AO cannot rectify an issue which already decided by way of appeal by CIT(A): ITAT deletes addition [Read Order]

The two member bench of Delhi Income Tax Appellate Tribunal ( ITAT ) ruled that the assessing officer could not rectify an issue which had already been decided by way of appeal by the Commissioner of Income Tax (Appeal).

The Assessee, Anurag Singh case was reopened by issue of notice under Section 148 of the Income Tax Act.The reason for reopening was that, an  AIR in formation had revealed that the appellant had deposited cash amounting to Rs.25,50 ,000/- in his bank account. The Assessing Officer sought the assessee to establish the source of the deposit with documentary evidence.

The assessee  before the AO stated that the amount of Rs.25 ,50,000/- had been received from 4 relatives.Accordingly without considering the submission the AO made addition of Rs.3 ,55,000/- .

Aggrieved with the addition of Rs.3 ,55,000/- the assessee filed appeal filed before the Commissioner of Income Tax , CIT(A) deleted the addition made by the Assessing Officer o f Rs.3 ,55,000/- holding that the assessee has furnished relevant confirmations.

On 30 .03.2021, the Assessing Officer passed an order under section  154 of the Income Tax Act determining the assessed income at Rs .35,93 ,660/- against the returned income determined by the AO of Rs.6 ,88,660/- vide Assessment Order dated 17 .11.2017.

Aggrieved, the assessee filed an appeal before the CIT(A) against the order of rectification passed under Section  154 of the Income Tax Act.

The CIT(A), National Faceless Appellate Center NFAC affirmed the order of the Assessing Officer passed under Section  154  of the Income Tax Act holding that the AO has not given any finding about acceptance o f evidence/explanation o f the assessee in respect of the source of cash deposit o f Rs.25 ,50,000/- and it is an apparent mistake amenable to rectification under Section 154 o f the Income Tax Act.

Aggrieved, the assessee filed an appeal before the Tribunal

During the adjudication Kanika Gupta, the counsel for assessee  submitted that the order under Section  154 of the Income Tax Act cannot be passed after the passing of the order by the CIT(A) as per the provisions of Section 154(1A) of the Income Tax Act.

Amit Katoch, Counsel for Revenue supported the order of lower authorities and argued that he provisions of Section 154(1A) do not impede the rectification carried by the AO which is prima facie mistake of taking the figure o f Rs.3 ,55 ,000/- instead of Rs.25 ,50,000/-.

The tribunal observed that the provisions o f Section 154 stipulates that the Assessing Officer is an empowered to rectify any mistake apparent from the record under Section  154(1) and as per Section 154(1A), the Assessing Officer is also no t empowered to rectify any matter that has been considered and decided in any proceeding by way of appeal.

Hence  the rectification undertaken by the Assessing Officer has already been an issue considered and decided by the  CIT(A).

After reviewing the facts the ITAT bench of Anubhav Sharma(Judicial Member) and Dr. B. R. R. Kumar(Accountant Member)  allowed the appeal filed by the assessee.

To Read the full text of the Order CLICK HERE

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