Vardhaman Enterprises, Pune V. Income Tax Officer, Ward 9(4), Pune

ITA 71/PUN/2023

AI Insights

The case involves Vardhaman Enterprises appealing against the rectification order passed by the Income Tax Officer under Section 154 of the Income Tax Act, 1961, concerning the assessment year 2014-15. The rectification pertained to a mismatch in reported contract receipts and the receipts recorded in the 26AS form, leading to an additional gross profit assessment of Rs. 86,236. The Tribunal examined whether the rectification order was appropriate under Section 154, which is meant for correcting apparent mistakes, and concluded that the issues raised required detailed inquiry, thus exceeding the scope of Section 154.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 137370 (ITAT-PUNE)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2023
• Appeal Filed By: Assessee
• Order Result: AllowedAllowed
• Bench Allotted: B
• Next Hearing Date: 08-03-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 19-01-2023
• Other Referred Cases: T.S. Balram, ITO vs. Volkart Bros. [1971] 82 ITR 50 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B” : PUNE BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER ITA.No.71/PUN./2023 Assessment Year 2014-2015 Vardhaman Enterprises, Flat No.2, S.No.126/2, Shri Apartments, Mohan Nagar, Chinchwad, Pune - 411 019. Maharashtra. PAN AAGFV1597B vs. The Income Tax Officer, Ward-9(4), Pratyaksha Kar Bhavan, Dr. Ambedkar Marg, Near Akurdi Railway Station Pradhikaran, Pune PIN – 411 044 Maharashtra. (Appellant) (Respondent) For Assessee : Shri Bharat Shah For Revenue : Shri M.G. Jasnani Date of Hearing : 09.03.2023 Date of Pronouncement : 20.03.2023 ORDER PER SATBEER SINGH GODARA, J.M. This assessee’s appeal for assessment year 2014-15, arises against the National Faceless Appeal Centre [in short “NFAC”], Delhi’s Din & Order No.ITBA/NFAC/S/250/2022- 23/1048081678(1), dated 19.12.2022, involving proceedings under Section 154 of the Income Tax Act, 1961 (in short “the Act”). Heard both the parties. Case file perused. 2. The assessee pleads the following substantive grounds in the instant appeal : 2 ITA.No.71/PUN./2023 Vardhaman Enterprises, Pune. 1) “The learned assessing officer erred in facts and circumstances of the case and in law in passing the order u/s 154 of the Income Tax Act when already the submissions and reconciliation for turnover mismatch was made and was placed on record which is evident from the assessment order passed under section 143(3). The addition made by passing an order u/s 154 be deleted and just and proper relief be granted to the assessee in this respect. 2) The authorities below erred in making and confirming additions for gross profit of Rs.86236/- being gross profit on mismatch in 26AS data when all the receipts as reported in 26AS are incorporated while filing income tax return for Assessment Year 2014-15. The order so passed be cancelled and just and proper relief be granted to the assessee in this respect. 3) The Appellant prays to be allowed to add, amend, modify, rectify, delete, raise any ground of appeal before or at the time of hearing.” 3. The assessee’s above extracted pleadings make it clear that its sole substantive grievance challenges correctness of both the learned lower authorities action invoking sec.154 rectification jurisdiction for the purpose of assessing the mismatched contract receipts of Rs.9,58,176/- at the flat rate 3 ITA.No.71/PUN./2023 Vardhaman Enterprises, Pune. of 9%, coming to Rs.86,236/- in the Assessing Officer’s order dated 07.08.2018; as affirmed in NFAC’s lower appellate discussion in question. This is what leaves the assessee aggrieved. 4. We have given our thoughtful consideration to the vehement rival stands against and in support of the impugned rectification proceedings. There is hardly any dispute about the settled legal proposition in T.S. Balram, ITO vs. Volkart Bros. [1971] 82 ITR 50 (SC) section 154 of the Act is attracted only in case of an apparent mistake than those requiring long drawn process of detailed enquiry(ies). We keep in mind the same to note that the assessee’s stand all along as per it’s statement of facts filed before the NFAC is that the impugned sum involving S/Shri Dilip N Bharne proprietor of M/s. Trimurti Enterprises and Clincy Constructions Pvt. Ltd. is in the nature of service tax component which already stands assessed as the Assessing Officer had framed the scrutiny assessment dated 26.10.2016 after carrying-out his detailed investigation qua the alleged excess turnover declared, ITS data and 26AS, as the case may be. All what the learned NFAC has done is to simply harp upon sec.154 jurisdiction exercised by the Assessing Officer than rebutting the said clinching averments. We conclude in this factual and legal backdrop that the impugned sec.154 rectification for the purpose of 4 ITA.No.71/PUN./2023 Vardhaman Enterprises, Pune. assessing the instant taxpayer’s receipts @ 9% falls beyond the purview of sec.154 jurisdiction. The same stands reversed. Ordered accordingly. 5. This assessee’s appeal is allowed in above terms. Order pronounced in the open Court on 20.03.2023. Sd/- Sd/- [DR. DIPAK P. RIPOTE] [SATBEER SINGH GODARA] ACCOUNTANT MEMBER JUDICIAL MEMBER Pune, Dated 20 th March, 2023 VBP/- Copy to 1. The appellant 2. The respondent 3. The CIT(A), Pune-6, Pune. 4. The CCIT, Pune. 5. D.R. ITAT, Pune “B” Bench, Pune 6. Guard File. //By Order// Assistant Registrar, ITAT, Pune Benches, Pune.