Deputy Commissioner of Income-Tax, Circle 1(1), Pune V. M/s Darode Jog Homes P Ltd., Pune

ITA 845/PUN/2022

AI Insights

The case involves the Revenue's challenge against the NFAC's order setting aside the ITO's rectification order concerning M/s Darode Jog Homes Pvt. Ltd. for the assessment year 2015-16. The ITO had initially rectified an apparent mistake regarding the 'excess claim of premium on debenture redemption' without providing a further opportunity to the assessee after the initial notice. The NFAC found this procedure flawed and set aside the rectification, directing a fresh consideration. The ITAT agreed with the NFAC's decision, citing the need to adhere to procedural fairness under section 154(3) of the Act.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 136222 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 27-03-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 24-11-2022
• Other Referred Cases: Deepak Agro Foods Vs State of Rajasthan
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PRASANTH PARDESHI
• Section: 154; 250

Judgement Text

॥ आयकर अपीलीय न्यायाधिकरण, पुणे “ए” न्यायपीठ, पुणे में ॥ ITAT-Pune Page 1 of 4 IN THE INCOME TAX APPELLATE TRIBUNAL, PUNE “A” BENCH, PUNE BEFORE HON’BLE SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER आयकर अपऩल सं. / ITA No. 845/PUN/2022 निर्धारण वर्ा / Assessment Year : 2015-16 Dy. Commissioner of Income Tax Circle 1(1), Pune . . . . . . . अपऩलधथी / Appellant बनाम / V/s M/s Darode Jog Homes Pvt. Ltd., 1212, Darode Jog House, Apte Rd., Deccan Gymkhana, Pune- 411 004 PAN: AADCD4828M . . . . . . . प्रत्यथी / Respondent द्वारा / Appearances Assessee by : Shri Nikhil Pathak & Prasanth Pardeshi Revenue by : Shri Ramnath Murkunde सपिवधई की तधरऩख / Date of conclusive Hearing : 28/03/2023 घोर्णध की तधरऩख / Date of Pronouncement : 28/03/2023 आदेश / ORDER PER G. D. PADMAHSHALI, AM; The Revenue challenges the action of the National Faceless Appeal Centre, Delhi [for short “NFAC”] passing an order dt. 19/07/2022 u/s 250 of the Income-tax Act, 1961 [for short “the Act”] setting aside the order of rectification dt. 20/07/2021 passed u/s 154 of the Act by the Income Tax Officer Ward 1(1), Pune [for short “AO”] for the assessment year [for short “AY”] 2015-16. M/s. Darode Jog Homes Pvt. Ltd., ITA No. 845/PUN/2022 AY: 2015-16 ITAT-Pune Page 2 of 4 2. Heard the rival contentions of both the parties; and subject to the provisions of rule 18 of ITAT, Rules 1963 perused the material placed on record. 3. By the extant appeal, the Revenue through Ld. DR contends that, the order of rectification u/s 154 of the Act was passed following the due procedure and after according reasonable opportunity to assessee; hence the Ld. NFAC has grossly erred in setting aside the said order with a direction to consider the issue de-nova. Per-contra, the Ld. AR supports the action of Ld. NFAC. 4. Without going into the merits of the case, we note that; assessee’s return of income was subjected to scrutiny through CASS mechanism and the final assessment u/s 143(2) of the Act was concluded accepting returned income without variation. Post culmination of assessment, the Ld. AO by a solitary notice dt. 21/01/2021 to the assessee proposed his intention to correct the apparent mistake in allowing the ‘excess claim of premium on debenture redemption’ in the scrutiny assessment. When the notice remained unattended, the Ld. AO without M/s. Darode Jog Homes Pvt. Ltd., ITA No. 845/PUN/2022 AY: 2015-16 ITAT-Pune Page 3 of 4 further notice to the assessee has carried out the rectification enhancing the assessment u/s 154 of the Act. When the matter travelled to first appellate forum, Ld. NFAC invoking the power u/s 251(1)(c) of the Act has set- aside the aforesaid order of rectification and restore the matter back to Ld. AO with a direction to consider the objection of the assessee and decide the matter a fresh. 5. In adjudicating this sole clinching issue as to whether the Ld. AO detoured from the set-procedure laid section 154 of the Act, we without re-producing the text of section 154 of the Act state that, the assessing officer invoking the provisions of section 154 to rectify the any apparent mistake, after his proposition to rectify is communicated to the assessee, by virtue of s/s (3) is further obligated to provide a reasonable opportunity of being heard to the assessee in all such cases where the proposed rectification has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assesse. 6. In the extant case however, it remained an undisputed fact that, the Ld. AO after communicating his M/s. Darode Jog Homes Pvt. Ltd., ITA No. 845/PUN/2022 AY: 2015-16 ITAT-Pune Page 4 of 4 proposition to rectify the original order of assessment, has without further opportunity carried out the rectification sidestepping from the provisions of s/s (3) of section 154 of the Act and thus in violation principle of audi alteram partem. However, this irregularity committed would not render the rectification altogether null and void, hence the action of Ld. NFAC in the light of decision of Hon’ble Apex Court in “Deepak Agro Foods Vs State of Rajasthan” reported in 16 VST 454 (SC) is well within the law, therefore we do not see any reason to interfere therewith. 7. In result, the appeal of the Revenue is DISMISSED. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this Tuesday 28 th day of March, 2023. -S/d- -S/d- S. S. GODARA G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE ; दिन ांक / Dated : 19 th day of April, 2023. Ashwini आदेश की प्रधिधलधप अग्रेधिि / Copy of the Order forwarded to : 1.अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT -1, Pune (MH-India) 4. The CIT(A)-NFAC, Delhi (India) 5. DR, ITAT, Pune Bench ‘A’, Pune 6. ग र्डफ़ इल / Guard File. आिेश नुस र / By Order वररष्ठ दनजी सदिव / Sr. Private Secretary आयकर अपीलीय न्य य दिकरण, पुणे / ITAT, Pune.