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The Tax PublishersITA No. 893/Kol/2019
2020 TaxPub(DT) 5217 (Kol-Trib)INCOME TAX ACT, 1961
Section 154
Where issue in question was not a mistake apparent on record and that it was a highly debatable issue, the AO was not justified in invoking his power under section 154.
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Rectification - Validity - No mistake apparent on record - Debatable issue
AO passed an order under section 143(3). Thereafter, he passed an order under section 154. In the order passed under section 154, the AO stated that the assessee violated provisions of section 197(1B) as he did not deduct TDS from payment of interest to loan creditors and hence she was liable for disallowance under section 40(a)(ia). Since the said disallowance was not made in the assessment order passed under section 143(3), the same required rectification under section 154. Held: Issue with regard to disallowance under section 40(a)(ia) was highly debatable. Hence, no disallowance could be made in instant case without verification. It was not a mistake apparent on record. Thus, the issue being highly debatable and the same being not a mistake apparent; an order could not have been passed under those circumstances under section 154. A mistake apparent on record should be one which is on the face of the record and which does not require consideration of fresh facts. Accordingly, the order passed under section 154 was quashed.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2007-08
IN THE ITAT, KOLKATA BENCH
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