INCOME TAX ACT, 1961

Section 154

Rectification under section 154 - Application moved under section 154 by CIT(A) without giving assessee proper opportunity of hearing - -

Assessee had not filed her return of income as she had sold an immovable property for which stamp duty was assessed by the Sub-Registrar at Rs. 10,54,000. Accordingly, AO issued notice under section 148 to assessee. Thereafter, assessee fled objections against the said notice issued under section 148 but AO made additions on account of long-term capital gain. Assessee filed an application under section 154 pointing out the legal mistake as also the factual mistake in his order. However, CIT(A) disposed the said application filed by the assessee. Held: CIT(A) had not passed any 'speaking order' in respect of the mistakes pointed out by the assessee. As per assessee, there was legal as well as factual mistakes in the order passed by CIT(A) which were pointed out by the assessee and the same had already been reproduced in the written submissions of the assessee. Characteristics of a speaking order is that, it should contain adequate and sufficient reasons in support of the decision. “The principles of nature justice and fair play inaction” requires recording of reasons and as per the order passed by CIT(A) while rejecting the application of the assessee under section 154. Therefore, matter was remanded back to CIT(A) to be adjudicated and decided application under section 154 afresh in accordance with law after passing a 'speaking order'.

Followed:GKN Driveshafts (India) Ltd. v. ITO & Ors. (2003) 259 ITR 19 (SC) : 2003 TaxPub(DT) 734 (SC) and K.C. Mercantile v. Dy.CIT [DBITA No.292/2016 dt. 07-11-2017].

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2011-12

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