Case Note & Summary
The Petitioner, Piramal Investment Opportunities Fund, filed its return of income for Assessment Year 2015-16 on 8 October 2015, disclosing total income of Rs.65,65,84,797 as interest income and paid advance tax of Rs.16,80,00,000. The case was selected for scrutiny, and the Petitioner filed a revised return showing Nil income. The Assistant Commissioner of Income Tax completed the assessment on 30 December 2017 but did not give credit for the advance tax paid. The Petitioner filed an appeal before the Commissioner of Income Tax (Appeals) on the ground that advance tax credit was not given. Simultaneously, on 8 January 2018, the Petitioner filed a rectification application under Section 154 of the Income Tax Act, 1961 before the Assistant Commissioner, pointing out the mistake apparent on record in not crediting the advance tax. The Assistant Commissioner rejected the rectification application by order dated 13 June 2019, holding that since the Petitioner had already filed an appeal on the same issue, it would not be proper to decide the rectification application, citing the doctrine of judicial discipline and that the matter was sub-judice. Aggrieved, the Petitioner filed the present writ petition. The High Court observed that the rectification application was for a mistake apparent on record, i.e., failure to give credit for advance tax paid, which is a separate issue from the merits of the assessment. The Court held that the pendency of an appeal does not bar the Assessing Officer from rectifying a mistake apparent on record under Section 154. The Court set aside the impugned order and directed the Assistant Commissioner to decide the rectification application afresh on merits, in accordance with law, without being influenced by the pendency of the appeal. The Court also noted that the Petitioner had not informed the Assessing Officer about the appeal, but that did not justify rejection of the rectification application.
Headnote
A) Income Tax - Rectification of Mistake - Section 154 of the Income Tax Act, 1961 - Pendency of Appeal - The issue was whether the Assessing Officer can reject a rectification application solely on the ground that an appeal is pending on the same issue. The Court held that the power to rectify a mistake apparent on record under Section 154 is independent and can be exercised even if an appeal is pending, as the rectification application pertains to a different aspect (credit of advance tax) and the mistake is apparent from the record. The Court set aside the impugned order and directed the Assessing Officer to decide the rectification application afresh on merits. (Paras 2-6)
Issue of Consideration
Whether the pendency of an appeal before the Commissioner of Income Tax (Appeals) bars the Assessing Officer from entertaining and deciding a rectification application under Section 154 of the Income Tax Act, 1961 for a mistake apparent on record.
Final Decision
The High Court allowed the writ petition, set aside the impugned order dated 13 June 2019, and directed the Assistant Commissioner of Income Tax-21(2) to decide the rectification application afresh on merits, in accordance with law, without being influenced by the pendency of the appeal before the Commissioner of Income Tax (Appeals).
Law Points
- Rectification under Section 154 of the Income Tax Act
- 1961 is independent of appellate proceedings
- Mistake apparent on record includes failure to give credit for advance tax paid
- Pendency of appeal does not bar rectification of a mistake apparent on record
Case Details
Writ Petition No. 2237 of 2019
M.S. Sanklecha, Nitin Jamdar
Mr. Madhur Agarwal a/w Atul Jasani, for the Petitioner; Mr. Sham Walve, for Respondents
Piramal Investment Opportunities Fund, through its trustees Vistra ITCL India Limited
Assistant Commissioner of Income Tax-21(2), Mumbai; Principal Commissioner of Income-tax – 21; Commissioner of Income-tax (Appeals)-33; Union of India
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Nature of Litigation
Writ petition challenging the rejection of a rectification application under Section 154 of the Income Tax Act, 1961.
Remedy Sought
The Petitioner sought to quash the order rejecting its rectification application and to direct the Assessing Officer to rectify the assessment order by giving credit for advance tax paid.
Filing Reason
The Petitioner's rectification application under Section 154 was rejected by the Assistant Commissioner on the ground that an appeal was pending on the same issue.
Previous Decisions
The Assistant Commissioner of Income Tax passed the assessment order on 30 December 2017 without giving credit for advance tax of Rs.16,80,00,000. The Petitioner filed an appeal before the Commissioner of Income Tax (Appeals) and also a rectification application under Section 154. The rectification application was rejected on 13 June 2019.
Issues
Whether the pendency of an appeal before the Commissioner of Income Tax (Appeals) bars the Assessing Officer from entertaining and deciding a rectification application under Section 154 of the Income Tax Act, 1961 for a mistake apparent on record.
Submissions/Arguments
The Petitioner argued that the failure to give credit for advance tax paid is a mistake apparent on record and the rectification application should be decided on merits irrespective of the pending appeal.
The Respondents contended that since the Petitioner had already filed an appeal on the same issue, it would not be proper for the Assessing Officer to adjudicate the rectification application, following the doctrine of judicial discipline.
Ratio Decidendi
The power to rectify a mistake apparent on record under Section 154 of the Income Tax Act, 1961 is independent and can be exercised even if an appeal is pending on the same issue, as the rectification application pertains to a different aspect (credit of advance tax) and the mistake is apparent from the record. The pendency of an appeal does not bar the Assessing Officer from rectifying such a mistake.
Judgment Excerpts
The Petitioner had filed an application for rectification of the Income tax assessment order. Assistant Commissioner rejected it by the impugned order. The Commissioner held that since the Petitioner had filed an statutory appeal, it would not be proper to decide the rectification application.
The Petitioner also made an application on 8 January 2018 under section 154 of the Income Tax Act to the Assistant Commissioner for rectification. The Petitioner stated that by a mistake apparent on record, the credit of payment of advance tax of Rs.16,80,00,000/- has not been given and Petitioner is entitled to a refund.
He opined that since the Petitioner is agitating on similar ground before the appellate authority it is not proper on the part of the Assistant Commissioner, following the doctrine of judicial discipline, to adjudicate on the same issue pending before the appellate authority.
Procedural History
The Petitioner filed its return of income for AY 2015-16 on 8 October 2015. Scrutiny assessment was completed on 30 December 2017. Petitioner filed an appeal before CIT(A) on the ground of non-credit of advance tax. On 8 January 2018, Petitioner filed a rectification application under Section 154. The Assistant Commissioner rejected the rectification application on 13 June 2019. Petitioner filed the present writ petition on 4 September 2019.
Acts & Sections
- Income Tax Act, 1961: 154
