$~2
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% DECIDED ON: 06.05.2014
+ ITA 199/2014
PAWAN KUMAR AGGARWAL ..... Appellant
Through: Mr. Ved Jain with
Mr. Pranjal, Advocates.
versus
COMMISSIONER OF INCOME TAX ..... Respondent
Through: Mr. Rohit Madan, Sr. Standing Counsel
with Mr. Akash Vajpai, Advocate.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE VIBHU BAKHRU
MR. JUSTICE S.RAVINDRA BHAT (OPEN COURT)
ADMIT.
1. Issue notice. Mr. Rohit Madan, Sr. Standing Counsel accepts
notice on behalf of the respondent.
2. The question of law which arises for consideration is, "whether
the ITAT fell into error in rejecting the assessee's claim for credit of
Securities Transaction Tax (STT), proof of which was concededly
attached to the return."
3. The relevant facts are that the assessee reported a total income
of `34.56 lakhs for AY 2008-09. The income tax payable including
ITA 199/2014 Page 1
surcharge and education cess was `1,16,950/-. In the computation of
income, the assessee failed to disclose the STT paid to the tune of
`18,93,867/-. Instead of disclosing it as STT paid, the amount was
erroneously mentioned as TDS. The AO rejected the assessee's
application, in the form of letter of 22.11.2012, whereby the assessee
requested rectification of the intimation. The AO's order of 16.1.2013
was unsuccessfully appealed. The assessee further appealed to the
ITAT which rejected its contentions, by the impugned order. The
ITAT was of the opinion that the assessee mentioned that the income
arising out of transaction chargeable to STT chargeable under the
head 'profits and gains of business or profession' included in the
gross income was shown to be NIL and that the tax payable on that
amount at an average amount of tax was also NIL and consequently
the rebate allowable under Section 88E was likewise zero. The ITAT,
therefore, reasoned as follows: -
"That when in the return of income the assessee himself has
mentioned that the income arising from the transaction
chargeable to securities transaction tax is nil and the rebate
allowable under Section 88E is nil, then, the Assessing Officer
cannot be said to have committed any error in the intimation
under Section 143(1) in not allowing rebate under Section 88E.
·That under Section 154, the jurisdiction of the Assessing
Officer is to rectify the mistake apparent from the record.
Under Section 143(1), the Assessing Officer has processed the
return as furnished by the assessee. Therefore, the mistake is to
be seen in the light of the return filed by the assessee. If the
assessee has committed any mistake in filling the return of
income, the same cannot be rectified by the Assessing Officer
under Section 154. The assessee contended that the STT paid by
the assessee was filled in the wrong column, i.e., in the column
of TDS. However, we find that from the details as furnished in
ITA 199/2014 Page 2
the column of TDS, it cannot be inferred by the Assessing
Officer that it is STT. Moreover, as we have already mentioned
that for the purpose of Section 88E, mere payment of STT
would not entitle the assessee to claim the rebate. The assessee
would be entitled to rebate only if the total income of the
assessee included the income arising from the taxable
securities transactions. In the return of income, the assessee
himself has mentioned the income arising from transactions
chargeable to securities transaction tax to be nil. In the
computation of income also, there is no mention about any such
income. The assessee has claimed to have furnished the
certificate of STT collected by Adroit Financial Services Pvt.
Ltd. However, the certificate only mentions the transaction
entered into by the assessee but it nowhere mentions the income
arising from such transaction."
4. It is urged by the learned counsel that the Tribunal fell into an
error in overlooking Section 154(1)(b) of the Income Tax Act, 1961,
which allows the amendment of even intimation or deemed intimation
under Section 143 (1) of the Act. The counsel also relied upon
Section 154 (1A) of the Act to say that even after decision in any
proceeding by way of an appeal or revision, it is upon the assessee or
the party concerned to seek recourse to Section 154 (1). He relied
upon the ruling reported as Commissioner of Income Tax v. Sam
Global Securities Ltd., 2013 (9) TMI 876 (Delhi).
5. The learned counsel for the Revenue urged that this Court
should not interfere with the findings of the Tribunal since the
assessee was at fault and had in the income tax return form at the
appropriate place mentioned the TDS to be `18,93,867/- which was
found to be inaccurate. In these circumstances, there was no question
of any error or mistake on the part of the AO which could be
ITA 199/2014 Page 3
rectified.
6. Section 154 to the extent it is relevant is extracted below: -
"Rectification of mistake.
154. [(1) With a view to rectifying any mistake apparent from the
record an income-tax authority referred to in section 116 may, -
(a) amend any order passed by it under the provisions of this Act ;
[(b) amend any intimation or deemed intimation under sub-
section (1) of section 143.]]
[(1A) Where any matter has been considered and decided in any
proceeding by way of appeal or revision relating to an order
referred to in sub-section (1), the authority passing such order
may, notwithstanding anything contained in any law for the time
being in force, amend the order under that sub-section in relation
to any matter other than the matter which has been so considered
and decided.]
(2) Subject to the other provisions of this section, the authority
concerned--
(a) may make an amendment under sub-section (1) of its own
motion, and
(b) shall make such amendment for rectifying any such mistake
which has been brought to its notice by the assessee, and where
the authority concerned is the [***] [Commissioner (Appeals)],
by the [Assessing] Officer also."
It is apparent from the bare reading of the above provision that the
power of rectification extends to amendment of an intimation or
deemed intimation under Section 143. This power enures even after
,,the matter has been considered and decided in any proceeding by
way of appeal or revision. Necessarily, this power extends even at
the stage of the appeal and the further appeal to the ITAT. Even after
such decision, it is open to the AO to amend the intimation under
Section 143 (1) if the circumstances so warrant. We are wholly in
ITA 199/2014 Page 4
agreement with the decision in Sam Global's matter (supra) that the
technicalities in the given circumstances of the case ought not to
obscure the justice. The justice demands, in the peculiar facts of the
case, that there is no impediment to relief. That appears to have been
overlooked in entirety by the lower authorities and the Tribunal had
failed to notice that the controlling expression in Section 154 is not
"an error" which is somewhat coloured by the exercise of power by
the authorities. Instead, the controlling expression is "any mistake"
which has wider connotation and includes mistakes committed by the
parties also.
7. In view of the above discussion, the question of law framed has to
be answered in favour of the assessee and against the Revenue. The
appeal is consequently allowed but without any order as to costs.
S. RAVINDRA BHAT
(JUDGE)
VIBHU BAKHRU
(JUDGE)
MAY 06, 2014
/vks/
ITA 199/2014 Page 5
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