shri Parveen Sharma, Advocate. राजèव कȧ ओर से/ Revenue by : Smt. Amanpreet Kaur, DR स ु नवाई कȧ तारȣख/Date of Hearing : 04.06.2024 उदघोषणा कȧ तारȣख/Date of Pronouncement : 04 .07.2024 आदेश/Order Per Dr. Krinwant Sahay, A.M.: The appeal in this case has been filed by the Assessee against the order dated 17.11.2021 of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi. 2. This appeal is delayed by 158 days and an Application for condonation of delay has been filed by the Assessee, the relevant contents of which are as under: 528-Chd-2022 Chinmaya Educational Society, Solan 2 1. That the order appealed against was passed by the Ld. Commissioner of Income Tax (Appeals) National Faceless Appeal Centre vide orders dt 17/11/2021 and the last date of limitation of filing of the appeal expired on 16 th of January 2022. 2. That the orders were not received in the physical form but were uploaded in the official website of the department and through email which went un noticed by the applicant. The applicant came to know about the passing of the said order on 21 st of June when he opened his account in the web portal because notice for recovery of the outstanding demand was received by the applicant. 3. That moreover in Miscellaneous Application No. 21 of 2022, the Hon'ble Supreme Court has directed the exclusion of the period from 15.03.2020 till 28.02.2022 and thereafter a period of 90 days stands given by the Hon'ble Supreme Court. If limitation is calculated from the said order then there is a delay of 27 days in filing of the application. 4. That the delay in filing of the appeal was neither willful nor intentional but had occasioned due to the reasons aforementioned. 5. That no prejudice shall be caused o the applicant if the delay in filing of appeal is condoned whereas the applicant would be put to an irreparable loss. 528-Chd-2022 Chinmaya Educational Society, Solan 3 It is, therefore, most respectfully prayed that application be allowed and the delay in filing of the appeal be condoned and the appeal be ordered to be heard on merits. 3. The reasons for the condonation have been considered. The ld. DR did not have any objection and accordingly, the delay in filing of this appeal is condoned. 4. The appeal in this case has been filed on the following Grounds:- 1. That the ld. CIT(A) is not justified in upholding assessing the income of the Assessee at Rs. 51,48,304/- holding the excess of income over expenditure as the taxable income of the Assessee that too u/s 154 of the Income Tax Act, 1961. 2. That the order of the ld. CIT(A) is bad in law and facts. 5. Brief facts of the case are as under: - "That the return for the year under consideration had been filed declaring nil income. The return of the assessee was processed u/s 143(1) of the Income Tax Act, 1961. The vide order dated 14.12.2017 assessment for the year under consideration has been framed under section 143(3) of the Income Tax Act, 1961. In doing so the Ld. AO assessed the income of the assesses at Rs. 15,95,150/-. 528-Chd-2022 Chinmaya Educational Society, Solan 4 That vide notice dated 17.03.2021, the Ld. AO issued notice u/s 154 of the Income Tax Act, 1961 to rectify the order dated 14.12.2017. Not finding favour with the reply dated 22.03.2021 the Id. AO made an addition of Rs. 51,48,304/- on account of excess income over expenditure and added back a sum of Rs. 51,48,304/- to the taxable income of the assessee and thereby created a demand of Rs. 36,34,565/- stands created against the assessee. That being aggrieved by the same the assessee is before this Honble Forum on the grounds." 6. During the proceedings before us, the ld. Counsel of the Assessee has filed a brief submission which is as under:- 1. That the present appeal has been preferred against the dismissal of the appeal by the Ld. CIT(A) against the orders passed by the Ld Assessing Officer under section 154 of the Income Tax Act, 1961. 2. Assessment was framed under section 143(3) at a taxable income of Rs 675540/-. The said order was assailed in appeal before the Ld. CIT(A) and the said appeal is pending adjudication. 3. That pending the appeal the Ld. AO passed an order u/s 154 and assessed the taxable income at Rs 6743450/-. 4. That the matter was assailed in appeal before the Ld. CIT(A) on the ground that the order passed by the Ld. AO is not sustainable as under section 154 only mistakes apparent from record could be rectified and none other than those. Reliance was placed on the judgement of the Hon'ble Supreme Court of India in 528-Chd-2022 Chinmaya Educational Society, Solan 5 the case of Volkart Brothers reported as 82 1TR 50 page (SC). 5. The Ld CIT(A) has dismissed the said appeal and aggrieved by the same the assessee is before this Hon’ble Tribunal . 6. That it is firstly submitted that as the appeal against the assessment order is pending adjudication the order u/s 154 is not sustainable and there existed no mistake apparent from record. Again reliance in this placed on the judgement of the Hon'ble Supreme Court of India in the case of Volkart Brothers reported as 82 ITR 5 ( page (SC). 7. The only issue involved in this appeal is against the order passed by the Assessing Officer u/s 154 of the Income Tax Act, 1961 (in short 'the Act') and its sustenance by the ld. CIT(A). 