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Rectification of order passed u/s 144 of it act possible?

Utkarsh (Chartered Accountant) (27 Points)

17 January 2018

THe case of the Assessee was selected for scrutiny u/s 143(3) and Assessee did not received any notice of assessement and intimation isuued by the AO due to shifting of residence address. The AO issued a show cause notice which was also not received by the assessee and due to no response from the assessee the AO completed the assessment u/s 144 of the IT Act (BEst Judgement Assessemnet) disallowing exemption claimed by the assessee u/s 54 for selling and buying new house due to lack of documents of new house. So can this order be rectified u/s 154 by producing the purchase documents of the new house to the AO?

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 17 January 2018

The mistake should be a mistake apparent on record and not a mistake which could be discovered by a process of elucidation, argument or debate. The expression ‘mistake apparent from record’ should not be equated in some aspects with mistake on the face of the record [Arvind N. Mafatlal vs. ITO (1957) 32 ITR 350 (Bom) : TC53R.143].

If in order to discover a mistake some matter or evidence extraneous to the record is required to be looked into, then such a mistake which is not gatherable from the record as it stands cannot be said to be a mistake apparent from the record within the meaning of this section [CIT vs. Harnandrai Shrikishan Akodia (1966) 61 ITR 50 (MP)

For invoking the provisions of s. 154, there has to be a mistake apparent from the record. In other words, a look at the record must show that there has been an error and that error may be rectified, A reference to document outside the record is not permissible. The Supreme Court in CIT vs. Keshri Metal (P) Ltd. (1999) 237 ITR 165 (SC)

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AMAR (ito) (31 Points)
Replied 17 January 2018

you can file appeal before the Ld. CIT(A) against the Order of the AO and u can adduce the additional evidence which has not produced before the AO during the assessment proceedings under rule 46A of the income tax rule 1957 before the CIT(A)

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