INCOME TAX ACT, 1961

Section 154

Rectification - Mistake apparent - Rectification made on the basis of outcome of enquiry received subsequent to conclusion of assessment proceedings -

During the assessment proceedings, the notices issued by AO under section 133(6) were returned back with remarks that no such entity exists. Based on revisit of notices, AO made addition of Rs. 87,95,000 being 20% of the purchases of Rs. 4,39,75,000 from one entity, namely, M/s. V owing to non-substantiation of purchases made. After passing of the assessment order, AO received information regarding said purchases along with bank statements based on which AO passed order of rectification under section 154 and brought to tax the entire amount of purchases of Rs. 4,39,75,000 made from M/s. V. Held: The term 'record' denotes information or evidence collected, available, preserved before captivating a decision. In the instant case, AO while passing rectification order had taken into consideration the material and outcome of enquiries received subsequent to conclusion of assessment proceedings. Hence, it could not be held that action of AO rectifying the mistake, emanated from record available at the time of assessment. Ergo, it could not be held to be a mistake apparent from record rectifiable under section 124. There are other provisions enshrined in the Act to bring the amounts to tax fold which are based on replies received for queries raised during assessment proceedings but such action could not be resorted to under section 154.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

INCOME TAX ACT, 1961

Section 37(1)

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