8. The ld. CIT(A) has given findings on this issue as under:- “4.3 Ground no.1: Section 154 vests, the power of rectification of any mistake in the Income tax authority which is apparent from record. By virtue of the power vested in income tax authority u/s 154(1 )(a) he may rectify any order. If he finds that order as incorrect due to any mistake apparent from the record. 4.4 It is matter of record that the assessee has not filed any argument in the present appeal in respect of this ground. However, before the Assessing Officer his argument was based upon the ratio of Volkart Brothers 82 ITR 50(SC). The assessee apparently had 528-Chd-2022 Chinmaya Educational Society, Solan 6 incorrectly relied upon the ratio of Volkart Brothers as the Honble Supreme Court in this case had interpreted mistake apparent from record to be a patent mistake on which there cannot be two opinions. It is also matter of record that the said order of processing was acceptable to the assessee and he has not appealed against the said order. Therefore, so far as income determined after processing u/s 143(1 )(a) is concerned there is no dispute or debate. 4.5 Though, the assessee has not given any argument at the appellate stage the only moot point for examination here is if the Assessing Officer was correct in treating non-adoption of the income computed u/s 143(1)(a) as mistake apparent from record while rectifying the order passed u/s 143(3). 4.6 The above issue has been examined by Hon'ble Supreme Court in Maharana Mills Pvt. Ltd. vs ITO 36 ITR 350(SC) and it has been decided that the word "record” does not mean only the order of assessment but it comprises all proceedings on which assessment order is based. Similarly, as per the ratio of CIT vs MRM Plantations Pvt. Ltd. 102 Taxman 1(Mad), the record for purpose of 154(1) is the record available to the authorities at the time of initiation of proceedings for rectification and not merely the record of original proceeding sought to be rectified. More recently, the Kerala High Court in case of Upasana Hospital and Nursing Home vs CIT 253 ITR 507(Ker.) has decided that power of rectification u/s 154 is to be exercised with reference to the records of the assessee available with the Assessing Officer and not with particular reference to the assessment alone. Record cannot be said to be the record for particular Assessment but the entire record of the Assessee relating to the all the Assessment Years. 528-Chd-2022 Chinmaya Educational Society, Solan 7 4.7 On the basis of these authorities, the exercise of the power u/s 154 by the Assessing Officer in the present case is justified so far as it relates to Ground no. 1. Accordingly, Ground No.1 is decided against the assessee.” 9. We have considered the findings of the Assessing Officer in his order passed u/s 154 of the Act, written submissions filed by the Counsel of the Assessee and the findings given by the ld. CIT(A) in his order. The main argument of the ld. Counsel of the Assessee in this case was that the scope of Section 154 is over stretched by the Assessing Officer. The Counsel further argued that once order u/s 143(3) has been passed, going back to 143(1) is not justified. The ld. DR relied on the order of the CIT(A). 10. We find that while calculating income of the Assessee, the A.O. has taken the figure at ‘nil’ income which according to him is not correct and it was just a clerical mistake to take the income of the Assessee at ‘nil’ and accordingly, he issued notice u/s 154 of the Act and made rectification which according to the Assessing Officer was a mistake apparent from record. We find that the Assessee has not filed any argument on this issue before the ld. CIT(A). Even during the proceedings before us, the Counsel of the Assessee had argued on the basis of the ratio decided by the Hon'ble Supreme Court in the case of ‘Volkart Brothers’ (supra). In fact, the ratio decided in this case has 528-Chd-2022 Chinmaya Educational Society, Solan 8 already been discussed by the ld. CIT(A) in his order and the ld. CIT(A) has also discussed different judgements such as ‘Upasana Hospital and Nursing Home vs. CIT’ (supra), ‘MRM Plantations Provision Ltd.’ (supra), and finally ‘Maharana Mills Pvt Ltd vs. CIT (SC). (supra). 11. We find that the ld. CIT(A) has given a very clear finding that while passing the order u/s 154 of the Act, the A.O. has to take into consideration the records of the Assessee which are available with the A.O. and it includes not only assessment order but all other documents on which the assessment has been framed. Accordingly, we find that there is no need to disturb the ratio given by the ld. CIT(A) on this issue in the order. As such, Assessee’s appeal on this issue is dismissed. 12. In the result, appeal filed by the Assessee is dismissed. Order pronounced on 04.07.2024. Sd/- Sd/- ( A.D. JAIN ) (DR KRINWANT SAHAY) Vice President Accountant Member “आर.के.” आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the order forwarded to : 528-Chd-2022 Chinmaya Educational Society, Solan 9 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकर आय ु Èत/ CIT 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 5. गाड[ फाईल/ Guard File आदेशान ु सार/ By order, सहायक पंजीकार/ Assistant Registrar