TMI Blog2016 (4) TMI 1363X X X X Extracts X X X X X X X X Extracts X X X X ..... the order passed u/s 143(3) in as much as the scope of such assessment is limited to bringing to tax the income which has escaped assessment made originally inter alia u/s 143(3) and the theory of doctrine of merger does not apply in the case of assessment made u/s 143(3) originally and the assessment made subsequently u/s 143(3)/147. Both these assessments stand independently on their own footing. We therefore find ourselves in agreement with CIT(A) that the application filed by the assessee for rectification u/s 154 was barred by limitation and the action of AO in rejecting the same was justified on this ground also. As rightly held by AO as well as by CIT(A), the issue as to whether the amount paid by the assessee on account of lorry hire charges is in the nature of works contract as covered by section 194C or in the nature of rent as envisaged u/s 194I is highly a debatable issue and the rectification of the same is beyond the purview of section 154, the scope of which is very limited. We, therefore do not find any infirmity in the impugned order of ld. CIT(A) upholding the order passed by AO whereby he rejected the application of the assessee for rectification on the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determined by him at ₹ 1,35,13,044/-. Thereafter an application u/s 154 was moved by the assessee before AO on 12.11.2014 claiming that the payments made on account of tanker hire charges not being in pursuance of any contractual obligation, section 194C had no application and the order of AO passed u/s 143(3)/147 in not considering this aspect was wrong. The AO did not find any merit in the application filed by the assessee u/s 154 for rectification. According to him, the issue relating to disallowance u/s 40(a)(ia) on account of tanker hire charges having been decided in the assessment by the AO, after having applied his mind to all the facts and circumstances of the case and such disallowance having been already confirmed by CIT(A), there was no case of rectification on this issue u/s 154, scope of which is limited in as much as it does not permit the review of order on any point. Accordingly the application moved by the assessee u/s 154 was rejected by the AO vide his order dated 12.12.2014. 3. Against the order passed by the AO u/s 154, an appeal was preferred by the assessee before ld. CIT(A) and the following submissions were made on behalf of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er u/s 154 dated 12.12.2014, the AO held that the order u/s 147/143(3) dated 24.12.2010 could not be rectified as the AO and CIT(A) applied their mind for disallowing the expenditure. The AO actually made the mistake which is sought to be rectified. Therefore, application of mind of AO cannot stand in the way of rectification of mistake apparent from record. Before the CIT(A) in appeal against order u/ s 143(3) it was mainly argued that section 40(a)(ia) is not applicable in the A. Y. 2005-06 and the provisions of that section are unconstitutional. No other issue was argued before the CIT(A) and thus was not discussed or dealt with by the CIT(A). Thus the issue of apparent mistake in considering hire charges as exigible u/ s 194C was not considered at all by the CIT(A) and hence cannot be said to have vetted by CIT(A). The AD's other contention that the order passed u/ s 147 is not to grant relief to the assessee, cannot hold good because rectification of mistake is permissible in all circumstances and if such rectifications works out to a lesser tax liability of assessee, then that cannot be overlooked. There is no estoppels against law and there is no law to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for amendment of the order under section 143(3) read with section 147 dated 24th December 2010 requesting the Assessing Officer to delete the addition made under section 40(a)(ia) amounting to ₹ 1,12,73,815/-. If the application was considered to be relating to the order passed u/s 143(3) r.w.s.147 dated 24/12/2010,the Assessing Officer has not made any such addition in the assessment order dated 24.12.2010. Therefore, the appellant's contention that the addition made under section 40(a)(ia) required to be rectified u/s 154 does not arise, since there is no mistake in the order which require rectification. The third argument of the appellant's authorized representative was that the order passed u/s 143(3) dated 18/12/2007 got merged with the order passed u/s 143(3) r.w.s 147 dated 24/12/2010 by the theory of doctrine of merger and the time limit for rectification should be reckoned from the date of passing the reassessment order dated 24/12/2010 not from the date of original assessment. The appellant contended that order passed under section 143(3) dated 18.12.2007 steps into the shoes of the order under section under section 143(3) read with secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing various contentions. The main plank of his argument is that the payments made by the assessee on account of tanker hire charges were in the nature of rent as envisaged in section 194I and not in the nature of works contract covered u/s 194C as taken by the AO and since the expenditure incurred on rent was not covered by the provision of section 40(a)(ia) as applicable to the year under consideration, the disallowance made by AO u/s 40(a)(ia) was patently wrong. According to him, there was thus a mistake apparent from records in the order of AO which is liable to be rectified u/s 154. We are unable to accept this contention of the learned counsel for the assessee for the reasons more than one. Firstly the disallowance u/s 40(a)(ia) on account of tanker hire charges was made by AO in the order passed u/s 143(3) on 18.12.2007 and not in the order passed u/s 143(3)/147 on 24.12.2010 and as rightly held by CIT(A), the application filed by the assessee for rectification u/s 154 of the order passed by AO on 18.12.2007 was clearly barred by limitation as per subsection (7) of section154 which provides that no amendment u/s 154 shall be made after expiry of four years fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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