Shilpa Prabhakar Kulkarni Vs DCIT Centralized Processing Centre (ITAT Mumbai)
ITAT Mumbai held that as no claim of the amount of exempted allowance was made in the return of income, the same cannot be rectified as there was no mistake apparent from record in order passed u/s 143(1)(a) of the Income Tax Act.
Facts- The assessee is mainly aggrieved with the rejection of claim of rectification of the assessee and upholding the disallowance of Rs.35,26,484/ – i.e. which was claimed by the assessee as various allowances exempted under the provisions of the Act.
Conclusion- Held that assessee did not make any claim for exempted allowance of Rs.35,26,484/- in the return of income. In our opinion, omission was on the part of the assessee and therefore, there is no mistake in the order passed u/s 143(1) by the CPC. Accordingly, we uphold the finding of the Ld. CIT(A) of rejecting the claim of rectification of order u/s 143(1)(a) of the Act.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal by the assessee is directed against order dated 14.12.2022 passed by the Ld. Commissioner of Income-tax – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] in relation to rectification order passed by the Ld. Central Processing Centre (CPC), Bangalore u/s 154 of the Income-tax Act, 1961 (in short ‘the Act’) for assessment year 2017-18. The grounds raised by the assessee are reproduced as under:
1. On the facts and in the circumstances of the case, and in law, the NFAC erred in upholding the adjustment made by the A by adding an amount of Rs.55,26,484 under the head Salaries
The Appellant prays that such adjustment should be deleted.
2. On the facts and circumstances of the case and in law, the NFAC erred in levying additional interest under Section 234B of the Act.
The Appellant prays that the additional interest levied under Section 234B of the Act ought to be deleted.
3. On the facts and circumstances of the case and in law, the NFAC erred in levying additional interest under Section 234C of the Act.
The Appellant prays that the additional interest levied under Section 234C of the Act ought to be deleted.
4. On the facts and in the circumstances of the case, and in law, the NFAC erred in upholding the adjustment made by the AO of adding an amount of Rs. 35,26,484 which is not an income of the Appellant
The Appellant prays that the income of the Appellant to be correctly computed.
5. On the facts and in the circumstances of the case, the order passed by the NFAC is bad in law as it is passed without providing an opportunity of being heard to the assessee Prayer
The Appellant prays that the CIT(A) order to be considered as bad in law and void ab initio.
6. On the facts and in the circumstances of the case and in law, the NFAC erred in not quashing the rectification order passed under section 154 of the Income-tax Act, 1961 (the Act) (the rectification order’) by the Learned Deputy Commissioner of Income Tax, CPC Bangalore (“AO”) and not treating the same as bad in law and void ab initio.
Prayer
The Appellant prays that the rectification Order is bad in law and void a initio and therefore, liable to be quashed.
7. On the facts and in the circumstances of the case, and in law, the NFAC erred in not treating the rectification order passed by the AO as void ab initio, insofar as it has been passed in complete disregard of the principles of natural justice as, inter alia, the Appellant has not been provided with any opportunity of being heard.
The Appellant prays that the rectification order is declared as void ab initio as it is passed without providing any opportunity of being heard to the Appellant.
8. On the facts and in the circumstances of the case and in law, the NFAC erred in not treating the rectification order bad in law to that extent the income of the Appellant and the tax and the interest thereon have been computed erroneously based on erroneous conclusions and assertions of facts.
The Appellant prays that rectification order is declared as bad in law.
2. In the grounds raised, the assessee is mainly aggrieved with the rejection of claim of rectification of the assessee and upholding the disallowance of Rs.35,26,484/ – i.e. which was claimed by the assessee as various allowances exempted under the provisions of the Act.
3. Briefly stated, the assessee a salaried individual , filed her return of income on 01.08.2017 declaring total income of Rs.1,00,13,220/- out of which salary income offered to tax was of Rs.99,53,508/-. The return of income filed by the assessee was processed by the CPC vide order dated 27.03.2019 , wherein the income under the head ‘salary’ was computed at Rs.1,35,19,922/ – as against the income from salary declared by assessee at Rs.99,53,508/-. In this manner total income was determined at Rs.1,35,41,560/- instead of Rs.1,00,13,220/- disclosed by the assessee. The assessee further filed rectification on 27.06.2019 , wherein the assessee requested that the assessee earned gross salary of Rs.1,35,19,992/ – and out of which claimed exemption u/s 10 of the Act of Rs.3 5,26,484/-, which was inadvertently not reported in the relevant column of the return of income filed i.e. “Schedule 5; details of income from salary”. According to assessee, this was a mistake apparent from record, in the intimation issued u/s 143(1) of the Act and therefore, same was to be rectified by the CPC. However, in the rectification order passed on 27.06.2019, the Assessing Officer rejected the request of the assessee in respect of claim of the exemption of the allowance of Rs.35,20,484/-. Aggrieved , the assessee filed appeal before the Ld. CIT(A) but the Ld. CIT(A) rejected the contention of the assessee observing as under:
6. The grounds of appeal, statement of facts, submissions of appellant and orders/intimations us 143(1) and 154 passed by the CPC are considered. Ground No. 1 to 5 relates and confined to upward variance of income by Rs.35,26,484/ – by the CPC. Accordingly, all the grounds of appeal are adjudicated simultaneously.
6.1. Therefore, The appellant claims that this amount of Rs.35,26,484/ – represents exemption of us 10 of the Act. The appellant submitted detailed working of her taxable income. In view of the said working, the gross total income of appellant for the year under consideration was Rs. 1,35, 19,992/ -. This gross total income is inconformity with the submission of the appellant and details recorded in Form 26AS of the appellant. For the sake of clarity, relevant abstract of form 26AS is reproduced below:
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