Rectification of Order Passed U/s 147 r.w.s. 144 read with Section 144B of the Income Tax Act, 1961

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This discussion addresses an issue where an Income Tax assessment order under Section 147, read with Sections 144 and 144B of the Income Tax Act, 1961, failed to grant credit for Tax Deducted at Source (TDS). The assessee, a retired employee diagnosed with cancer, could not respond to notices. While rectification via Section 154 is typically for specific intimations, the complexity here, involving a faceless assessment unit, complicates direct rectification. Options discussed include appealing to the Commissioner Appeals, seeking revision, and attempting rectification through the Jurisdictional Assessing Officer (JAO), though the latter faced challenges due to the assessment unit's order being passed by a faceless entity, with rectification rights potentially with the CPC. An appeal to the CIT(Appeals) was ultimately filed, and a stay of demand was also requested.

Ankit Tantia

Ankit Tantia (Querist)
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23 March 2023 Dear Experts,

The assessment unit of the Income Tax Department has passed order U/s 147 r.w.s. 144 read with Section 144B of the Income Tax Act, 1961 in respect of A.Y. 2018-19 but the credit of tax deducted at Source has not been given in the assessment order.

Assessee is a retired employee and did not file his return for AY 2018-19, neither U/s 139 nor U/s 148. The assessee could not response to any notices issued by the Department till date as he is diagnosed with Cancer.

Whether apart from Appeal to Commissioner Appeals and Revision U/s 234, any other options available so that the assessee gets the credit of Tax deducted at Source as the same is reflected in Form 26AS.

Whether the order U/s 147 r.w.s. 144 read with Section 144B be rectified U/s 154 by making an application to the Jurisdictional Assessing Officer?

Note: In Income Tax Portal facility for rectification U/s 154 is available only for intimations issued U/s 143(1).

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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24 March 2023 The order U/s 147 r.w.s. 144 read with Section 144B be rectified U/s 154 by making an application in writing to the Jurisdictional Assessing Officer.
Simultaneously file appeal.

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Ankit Tantia

Ankit Tantia (Querist)
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24 March 2023 The Jurisdictional Assessing Officer is not able to rectify the order...the demand is not reflecting in his system...

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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24 March 2023 Who passed the order.

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Ankit Tantia

Ankit Tantia (Querist)
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24 March 2023 The order was passed by Assessment Unit( Faceless) and the rectification rights are with CPC.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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24 March 2023 Rectification Proceedings.

7. (1) With a view to rectifying any mistake apparent from the record the National Faceless Appeal Centre may amend any order passed by it, by an order to be passed in writing.

(2) Subject to the other provisions of this Scheme, an application for rectification of mistake referred to in sub-paragraph(1) may be filed with the National Faceless Appeal Centre by the, —

(a) appellant or any other person, as the case may be; or
(b) appeal unit preparing or reviewing or revising the draft order; or
(c) the [National Faceless Assessment Centre] or the Assessing Officer, as the case may be.
(3) Where any application referred to in sub-paragraph (2) is received by the National Faceless Appeal Centre, it shall assign such application to a specific appeal unit in any one Regional Faceless Appeal Centre through an automated allocation system.

(4) The appeal unit shall examine the application and prepare a notice for granting an opportunity-

(a) to the appellant or any other person, as the case may be, where the application has been filed by the [National Faceless Assessment Centre] or the Assessing Officer, as the case may be; or
(b) to the [National Faceless Assessment Centre] or the Assessing Officer, as the case may be, where the application has been filed by the appellant or any other person, as the case may be; or
(c) to the appellant or any other person, as the case may be, and the [National Faceless Assessment Centre] or the Assessing Officer, as the case may be, where the application has been filed by an appeal unit referred to in clause (b) of sub-paragraph (2); and
send the notice to the National Faceless Appeal Centre.
(5) The National Faceless Appeal Centre shall serve the notice referred to in sub-paragraph (4) upon the appellant or any other person, as the case may be, or the [National Faceless Assessment Centre] or the Assessing Officer, as the case may be, calling upon him to show cause as to why rectification of mistake should not be carried out under the relevant provisions of the Act.

(6) The appellant or any other person, as the case may be, or the [National Faceless Assessment Centre] or the Assessing Officer, as the case may be, shall file a response to the notice, as referred to in sub-paragraph (5), within the date and time specified therein, or such extended date and time as may be allowed on the basis of an application made in this behalf, to the National Faceless Appeal Centre.

