The Chennai Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the case to the Commissioner of Income Tax (Appeals) (CIT(A)) for further adjudication regarding the Assessing Officer’s ( AO ) corrigendum in the tax assessment order for the assessment year ( AY ) 2017-18.
The Revenue appellant challenged the CIT(A) order dated December 12, 2023, related to the assessment year ( AY ) 2017-18.In this case,Rajkumari,respondent-assessee,submitted her return of income for the assessment year 2017-18 on March 31, 2018, under Section 139 of the Act. After processing the return under Section 143(1), her case was selected for scrutiny assessment, leading to notices under Sections 143(2) and 142(1) of the Act.
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The assessee provided all required details, including financial statements and confirmations from creditors. On December 20, 2019, the AO completed the assessment under Section 143(3), accepting an income of Rs. 6,37,862, despite her initially reporting Rs. 3.25 lakhs. Subsequently, on December 21, 2019, the AO issued a corrigendum, revising the assessed income to Rs. 2,28,54,344 by adding Rs. 2,25,29,344 under various heads.
The assessee contested the corrigendum issued by the Assessing Officer ( AO ) to the order under Section 143(3) dated December 21, 2019, before the Commissioner of Income Tax (Appeals)[CIT(A)]. She asserted that the corrigendum contradicted the original assessment order and was, therefore, invalid and contrary to the principles of natural justice.
The CIT(A), after reviewing the AO’s grounds, concluded that the AO did not possess the authority to withdraw, modify, or replace a previously issued assessment order. As a result, he quashed the corrigendum. The Revenue, feeling aggrieved by this decision, subsequently filed an appeal before us.
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The tribunal examined the competing arguments and the case details. The assessee reported an income of Rs. 3.25 lakhs in her return, but the AO accepted a figure of Rs. 6,37,862 in the assessment order dated December 20, 2019. The corresponding demand notice, however, indicated additional assessments amounting to Rs. 2,25,29,344.
The initial assessment focused on cash deposits made during the demonetization period. The AO later issued a corrigendum on December 21, 2019, which included significant additions across multiple categories. The tribunal noted that the assessment order mistakenly cited the return filing date as November 7, 2016, instead of March 31, 2018.
It appeared that the original assessment contained details relevant to another taxpayer, while the corrigendum aligned with the actual computation sheet. The tribunal referenced the Supreme Court case Kalyankumar Ray vs. CIT, highlighting the integrated nature of the assessment process and validating the AO’s corrective actions. Additionally, it noted the Madras High Court’s ruling affirming the legality of corrigenda for rectifying errors.
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The two member bench comprising Mahavir Singh ( Vice President ) and Manoj Kumar Aggarwal ( Accountant Member ), the remanded the matter to the CIT(A) for adjudication, allowing the assessee the opportunity to present her case ,since the CIT(A) did not consider the merits of the case.
Ultimately, the tribunal allowed the Revenue’s appeal for statistical purposes.
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