INCOME TAX ACT 1961

Section 154

Rectification - Validity - Mere change of opinion -

Assessee filed appeal against the order of CIT(A) confirming the order of rectification which was invalid and bad in law inasmuch as the rectification was carried out on the basis of a mere change in opinion by AO in respect of issues that were already scrutinized in the order passed under section 143(3) and the same could not have been a subject matter of rectification under section 154. Held: In the instant case, AO had not doubted the genuineness of the transaction. Therefore, taking proceedings under section 154 only goes to show that it was only a mere change of opinion, which is outside the mandate of the said section. In the case of ITO v. Volkart Brothers ((1971) 82 ITR 50 (SC) : 1971 TaxPub(DT) 0355 (SC)), it was also held that a mistake apparent on the record must be an obvious and patent mistake and not something which could be established by a long-drawn process of reasoning on points on which there might conceivably be two opinions. Hence, action of CIT(A) confirming the order of rectification could not be held as justified.

Followed:ITO v. Volkart Brothers ((1971) 82 ITR 50 (SC) : 1971 TaxPub(DT) 0355 (SC))

REFERRED :

FAVOUR : In favour of assessee

A.Y. : 2014-2015

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