Case Law Details
Dariyav Singh Vs ITO (ITAT Delhi)
Income Tax Appellate Tribunal (ITAT) Delhi case, Dariyav Singh Vs ITO, has raised important questions regarding the hierarchy of authority and responsibilities within the tax department. The core of the issue is the question of whether the Assessing Officer (AO) has the power to rectify a mistake made by the Principal Commissioner of Income Tax (PCIT) in form no. 5 under the Vivad Se Vishwas Scheme (VSVS Scheme).
The appellant, Dariyav Singh, contended that the AO lacked the authority to rectify or modify form no. 5 issued by the PCIT. According to the hierarchy of the department, it was argued, such a rectification is invalid and unsustainable as per the Act’s provisions. This argument came after the AO rectified a tax calculation mistake in form no. 5 by invoking section 154 of the Act.
The ITAT, after examining the presented evidence and arguments, concurred with the appellant. The Tribunal found no provision empowering the AO to invoke section 154 of the Act to rectify an error made by a super senior officer, i.e., the PCIT.
Conclusion: This case serves as a significant precedent regarding the powers of different roles within the income tax department’s hierarchy. The ITAT held that the AO was not validly entitled or empowered to rectify a mistake made by the PCIT. Consequently, the impugned rectification order was deemed to be without jurisdiction, invalid, and unsustainable, setting an important precedent for future cases. The judgement underscores the importance of respecting hierarchical structures and powers within the Indian tax system.
FULL TEXT OF THE ORDER OF ITAT DELHI
1. This appeal has been filed against the order of Ld. NFAC, New Delhi dated 01.11.2022 for AY 2012-13.
2. The grounds of assessee are as follows:-
1. That the A.O. was not competent to rectify the order of Principal CIT, Ghaziabad who has issued Form No. 5 if any mistake pointed by the A.O., same can be rectified by the Pr. CIT, Ghaziabad. Therefore, CIT(A), is in error in dismiss the appeal.
2. That declaration filed by the assessee on Form No. 2 and deposited through Form No.
3 which was dully accepted by the Pr. CIT, Ghaziabad, after obtaining the report from A.O. and Addl. CIT, Range – 1, Meerut, Therefore, it cannot be said that the mistake pointed out by the A.O. and he is not competent to rectify the same. Therefore, CIT(A) is in error to dismiss the appeal of the assessee on incorrect fact and law.
3. When the appeal was called for hearing neither the assessee nor any authorized representative appeared nor any adjournment application has been filed despite several notices. However, or perusal of the appeal records and impugned order, we find that the appeal can be disposed of ex-parte qua assessee after hearing the arguments of ld. Senior DR. Therefore we proceed to adjudicate the appeal ex-parte qua assessee.
4. From the grounds raised before ld. CIT(A) as well as before us the main contention of appellant is that the A.O. was not competent. to rectify the order of Principal CIT, Ghaziabad who has issued Form No. 5 if any mistake pointed by the A.O., same can be rectified by the Pr. CIT, Ghaziabad. Therefore, CIT(A), is in error in dismiss the appeal. It is also been contended by the appellant that declaration filed by the assessee on Form No. 2 and deposited through Form No. 3 which was dully accepted by the Pr. CIT, Ghaziabad, after obtaining the report from A.O. and Addl. CIT, Range – 1, Meerut, Therefore, it cannot be said that the mistake pointed out by the O. and he is not competent to rectify the same. Therefore, CIT(A) is in error to dismiss the appeal of the assessee on incorrect fact and law.
5. The ld. Senior DR supported the action of the Assessing Officer and submitted that as per the question no. 46 in the clarification dated 4.03.2020 issued by the CBDT, the DA can amend his order under clause 5 to rectify any apparent errors. Hence the claim of the assessee that the order passed u/s. 5(2) of VSVS scheme is conclusive is not correct. Because in the case under reference there is apparent error with regard to rate at which tax is chargeable.
6. On careful consideration of above submission first of all, we find it appropriate to take note of some undisputed facts of the matter. We note that as per letters 06.2023 of ITO, Ward-1(1)(3) Meerut and written submissions of ld. Senior DR in this case form no. 5 under VSVS scheme was issued by the ld. PCIT Ghaziabad on 13.01.2021 and the Assessing Officer by way of invoking provisions of section 154 of the Act passed impugned order on 20.09.2022 rectifying the tax calculation error in the form 5 issued by ld. PCIT. The main contention of assessee is that the Assessing Officer is not validly empowered and entitle to rectify or modify form no 5 issued by ld. PCIT as per hierarchy of the Departmental structure therefore rectification order is invalid and bad in law and should be held as without jurisdiction and not sustainable as per provisions and scheme of the Act. On being asked by the bench the ld. Senior DR could not assist us as to under which provision the Assessing Officer was empowered to invoke provisions of sec 154 of the Act to rectify the order passed by his super senior officer i.e. ld. PCIT.
7. In our humble view form no. 5 dated 13.01.2021 under VSVS scheme was issued by the ld. PCIT, Ghaziabad and the Assessing Officer rectified tax calculation mistake in the same form by invoking provisions of sec 154 of the Act on 20.09.2022. The Assessing Officer is not validly entitled and empowered to rectify mistake of his super senior officer therefore we are inclined to hold that impugned rectification order dated 09.2022 u/s. 154 of the Act is without jurisdiction, invalid and bad in law thus the same is not sustainable and we set aside the same. Sole grievance of assessee is allowed.
8. In the result, the appeal of assessee is allowed.
Order pronounced in the open court on 01.08.2023.
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