Tax Calculation Error in Form No 5 issued by PCIT cannot be Rectified by AO invoking Provision of Section 154 of Income Tax Act: ITAT [Read Order]

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that the tax calculation error in Form No 5 issued by Principal Commissioners of Income Tax (PCIT) cannot be rectified by the Assessing Officer invoking the provision of Section 154 of Income Tax Act, 1961.

The assessee nor any authorized representative appeared nor any adjournment application has been filed despite several notices. The appeal can be disposed of ex-parte qua assessee after hearing the arguments of the Senior Departmental Representative. Therefore, it proceeded to adjudicate the appeal ex-parte qua assessee.

The main contention of the assessee is that the Assessing Officer is not validly empowered and entitled to rectify or modify form no 5 issued by Principal Commissioners of Income Tax as per the hierarchy of the Departmental structure, therefore, the rectification order is invalid and bad in law and should be held as without jurisdiction and not sustainable as per provisions and scheme of the Income Tax Act.

The Senior Departmental Representative supported the action of the Assessing Officer and submitted that as per question no. 46 in the clarification issued by the CBDT, the DA can amend his order under clause 5 to rectify any apparent errors.

Hence the claim of the assessee that the order passed under Section 5(2) of the VSVS scheme is conclusive is not correct. Because in the case under reference there is an apparent error with regard to the rate at which tax is chargeable.

The Two-member bench comprising of Chandra Mohan Garg (Judicial member) and Pradip Kumar Kedia (Accountant member) held that the Assessing Officer is not validly entitled and empowered to rectify the mistake of his super senior officer.

Therefore, it was inclined to hold that the impugned rectification order under Section 154 of the Income Tax Act is without jurisdiction, invalid, bad in law, and not sustainable. Thus, the order was set aside and the appeal of the assessee was allowed.

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