Jana Small Finance Bank Ltd. Vs ITO (ITAT Bangalore)
Section 154 Cannot Be Used to Make Fresh Disallowance of Asset Write-Off Claim: Bangalore ITAT
rectification powers are confined to correcting mistakes apparent from the record and cannot be used to review completed assessments or introduce new disallowances.
In this case, the assessee-bank’s assessment had undergone multiple rounds of scrutiny, appeal and remand. However, in none of the earlier assessment orders passed under section 143(3) did the Assessing Officer raise any objection regarding the claim for loss on write-off of assets. Subsequently, the AO sought to disallow the claim through a rectification order under section 154 and also made consequential adjustments relating to refund and interest.
The Tribunal noted that the alleged omission to disallow the write-off claim in the original assessment could not be treated as a mistake apparent from the record. Whether such a claim is allowable or not requires examination and adjudication and therefore falls outside the limited scope of section 154. A rectification proceeding cannot be converted into a mechanism for revisiting issues that were never the subject matter of the original assessment.
Holding that the disallowance of the loss on written-off assets was beyond the jurisdiction conferred by section 154, the Tribunal quashed that portion of the rectification order. Since the disallowance itself was deleted, the issue relating to levy of interest under sections 234A and 234B was restored to the Assessing Officer for recomputation in accordance with the Tribunal’s findings.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 22/11/2025 in respect of the A.Y. 2014-15.
