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2023 (12) TMI 648 - AT - Income TaxOrder u/s 154 denying Exemption of income u/s. 10 - dividend received was claimed to be exempt from taxation - claim of the assessee was not allowed by the AO and an order / intimation u/s 143(1) was passed making addition / adjustment - In appeal, against the order u/s 154 assessee submitted that the aforesaid income is actually interest income instead of dividend income and the aforesaid interest income was received from investments made in Government Companies - HELD THAT:- We observe that in the case of DCIT vs. Justice Dilip Kumar Seth [2005 (9) TMI 239 - ITAT CALCUTTA-B] ITAT held that the AO is well competent to rectify any mistake in the intimation u/s.143(1) of the Act which was brought to his notice by the assessee. Also in the case of Pawan Kumar Aggarwal vs. CIT [2014 (5) TMI 449 - DELHI HIGH COURT] has held that from bare reading of section 154 of the Act, it is apparent that the power of rectification extends to amendment of an intimation or deemed intimation u/s.143(1) of the Act. The Hon’ble High Court further held that this power of rectification enures even after the matter has been considered and decided in any proceedings by way of appeal or revision. It was held that necessarily this power extends even at the stage of the appeal and further appeal to the ITAT. In the case of Zen Tobacco (P.) Ltd. v ACIT [2015 (7) TMI 729 - ITAT AHMEDABAD] assessee had filed its return of income declaring certain income and the same was processed under section 143(1). Subsequently, on verification of assessee's record, it was noticed that the provision of deferred tax assets of certain amount, which ought to have been deducted from total income, was not deducted but added back to amount of profit and, thus, taxable income was overstated. Therefore, the assessee filed an application under section 154 seeking for rectification of mistake along with the revised statement of income and claimed a refund. AO rejected the application observing that the assessee should have filed a revised return rather than taking recourse to section 154, which was not permissible under the Act. On appeal, the Commissioner (Appeals) dismissed the appeal. On second appeal, the Ahmedabad ITAT held that from the provisions of sections 139(1), 139(5) and 143(1) it is evident that it is not the case that revenue authorities have to accept whatever has been stated in the return and compute the taxable income mechanically. As per provisions of section 143(1), the concerned revenue authority has to examine whether any claim as made by the assessee is correct or not. This includes understatement and overstatement of the income. If the revenue authority failed to take note of any incorrect claim with regard to total income of the assessee, such failure would necessarily mean mistake apparent from the record. Thus the matter is being restored to the file of the Ld. CIT(A) to carry out necessary verifications and if the claim of the assessee is found to be correct, may be allowed relief to the assessee in accordance with law.
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