2020 (7) TMI 214 - ITAT CHANDIGARH - Income Tax

Head Note / Extract:
Rectification of mistake u/s 154 - denying deduction claimed by the assessee u/s 54B - mistake which is apparent from the record - whether issue of allowance of benefit under section 54B was investigated by the Ld. Assessing Officer during the course of original assessment proceedings and has wrongly held that it is a mistake apparent form the record? - HELD THAT:- As per the provisions of the Income Tax Act, the assessee inter alia can be an individual or an 'HUF' also. As per amended provisions deduction is available to the “assessee” if the land is used for agricultural purposes by the assessee himself or by his parent or an 'HUF'. What is noted is that amendment has been carried out in respect of ‘user’ of the land not in respect of the claimant / assessee whose income is assessed. In the land record maintained by the Land Revenue Department, ownership of property is entered in the name of an individual and not in the name of 'HUF' and that the 'HUF' claim of ownership over such a property by virtue of the property being ancestral and put into the common hotchpotch of the family. Under the circumstances, the issue being highly debatable and requires lengthy arguments. It is a settled law that powers of the AO to rectify an order u/s 154 are very limited and can be exercised only in a case where the AO finds that a mistake apparent on record had occurred - in the case of a debatable issue or where the lengthy arguments are needed to decide the issue, powers u/s 154 of the Act can not be exercised to amend an already passed order - powers u/s 154 of the Act cannot be exercised on change of opinion by the Assessing Officer on an issue relating to any admissibility of a claim. AO thus, in our view was, not justified in passing the impugned order u/s 154 of the Act with limited jurisdiction of rectification of order in the case of a ‘mistake apparent on record’ in the order. Rectification order cannot be held to be justified. - Decided in favour of assessee.