Kulandaivel Thaalamuthu Vs ACIT (ITAT Chennai)
The appeal concerns the assessment year 2016-17 and challenges an order dated 23 October 2024 of the Commissioner of Income Tax (Appeals), NFAC, confirming the rejection of a rectification application under Section 154 of the Income Tax Act. The assessee, engaged in the transportation business under the name “Sri Ram Transport,” filed his return on 7 March 2017 declaring income of ₹3,50,610, computed presumptively under Section 44AE. The case was selected for limited scrutiny to verify whether contract receipts were correctly offered. During assessment, the assessee stated he was operating four LPG goods vehicles and therefore eligible for presumptive taxation under Section 44AE, which applies when the taxpayer owns not more than ten goods carriages. He submitted copies of the registration certificates and later provided a work order in response to queries under Section 142(1).
Within 18 days of the assessment order, the assessee filed a rectification request under Section 154, asserting that applying Section 44AD was incorrect because Section 44AE was the applicable provision. The AO rejected the rectification request in June 2020, holding that the issue was debatable and therefore beyond Section 154. The NFAC upheld the AO’s decision, finding no mistake apparent from the record and advising that the matter was appealable and not rectifiable.
