INCOME TAX ACT, 1961

Section 254(2)

Rectification - Under section 254(2) - No mistake apparent from record - Disputed matter

Tribunal rejected Miscellaneous Application filed by revenue under section 254(2) on the ground of tax effect below Rs. 50 lakhs. Revenue contended that after completion of original assessment under section 143(3), the case was reopened under section 147 on the basis of the audit objections raised by Revenue Audit Party, where audit objections were accepted by department and re-assessment proceedings under section 143(3) read with section 147 was completed and therefore, case fell under the ambit of exception enumerated in CBDT Circular No. 03/2018, dt. 11-7-2018 under clause 10(c). Held: Despite of reply given on oath in proceedings before jurisdictional Bench of High Court where it was admitted that show cause notice given to assessee was not based on Audit Objection and basis of giving show cause notice was based scrutiny of assessment records. Therefore, either affidavit filed by AO was false or the claim in M.A. was false, as both were contrary to each other. The fact of case being reopened on the basis of audit objection was subject-matter of arguments production of further evidences, and not a mistake apparent from records, therefore, recalling of order on the basis of a disputable matter would amount to review of order, which was not permissible under section 254(2). Therefore, Miscellaneous Application of Revenue was dismissed.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2007-08

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