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2023 (3) TMI 1352 - AT - Income TaxRectification of mistake u/s 154 - disallowance u/s 40A(3)which was in turn endorsed by the CIT(A) in the first appeal and decided against the assessee - assessee contended that the cash payments were made on Holiday/Sunday and is thus covered by extant clause (J) of Rule 8DD of the Income Tax Rules as well as by considerations of business expediency - assessee further contends that provisions of Section 154 confer a very narrow and limited power to rectify any mistake which is apparent from record - HELD THAT:- We agree. The Rule 6DD(J) at the relevant time provided for inapplicability of Sect ion 40A(3) where the payments were made in cash on bank Holidays. The Assessing Officer has questioned the intention of cash payments shown on Sunday of every month and thus rejected the explanation. While, the explanation of payments on Holidays appears highly doubtful but however such inference cannot be taken in the realm of obvious mistake. Sect ion 154 has no application to gauge the purported mala fides in explanation offered by the Assessee behind such transaction. The narrow jurisdiction of Section 154 is thus not available to the Assessing Officer to rectify such so called mistake. We thus set aside the order of the CIT(A) and cancel the rectification carried out on this point.Appeal of the assessee is allowed.
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