Sudarshan Status Corporation Vs DCIT (ITAT Ahmedabad)
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) held that the Assessing Officer could not invoke Section 154 to reclassify income disclosed during a survey under Section 133A from business income to unexplained money under Section 69A taxable under Section 115BBE. The assessee, a real estate partnership firm, had disclosed ₹1.25 crore as additional income during a survey, explaining it as on-money receipts arising from its regular business activities. The amount was duly recorded in the books and accepted as business income during scrutiny assessment under Section 143(3). Subsequently, the Assessing Officer sought to rectify the assessment under Section 154 by treating the disclosure as unexplained income. The Tribunal observed that determining whether survey disclosure constitutes business income or deemed income under Section 69A is a debatable issue requiring examination of facts and legal interpretation. Since Section 154 applies only to apparent and obvious mistakes, the rectification order was held invalid and was consequently quashed.
Core Issue: Whether the Assessing Officer could invoke section 154 to recharacterize income disclosed during a survey and accepted in scrutiny assessment as business income into unexplained money under section 69A taxable under section 115BBE, on the ground that the original assessment contained a mistake apparent from the record.
