TMI Blog2017 (5) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... only be collected as per authority of law and if any mistake has crept in the tax-audit report and the assessee comes forward with a bonafide reply, it is the bounden duty of the authorities to consider such reply on merits so that correct taxes can be collected from assessee. It cannot be simply brushed aside at threshold itself without considering the same on merits - the issues under this appeal need to be set aside and restored to the file of the A.O. for de novo determination of the issues on merits after considering the explanations and evidences submitted by the assessee on merits - appeal allowed by way of remand. - I.T.A. No. 7591/Mum/2013 - - - Dated:- 14-3-2017 - Shri C. N. Prasad, Judicial Member And Shri Ramit Kochar, Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment u/ s. 143(3) of 1961 Act was completed on 24the December, 2010 assessing the total income of the assessee at ₹ 42,430/- as against returned income of ₹ 42,430/-. On verification of records, it was seen by the AO from Tax Audit Report in Form No. 3CD that assessee had not added back disallowed expenditure of ₹ 1,18,26,880/ - (Sr. No. 17(f) - Interest on escrow) and ₹ 1,13,718/- (Sr. No. 17(B) - amount inadmissible under section 40(A)(3) of 1961 Act in computation of total income. Thus as per AO , it resulted in understatement of income by ₹ 1,19,40,598/-. Notice u/s. 154 of the 1961 Act dated 19th March, 2012 was issued to the assessee asking for reply with respect to said mistakes in the assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acquiring furniture and fixtures and was not an expenditure of revenue nature and, hence, the said provision was not applicable. The ld. CIT(A) after considering submissions of the assessee held that taxaudit report is certified and signed by the auditors which was based on the audited accounts , which report clearly stated that the amounts as mentioned were inadmissible and not having added back the same in the computation of income which certainly constitutes a mistake apparent from record. As such, the A.O. was not at all in fault having rectified the assessment order u/s 154 of 1961 Act as it is a mistake apparent from records. The ld. CIT(A) accordingly confirmed the rectification order dated 04-05-2012 of the A.O. passed u/s. 154 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... errors had crept in the audit report committed by chartered accountant. The assessee has claimed that reply was duly filed before the AO in rectification proceedings u/s 154 of 1961 Act, which was brushed aside and not considered by AO before passing rectification orders dated 04-05- 2012 u/s 154 of 1961 Act. The assessee also produced detailed reply on merits before the learned CIT(A) in the appellate proceedings and requested for remanding the matter before the AO for consideration of its reply on merits, which again was not considered by learned CIT(A) on merits and order of the AO was merely confirmed. The taxes can only be collected as per authority of law and if any mistake has crept in the tax-audit report and the assessee comes for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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