Time barred Section 115JB effect cannot be given by way of appeal effect

Admittedly, while framing the assessment vide order u/s 143(3) dated 21/3/2014, the assessing officer did not make any reference to section 11 5JB or give any working of section 11 5JB either in the assessment order or the accompanying documents (APB, Pg. 3 to 10). In our view, it is an apparent mistake in the assessment order which ought to be rectified by way of an order under section 154 or section 263 of the Act. Again, the ld. CIT(A) disposing off the appeal vide order dated 8/5/2018, wherein the Section 11 5JB was not an issue in the grounds of appeal before him (APB, 1 1 to 19). However, while giving effect to the order of the ld. CIT(A), the successor assessing officer has applied the provisions of section 115JB for the first time and taxed the assessee on the basis of section 11 5JB. The main contention of the assessee was that section 11 5JB not having been applied or even considered in the assessment order dated 21/3/2014, rectification of the assessment order u/s 154, if permissible, could have been carried out up to 31/3/2018 i.e. four years from the end of the year in which the order sought to be rectified was passed. The issue had thus become time barred and could not be allowed back door entry while giving effect to the order of the ld. CIT(A).

The Ld. CIT(A) after considering the above factual and legal position furnished by assessee through written submission dated 8/6/2019 (APB, 1 & 2) and stands incorporated at para no. 3 at page no. 2 & 3 of the impugned order. However, the ld. CIT(A) stated that after giving appeal effect, the assessed income got converted into loss however the book profit u/s 11 5JB was Rs. 52,28,858 which was higher than the assessed income. And hence the AO rightly calculated the tax liability u/s 115JB in the order giving appeal effect. In our view, the ld. CIT(A) has not appreciated the submissions made that even if there was a mistake, the same could not be rectified while giving appeal effect. Since, the remedy available to the revenue had become time barred as stated above and invoking section 11 5JB through back door by way of giving appeal effect was not justified.