Baani Landbase Pvt. Ltd. Vs DCIT (ITAT Delhi)
Assessee’s assessment u/s 143(3) was completed on 28.12.2017, showing loss of ₹2.04 crore. Later, AO issued notice u/s 148 (30.06.2021) to reopen on the ground that provision for construction expenses ₹9.25 crore & deduction of ₹3.56 crore allowed in the next year had escaped assessment. However, the reopening was dropped on 30.07.2022, as AO himself concluded that the issue did not fall within the meaning of “asset” & hence not a fit case for reassessment.
Subsequently, AO invoked section 154 to “rectify” the same issue, treating it as a “mistake apparent from record” & made addition of ₹3.56 crore. CIT(A)/NFAC upheld the action, terming the lapse curable u/s 292B.
Before ITAT, Assessee argued that rectification on a debatable or previously examined issue cannot be done u/s 154; it amounts to a change of opinion. Tribunal noted that AO’s 154 notice itself stated that “income has escaped assessment,” revealing that the intent was to reassess, not rectify. Such an exercise, after dropping reopening, was impermissible.
Relying on T.S. Balaram v. Volkart Bros. (82 ITR 50, SC), CIT v. Hero Cycles (228 ITR 463, SC), & CIT v. Keshri Metal (104 Taxman 360, SC), the Bench held that only patent, self-evident errors can be rectified u/s 154—not issues requiring detailed reasoning or alternative interpretation.
