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2019 (3) TMI 910 - AT - Income TaxRectification of mistake u/s 154 - mistake apparent from the record - in original order individual tax rates were wrongly charged - AO after examination of trustee taxability charged maximum marginal rate u/s 167B - Further examination is a patent mistake - not part of record but brought in 154 proceedings - HELD THAT:- Therefore the provisions of section 167B are not applicable automatically, but can be applied only after examination of facts as to whether any of the Member of the AOP has income which exceeds the maximum amount which is not chargeable to tax in the relevant years. It is not a mistake apparent from the record which can be rectified u/s 154 of the Act. The AO has to examine the facts and also has to verify the income of each of the Trustees. Assessee had stated that the return of income of Mr. Mahesh Kumar Khetan was not part of the assessment records of the assessee, but the same is referred to by the AO in the order u/s 154. Therefore, the AO had clearly verified the record of Mr. Mahesh Kumar Khetan to come to the conclusion that his income exceeded the maximum limit of the income which is not chargeable to tax. AO had exceeded his jurisdiction in exercising his powers u/s 154 of the Act. It was clearly a debatable issue and as held by the Hon'ble Supreme Court in the case of T.S. Balaram vs. Volkart Bros [1971 (8) TMI 3 - SUPREME COURT] a mistake apparent from the record must be patent mistake on which there can be no two opinions. Therefore, according to me, the initiation and exercise of powers u/s 154 of the Act by the AO is not sustainable. Even on merits, we find that the Trustees are not the beneficiaries in any way and there is a sole beneficiary who has no other income but the income generated by the Trust. The assessee Trust is not carrying on any business but is only managing the income from other sources for the benefit of the beneficiary. Therefore, even on merits, we are not inclined to accept the order u/s 154 of the Act. - Decided in favour of assessee.
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