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K.K.J. FOUNDATIONS Versus THE ASSISTANT DIRECTOR OF INCOME TAX (EXEMPTION) , KOCHI

2015 (9) TMI 612 - KERLA HIGH COURT

Rectification under Sec.154 - assessee seeking to rectify the order of assessment, contending that out of the gross income of ₹ 2,66,50,000/- an amount of ₹ 84,00,000/- was received during the previous year ending 31.03.2005 from Mr. K.K. Joseph as loan and ₹ 1,62,50,000/- was also received as loan from K.K. Joseph during the current year - Held that:- On a perusal of the facts, the orders rendered by the statutory authorities and the Tribunal and appreciating the pleadings put .....

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we do not find any illegality or other legal infirmities in the finding entered by the Appellate Tribunal so as to invoke our jurisdiction conferred under Sec.260A - I.T.A. No. 242 of 2014 - Dated:- 8-9-2015 - ANTONY DOMINIC AND SHAJI P. CHALY, JJ. FOR THE APPELLANT : SRI.B.ASHOK SHENOY, SMT.C.G.PREETHA, SRI.K.V.GEORGE, SRI.P.N.RAJAGOPALAN NAIR AND SRI.P.S.GIREESH FOR THE RESPONDENT : SRI.P.K.R.MENON,SR. COUNSEL, GOI(TAXES) AND SRI.JOSE JOSEPH, SC, JUDGMENT Shaji P. Chaly, J. This appeal is fil .....

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ust registered under Sec.12AA of the Income Tax Act, 1961 (hereinafter called "the Act"). Assessee filed its return of income for the assessment year 2006-07 on 31.10.2008, declaring nil return. Notice under Sec.143(2) was issued and since there was no response, notice under Sec.142 (1) of the Act was issued. In response to the same, assessee appeared and produced the books of accounts and other relevant documents called for. Even though opportunity was provided to produce the required .....

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ived by it was a capital donation and therefore the entire receipt of the Trust during the assessment year in question was treated as its income and the claim of the appellant for exemption under Sec.11 of the Act was rejected and thereupon the assessment was completed accordingly. 4. Aggrieved by the order, appellant had chosen to file an application for rectification under Sec.154 of the Act, seeking to rectify the order of assessment, contending that out of the gross income of ₹ 2,66,50 .....

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. Aggrieved by the order passed by the Assessing Officer, the appellant preferred appeal before the Commissioner of Income Tax (Appeals) and by Annexure-C order, the Commissioner allowed the appeal partly and held that the treatment of ₹ 1,00,00,000/- as corpus donation in the hands of the assessee, since the trustee has given letter of consent that the amount of loan earlier given should be treated as corpus donation, this amount that was converted from loan account to corpus donations ev .....

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Officer was directed to exclude the corpus donation from the total income. 6. Aggrieved by the said order, Revenue preferred appeal before the Appellate Tribunal. The Tribunal, without going into the merits of the case, entered into a finding that in case the assessee was aggrieved against the decision of the Assessing Officer, the remedy de facto did not lie before the Assessing Officer. Holding so, it was found that there was no mistake apparent from record in the order of the Assessing Office .....

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is only proper that Sec.154 of the Act is extracted hereunder: "154. Rectification of mistake (1) With a view to rectifying any mistake apparent from the record an income-tax authority referred to in section 116 may,- (a) amend any order passed by it under the provisions of this Act; (b) amend any intimation or deemed intimation under sub-section (1) of section 143; (c) amend any intimation under sub-section (1) of section 200A. (1A) Where any matter has been considered and decided in any .....

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uch amendment for rectifying any such mistake which has been brought to its notice by the assessee (or by the deductor), and where the authority concerned is the Commissioner (Appeals), by the (Assessing) Officer also. (3) An amendment, which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee (or the deductor), shall not be made under this section unless the authority concerned has given notice to the assessee (or the deductor) of .....

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t has the effect of enhancing the assessment or reducing a refund (already made or otherwise increasing the liability of the assessee or the deductor, the Assessing Officer shall serve on the assessee or the deductor, as the case may be) a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be issued under section 156 and the provisions of this Act shall apply accordingly. (7) Save as otherwise provided in section 155 or sub-section (4 .....

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onths from the end of the month in which the application is received by it,- (a) making the amendment; or (b) refusing to allow the claim." 9. On a reading of Sec.154, what we could gather is that rectification is provided in the Statute for the purpose of rectification of any mistake which is apparent from the record. The Income Tax Authority referred to in Sec.116 is conferred with the power to amend any order passed by it under the provisions of the Act etc. etc. Therefore, the question .....

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re was no mistake apparent from the record so as to invoke Sec.154 of the Act. 10. The learned counsel has invited our attention to the judgment in 'Asian Techs Ltd. v. C.I.T., Cochin' [2000 KHC 846] and contended that the mistake apparent from record is not a clerical or arithmetical error alone that comes within its purview but it also comprehends errors which, after judicious probe into the record from which it is supposed to emanate are discerned. But, after considering the factual c .....

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be investigated cannot be corrected by way of rectification. Therefore, according to us, the said judgment would not render any assistance to the arguments advanced by the learned counsel for the appellant. 11. In our view, the power conferred under Sec.154 is something akin to the power of review conferred on a Civil Court under Sec.114 of the Code of Civil Procedure. By invoking the power of rectification, the ultimate conclusion of a decision cannot be changed. So also, the employment of the .....

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