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Assistant Commissioner of Income Tax Versus Rupam Impex

2016 (1) TMI 1114 - ITAT RAJKOT

Rectification of mistake - net profit as per profit and loss account is ₹ 1,94,33,895 and that the depreciation as per books of accounts, which is required to be added back to the profit as per profit an dloss account, is ₹ 3,20,466 and not ₹ 32,40,466 - Held that:- The fact that mistake has occurred is beyond doubt. The fact that it is attributed to the error of the assessee does not obliterate the fact of mistake or legal remedies for a mistake having crept in. It is only ele .....

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te of Art. 265 of the Constitution of India. A sense of fairplay by the field officers towards the taxpayers is not an act of benevolence by the field officers but it is call of duty in a socially accountable governance. If authority is needed even for justifying this approach to the taxpayers, one need not look beyond the circulars issued by the CBDT itself. - One can understand the young Assessing Officers being overzealous in their approach and making such mistakes, something is needed to .....

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s in this case, we must put in a word of caution here. There has to be proper mechanism to ensure that such frivolous appeals are not filed. However, if that does not happen and these frivolous appeals continue to clog the system, it is only a matter of time that the Tribunal starts awarding costs, in such cases, as a measure to deterrence to the officers concerned. We hope that does not happen. - Decided against AO - 472/Rjt/2014 - Dated:- 21-1-2016 - Pramod Kumar AM and S S Godara JJ For the A .....

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akes under section 154 2. That on the facts and in the circumstances of the case, the learned CIT(A) ought to have upheld the border of the Assessing Officer 3. Briefly stated, the relevant material facts are like this. In the assessment order dated 26th July 2010, passed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961, the Assessing Officer computed assessed income of the assessee as follows: 5. With the above remarks (which are not relevant in the context of this appe .....

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which is starting point of the computation of taxable income, is ₹ 1,94,33,895. It was also pointed out that the depreciation as per books of accounts, which is required to be added back to the profit as per profit an dloss account, is ₹ 3,20,466 and not ₹ 32,40,466. The Assessing Officer was, accordingly, urged to rectify the mistake apparent on record. However, the Assessing Officer rejected this request primarily on the ground that the assessee himself has computed the incom .....

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₹ 3,20,466 However, it is further seen that the income finally assessed by the AO is the same as returned by the assessee itself, vide its return of income for the assessment year 2008-09. The computation forming part of the assessment order is also found to be identical to the computation of income for the AY 2008-09 as filed by the assessee during the assessment proceedings. 5. Aggrieved, assessee carried the matter in appeal before the CIT(A) who reversed the action of the Assessing Of .....

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ve discussion, the AO is not correct in refusing the rectification of the appellant, and, I, therefore, direct the AO to rectify the mistakes under section 154… 6. The matter does not end here. The Assessing Officer is not satisfied with the relief so granted by the CIT(A) and is in appeal before us. 7. When this appeal was called out for hearing, Shri Anjaria, learned Departmental Representative, still proceeded with justifying the stand of the Assessing Officer. When we put it to him as .....

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of profit and depreciation amounts to a new claim by the assessee which cannot be made except through a revised return. He submits that since the claim of the assessee, as made in the income tax return, was accepted and the assessee could not have made a fresh claim, without a revised return, the Assessing Officer was justified in not adopting the figures of the profit and depreciation as per profit and loss account on record. He vehemently supports and justifies the stand of the Assessing Offi .....

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o be, in the computation of income by the assessee- though wrongly, the profit as per profit and loss account, but clearly at variance with the profit and loss account on the assessment record. Clearly, the Assessing Officer did not even apply his mind to the material on record. He did a simple cut and paste job from the statement of taxable income filed by the assessee. The starting point of his computation of income was incorrect, he accepts it but still fights shy of giving effect to the natu .....

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complete non application of mind to the facts and making a mockery of the scrutiny assessment proceeding itself, the Assessing Officer has justified the mistake on record on the ground that it is attributed to the assessee. The income tax proceedings are not adversarial proceedings. As to who is responsible for the mistake is not material for the purpose of proceedings under section 154; what is material is that there is a mistake- a mistake which is clear, glaring and which is incapable of two .....

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er amount or at a higher rate merely because the assessee, under a mistaken belief or due to an error, offered the income for taxation at that amount or that rate. It can only be levied when it is authorised by the law, as is the mandate of Art. 265 of the Constitution of India. A sense of fairplay by the field officers towards the taxpayers is not an act of benevolence by the field officers but it is call of duty in a socially accountable governance. If authority is needed even for justifying t .....

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in the matter of claiming and securing any relief and in this regard the officers should take initiative in guiding the taxpayer where proceedings or other particulars before them indicate that some refund or relief is due to him. This attitude would in the long run benefit the Department for it would inspire confidence in him that he may be sure of getting a square deal from the Government." 10. It is heartening to note that the CBDT has given such humane guidance to the field officers. T .....

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udicial system does not do any of us any good. The well meaning advice given by the CBDT must be implemented to the fullest extent. As to what is binding nature of this advice, we may only refer to s. 119 of the Act and Hon ble Supreme Court s judgment in the case of UCO Bank vs. CIT [(1999) 237 ITR 889 (SC)]. Hon ble Supreme Court has time and again held that the circulars of the CBDT are legally binding on the Revenue and that this binding character attaches to the circular even if they be fou .....

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