The Income Tax Appellate Tribunal (ITAT), Ranchi has held that the Assessing Officer is not empowered to make addition while considering a rectification application under section 154 of the Income Tax Act, 1961.
The sole grievance of the assessee was that the Assessing Officer made an addition of Rs.9,60,672.97 relating to service tax by invoking the provisions of section 43B and also made addition of Rs,.15,53,218 on account of job work charges by invoking the provisions of section 40(a)(ia) of the Act in the proceedings which was initiated under section 154 of the Act.
After considering the contentions from both the sides, the Tribunal held that the additions under appeal were made in the proceedings initiated under section 154 of the Act.
“Section 154 allows rectification of a mistake apparent from the record. Thus, an issue for adjudication of which investigation of further facts, which is not on record is required or an issue on which two views are possible are clearly out of the ambit of section 154 of the Act,” the Tribunal said.
“A perusal of provisions of section 194C of the Act shows that a person is liable to deduct ITDS when a contract for work is of an amount more than Rs.30,000/- or where payment for work is made to a person more than Rs.75,000/- during the financial year. The Assessing Officer has brought no material on record to show that either of the above condition was satisfied in the instant case. Therefore, it is not open to the Assessing Officer in a proceedings u/s.154 of the Act to hold that the assessee was obliged to deduct ITDS on job work and consequently, the disallowance made u/s.40(a)(ia) of the Act is outside the jurisdiction of section 154 of the Act,” the Tribunal added.
