ITO Vs Smt. Laxmiben Amratlal Patel (ITAT Surat)
In the case of ITO vs. Smt. Laxmiben Amratlal Patel (ITAT Surat), the Income Tax Department filed a Miscellaneous Application (MA) under Section 254(2), seeking rectification or recall of an earlier tribunal order dated 27.03.2024 for the Assessment Year 2012-13. The department argued that the tribunal had overlooked key facts, specifically regarding the sale of non-agricultural land. It contended that the assessee had sold land valued at ₹2.09 crore but did not declare capital gains, claiming the land was agricultural and exempt. The revenue maintained that the land was a capital asset under Section 2(14)(iii) and that CBDT Circular No. 17/2015 was inapplicable. Based on these arguments, the revenue sought a review and re-adjudication of the appeal.
However, the tribunal rejected the revenue’s application, stating that Section 254(2) allows rectification of mistakes apparent on record, not a review of a decided matter. It noted that the case was already remanded to the Assessing Officer (AO) for verification of the land’s distance from the municipal limits, in line with CBDT Circular No. 17/2015. Additionally, the tribunal cited legal precedents, including the Gujarat High Court’s decision in Vrundavan Ginning and Oil Mills vs. ACIT, which clarified that mere conversion from agricultural to non-agricultural land does not alter its classification for tax purposes. The tribunal concluded that the revenue was effectively seeking a review, which is beyond its jurisdiction under Section 254(2). Accordingly, the Miscellaneous Application was dismissed.
