Case Law Details
Smt. Kanta Vs ITO (ITAT Delhi)
In the case of Smt. Kanta vs. ITO (ITAT Delhi), the appeal revolves around the validity of an order passed under section 154 of the Income Tax Act, 1961, concerning the assessment year 2010-11. The crux of the matter lies in the rectification of mistakes apparent from the assessment order, particularly regarding the investment made by the assessee in a property.
The Assessing Officer (AO) initially accepted the income returned by the assessee as nil, after considering all documentary evidence and personal appearances. However, after the assessment was concluded, the AO issued a notice under section 154, contending that the investment in the property was not adequately explained by the assessee during the assessment year. Consequently, the AO made an addition of Rs. 50,00,000/- to the assessee’s income.
In response, the assessee filed an appeal before the Tribunal, challenging the validity of the order passed under section 154. The grounds of appeal included contentions that the issue in question was not a mistake apparent from the record, that the AO attempted to review his own order passed under section 143(3), and that the source of the investment had been explained with proper documentary evidence.
During the proceedings, the Authorized Representative (AR) argued that the source of the investment, which had been accepted by the AO in the original assessment order, could not be revisited under section 154. The AR contended that the AO was attempting to change his view in the guise of rectification of mistakes, which is impermissible under the law. Additionally, the AR cited the precedent set by the Hon’ble Supreme Court in T.S. Balaram, ITO vs. Volkart Brothers (1971) 82 ITR 50, emphasizing that a mistake apparent from record must be obvious and patent, and not a debatable point of law.
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