(7) Where a response, as referred to in sub-paragraph (6), is filed by the appellant or any other person, as the case may be, or the [National Faceless Assessment Centre] or the Assessing Officer, as the case may be, the National Faceless Appeal Centre shall send such response to the appeal unit, or where no such response is filed, inform the appeal unit.

(8) The appeal unit shall, after taking into consideration the application and response, if any, filed by the appellant or any other person, as the case may be, or the [National Faceless Assessment Centre] or the Assessing Officer, as the case may be, prepare a draft order, —

(a) for rectification of mistake; or
(b) for rejection of application for rectification, citing reasons thereof;
and send the order to the National Faceless Appeal Centre.

(9) The National Faceless Appeal Centre shall upon receipt of draft order, as referred to in sub-paragraph (8), pass an order as per such draft and communicate such order, -

(a) to the appellant or any other person, as the case may be; and
(b) to the [National Faceless Assessment Centre] or the Assessing Officer, as the case may be, for such action as may be required under the Act.

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PARAS CHHAJED

PARAS CHHAJED

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13 May 2023 Is the assessee aggrieved with assessment of income ? Is he willing to challenge jurisdiction, legality of reassessment proceedings ? Is there any addition or disallowance which in the opinion of the assessee is not correct on facts or in law ? If so, then an appeal may be preferred before the CIT (appeals) within 30 days from date of receipt of Assessment Order and Demand Notice by filing Form No. 35 electronically.

What I could understand from the query is that the only grievance is that the credit for TDS is not given though it is appearing in Form 26AS and consequently there must be excess interest charged u/s 234A and 234B. To my knowledge, this type of error may be rectified by the Jurisdictional Assessing Officer (JAO) only because as of now there is no mechanism available to make an application for rectification to the National Faceless Assessment Centre.

The CPC transfers rectification rights to JAO and at times it may take some time for the same . However, on receipt of application for rectification by JAO he may make a requisition to CPC to transfer rectification right to him to enable him to process rectification application.

Mr. Seetharamanji has mentioned the procedure for rectification of mistakes in the order of CIT (Appeals) and there is now mechanism to make application online.

In the meantime I would suggest raising a grievance to CPC-ITR and also to disagree with the demand raised giving reason that credit for TDS has not been given and interest is charged excessively.

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Ankit Tantia

Ankit Tantia (Querist)
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15 May 2023 Dear Paras Sir,

The petition for rectification was made to the Jurisdictional Assessing Officer (JAO) but CPC did not transfer rectification rights to JAO. So at last Appeal was filed with CIT (Appeals). The communication window with CIT (Appeals) has started and I had one more query whether the petition for stay of demand needs to be submitted with the CIT appeals as the communication window has started.

An application for stay of demand has already been made to JAO at he time of filing of Appeal.

P.S. 20 percent of demand has not been paid rather the total tax due after deducting TDS has been paid.

PARAS CHHAJED

PARAS CHHAJED

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15 May 2023 When the assessed income is not in dispute i.e. any addition or disallowance made in the assessment proceedings has been accepted, the assessment order is not appealable merely because of excess charge of interest or incorrect tax computation which is always subject to rectification within 4 years from the end of the assessment year in which the order sought to be rectified was passed.

Once you have paid entire tax demand after self setting of the TDS there is no case for recovery of tax demand . You should provide the details of TDS claim and balance tax deposited against the outstanding tax demand.

The recovery of tax demand is to be pursued by JAO whom you should intimate that out of the total tax demand raised after reductio of TDS already made, the balance tax due with interest correctly computed has been paid and thus there remains no demand to be paid.

Since the appeal has been filed, the communication window is opened indue course against which you may submit your arguments. Opening of communication window in not substitute to issue of notice for hearing, u/s 250. Response made in communication window may be may not be considered as compliance to notice u/s 250.

You should request the JAO to make a requisition to CPC to transfer rectification rights to JAO.

An application for stay of demand may be filed with CIT(A) as well as he holds all powers in respect of an assessment which JAO holds. He may even enhance the income, of course, after giving an opportunity of being heard.

Also raise grievance to CPC so that rectification rights are transferred to JAO.

Ankit Tantia

Ankit Tantia (Querist)
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15 May 2023 After making application for Rectification of order to JAO, I have repeatedly asked the JAO for transfer of Rectification rights but as per JAO it is not yet transferred.

With no recourse available I preferred appeal.

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