M/S VITRAG ENTERPRISES V. ASSISTANT Commissioner of Income Tax 4(1),

TAXC/177/2024

AI Insights

The case involves M/s Vitrag Enterprises, which appealed against the orders of the Assessing Officer, CIT (Appeals), and ITAT, all of which upheld the initial assessment without addressing the merits of the appellant's application under Section 154 of the Income Tax Act. The appellant had revised its income return, which was accepted, but later contested an apparent error in the income head under 'Profit and Gains from the Business or Profession'. The High Court found that the lower authorities did not properly address this error in their decisions, leading to the setting aside of their orders and a directive for a fresh evaluation of the application.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 756197 (HC-CHHATTISGARH)
• Appeal Type: Others
• Pronouncement Date: 06-05-2025
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: AJAY KUMRANI
• Assessee Lawyers: MONIKA SINGH
• Keywords: Application under Section 154; Assessing Officer; CIT(Appeals); Income Tax; ITAT; Revised return
• Section: 154; 143(1); 260A

Judgement Text

"1 2025:CGHC:20650-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR TAXC No. 177 of 2024 {Arising out of order dated 07.03.2024 passed by the Income Tax Appellate Tribunal, Raipur Bench, Raipur in ITA No.129/RPR/2023} M/s Vitrag Enterprises Sadani Building, Sadar Bazar, Raipur Chhattisgarh 492001 ... Appellant. versus Assistant Commissioner Of Income Tax 4(1), Raipur Chhattisgarh, 492001 ... Respondent. For Appellant : Ms. Monika Singh, Advocate. For Respondent : Mr. Ajay Kumrani, Advocate. Hon'ble Shri Justice Sanjay K. Agrawal & Hon'ble Shri Justice Deepak Kumar Tiwari, JJ Judgment On Board (06/05/2025) Sanjay K. Agrawal, J 1. This appeal preferred under Section 260A of the Income Tax Act, 1961 (for short the \"IT Act\") has been admitted for final hearing on 04.04.2025 by formulating the following substantial questions of law:- “1. Whether the Assessing Officer is justified in rejecting the application filed by the appellant/assessee under Section 154 of the Income Tax Act by recording a finding which is perverse to the record? 2. Whether the CIT Appeals & ITAT are justified in upholding the order of Assessing Officer by recording a finding which is perverse to the record?\" Digitally signed by AJAY KUMAR DWIVEDI Date: 2025.05.08 14:58:07 +0530 2 2. The aforesaid two questions of law arise for consideration on the following factual backdrop:- 3. Initially, the appellant/assessee filed its return of income declaring its net taxable income at Rs.39,44,780/-. On 03.09.2011 the assessee revised its return of income at Rs.74,54,460/-. The said return of income (revised) was accepted by the Assessing Officer under Section 143 (1) of the IT Act on 24.02.2012 and demand of Rs.12,01,100/- was issued by the Revenue for Assessment Year 2011- 12 in favour of the assessee. Thereafter, the assessee filed an application under Section 154 of the IT Act claiming that CPC, Bengaluru in the intimation issued under Section 143 (1) of the Act dated 24.02.2012, has wrongly taken its income under the head of \"Profit and Gains from the Business or Profession\" at Rs.35,09,675/- instead of 'Nil'. However, the said application under Section 154 of the IT Act was rejected by the Assessing Officer on 18.10.2019. Being aggrieved by the said order, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals) (\"CIT (Appeals)\"), however, the said appeal was also rejected on 21.03.2023 by affirming the decision of Assessing Officer. Against the said order, the assessee filed an appeal before the Income Tax Appellate Tribunal (ITAT), which was dismissed by the ITAT by order dated 07.03.2024 upholding the order of the Assessing Officer as well as the CIT (Appeals). Hence, this tax appeal has been filed. 3 4. Ms. Monika Singh, learned counsel for the appellant submits that the Assessing Officer, CIT (Appeals) as well as the ITAT concurrently erred in not considering the application under Section 154 of the IT Act on merits as such there was an apparent error on the face of the record. Therefore, the orders passed by the concerned Authorities deserve to be set-aside and the matter is required to be remitted to the concerned Authority to decide the application under Section 154 of the IT Act afresh on merits. 5. On other hand, Mr. Ajay Kumrani, learned counsel for the respondent supports the impugned order and prays to dismiss the appeal. 6. We have heard learned counsel for the parties and considered their rival submissions and also went through the record with utmost circumspection. 7. Admittedly, the appellant/assessee revised its return of income at Rs.74,54,460/-, which was processed and accepted by the concerned Authority on 24.02.2012 and subsequently, a demand of Rs.12,01,100/- was issued by the Revenue on 08.02.2013. Thereafter, the assessee filed an application under Section 154 of the IT Act, which was rejected by the Assessing Officer on 18.10.2019 summarily, without considering the fact that in the intimation under Section 143 (1) of the Act, the income under the head of \"Profit and Gains from the Business or Profession\" at Rs.35,09,675/- has 4 wrongly been shown instead of 'Nil', which is an apparent error on the face of the record. However, the Assessing Officer did not notice the said error and rejected the application under Section 154 of the IT Act simply by observing that the assessee himself has filed the return and the mistake is not apparent from the record. The CIT (Appeals) as well as the ITAT have also committed the same error. In our considered opinion, the Assessing Officer ought to have considered the application under Section 154 of the IT Act on merits after properly appreciating the points raised on behalf of the appellant/assessee. 8. In the aforesaid backdrop, the order passed by the Assessing Officer on 18.10.2019 is set-aside. The subsequent order dated 21.03.2023 passed by the CIT (Appeals) as well as the order dated 07.03.2024 passed by the ITAT is also set-aside. Application under Section 154 of the IT Act is restored to the file of Assessing Officer for hearing and disposal in accordance with law, expeditiously. 9. The substantial questions of law are answered in favour of the appellant/assessee and against the Respondent/Revenue. 10. In the result, the appeal is allowed to the extent indicated above leaving the parties to bear their own cost(s). Sd/- Sd/- (Sanjay K. Agrawal) (Deepak Kumar Tiwari) Judge Judge ajay "