The Mumbai bench Income Tax Appellate Tribunal (ITAT) directs re-adjudication with respect to rectification application filed for Mistaken in Income Tax Return by the tax consultant.
The Assessee Uttam Narayanmal Mehta’s after filing the return of income the return of income was processed by CPC u/s 143(1) of the Income Tax Act, 1961 and the income got enhanced to Rs 62,78,450/- by making adjustments to the business income of the assessee.
Aggrieved, the assessee t filed a rectification application before CPC u/s 154 which was rejected because the rectification powers of the ITR for A.Y 2018-19 were transferred to the AO.
Thereafter, the assessee had filed another rectification application before the AO and submitted his explanation with support of documentary evidences claiming rectification of a bonafide mistake committed by the tax consultant while filling up the ITR which will be discussed and asserted that it was a mistake apparent from record. However, the aforesaid rectification application filed with the AO was rejected by AO
Aggrieved by the order assesee filed an appeal before the CIT(A). The CIT(A) dismissed the appeal filed by the assessee . Thereafter the assessee filed an appeal before the tribunal.
During the adjudication the counsel for assessee argued that while filing the ITR, his tax consultant had filed an amount of Rs. 64,39,728/- being net profit from profit and loss account for the year in which was absolutely erroneous as the net profit from P&L account for the year ended on 31.03.2018 was Rs.32.18.247/-.
C T Mathews , Department representatives argued that profit of the proprietary concern was calculated twice in the P&L account at the time of the filing of return of income and cannot be treated as a mistake apparent from records. Hence, the AO rejected the rectification application filed by the assessee
The tribunal observed that the AO ought to have examined the plea of the assessee in the light of the TAR/Form 3CD and ought to have verified the facts as to whether the profit of the proprietary concern was calculated twice in the P&L account while filling up the ITR.
In this context, it would be apt to borne-in mind that authorities under the Income Tax Act has to act in accordance with law and collect tax only as provided under the Act.Accordingly If an assessee under a mistake, misconception or on not being properly instructed, is over-assessed, the authorities under the Act are required to assess and ensure that only legitimate tax due are collected.
After analyzing the submission of both parties, the bench comprising Aby T. Varkey (Judicial Member) & S Rifaur Rahman, (Accountant Member) directs readjudication with respect to rectification application filed for Mistaken in Income Tax Return happened by the tax consultant
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