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2024 (5) TMI 1550 - AT - Income TaxRectification u/s 154 - computation of capital gains - HELD THAT - The case in hand is not the case of the apparent mistake. In the present case the assessee initially has computed the capital gain with reference to sale of mill consisting of land machinery and sheds separately under Long-Term Capital Gain and Short-Term Capital Gain whereas in the revised computation the assessee has sought to revise the computation by asserting that the sale of mill was one composite sale of unit and therefore the order u/s 143(1) is required to be rectified. The above said error if any cannot be corrected by the AO while passing the order u/s 154 as held in the case of T. S. Balaram Income Tax vs M/S. Volkart Brothers 1971 (8) TMI 3 - SUPREME COURT . Therefore the decisions relied upon by the assessee are not applicable to the facts of the case. The reliance of the assessee in the case of GOETZE India 2006 (3) TMI 75 - SUPREME COURT is also not correct as in that case the issue before the Hon ble Supreme Court/High Court was whether the assessee can claim a fresh claim at the appellate stage or not without filing the revised return or not. The case in hand is not related to filing of claim by revised return of income rather it is the case of alleged revision of incorrect/wrong facts in the computation of income at the time of filing of the return of income and after passing of the order u/s 143(1) revising the computation of income which in our view cannot be rectified in the order u/s 154. AR contended that sufficient time has been taken to file the present appeal before the Tribunal/CIT(A) therefore assessee may be given liberty to approach any alternative forum or authority or Hon ble High Court having jurisdiction. In view of the above liberty is granted to the assessee to file any other petition/appeal before any forum or authority or Hon ble High Court. Appeal filed by the assessee is dismissed.
ISSUES PRESENTED and CONSIDERED
The primary issues considered in this judgment are:
ISSUE-WISE DETAILED ANALYSIS 1. Rectification under Section 154 of the Income Tax Act Relevant legal framework and precedents: Section 154 of the Income Tax Act allows rectification of any mistake apparent from the record by an income-tax authority. The Supreme Court in T. S. Balaram, Income Tax vs M/S. Volkart Brothers clarified that a mistake must be obvious and patent, not requiring extensive reasoning or debate. Court's interpretation and reasoning: The Tribunal held that the mistake claimed by the assessee was not apparent from the record. The error involved a complex issue regarding the computation of capital gains, which required a detailed examination and was not a simple clerical or arithmetical error. Application of law to facts: The Tribunal concluded that the assessee's attempt to revise the computation of capital gains did not qualify as a rectifiable mistake under Section 154, as it involved a change in the nature of the transaction from separate sales to a composite sale. Treatment of competing arguments: The Tribunal considered the assessee's argument that the error was apparent and should be corrected under Section 154. However, it found that the nature of the mistake was not straightforward and thus did not meet the criteria for rectification. Conclusions: The Tribunal dismissed the appeal, affirming that the mistake was not apparent from the record and could not be rectified under Section 154. 2. Reliance on Precedents and Additional Grounds Relevant legal framework and precedents: The assessee cited several cases, including Dinumatiben Damjibhai Shilu vs. Income Tax Officer and ACIT vs. M/s. NSL Renewable Power (P) Ltd, to support their claim for rectification. Court's interpretation and reasoning: The Tribunal found that the cases cited by the assessee were not applicable to the present facts. The cited cases involved clear mismatches or errors that were apparent and could be rectified under Section 154, unlike the current case. Application of law to facts: The Tribunal determined that the precedents relied upon by the assessee did not support their position, as the nature of the alleged mistake in the current case was fundamentally different. Conclusions: The Tribunal did not find the precedents cited by the assessee to be relevant to the current case, as the mistake was not apparent from the record. 3. Admissibility of Additional Grounds Relevant legal framework and precedents: The Tribunal considered the admissibility of additional grounds under Rule 11 of the Income Tax (Appellate Tribunal) Rules, 1963, and the Supreme Court judgment in National Thermal Power Co. Ltd. v. CIT. Court's interpretation and reasoning: The Tribunal admitted the additional grounds for adjudication, recognizing that they were legal in nature and the relevant facts were already on record. Conclusions: The additional grounds were admitted for consideration, but ultimately did not affect the outcome of the appeal. SIGNIFICANT HOLDINGS Core principles established: The Tribunal reinforced the principle that a mistake must be obvious and patent to qualify for rectification under Section 154. Complex issues requiring detailed analysis or involving debatable points of law do not meet this criterion. Final determinations on each issue: The Tribunal concluded that the alleged mistake was not apparent from the record and could not be rectified under Section 154. The appeal was dismissed, and the assessee was granted liberty to approach other forums or authorities for further relief. The Tribunal's decision emphasizes the limited scope of Section 154, restricting it to clear and undisputed errors, and underscores the importance of precise initial filings to avoid technical disqualifications of claims for relief under the Income Tax Act.
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