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2014 (8) TMI 311 - AT - Income TaxNotice u/s 154 not served – Rectification of order - Assessment enhanced but opportunity of being heard not given – Held that:- The original assessment of the assessee company was completed u/s 143(3) of the Act - relying upon Commissioner of Income-Tax Versus Hero Cycles Pvt. Limited And Others [1997 (8) TMI 6 - SUPREME Court] - rectification u/s 154 of the Act can only be made when glaring mistake of the fact and law has been committed in the impugned order and it is apparent from record - the rectification is not permissible if the question is debatable and the point which was examined on fact or in law cannot be dealt with as mistake apparent from record - the AO completed assessment u/s 143(3) of the Act without objecting to the claim of the assessee company pertaining to the electricity expenses for residence of the directors of the company. Also in Maharana Mills (P.) Ltd. vs Income-tax Officer [1959 (4) TMI 7 - SUPREME Court] - the object of providing the issue of notice in section 154 of the Act is that no order should be passed to the detriment of assessee without affording due opportunity of hearing to him and this provision is applicable where the assessment is enhanced by making certain disallowances or additions - the AO completed assessment u/s 143(3) of the Act and subsequently picked up the case again u/s 154 of the Act on debatable issue on the basis of 3CD Report of the auditor which was also before him at the time of original assessment - the AO passed order u/s 154 of the Act on the back of the assessee without affording due opportunity of hearing and the AO enhanced the assessment by making additions in regard to claim of expenditure pertaining to electricity bills of the residence of the directors of the company, which cannot be said to be a mistake apparent from record and order u/s 154 of the Act is not sustainable on debatable issue which was also under examination and verification by the AO during original assessment proceedings - the order passed by the AO u/s 154 of the Act is outside the ambit of section 154 of the Act – Decided in favour of Assessee.
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