Corrigendum to issued to rectify mistake in original assessment order was a valid assessment order – ITAT
In a recent judgment, ITAT Chennai has held that corrigendum to assessment order issued by the Assessing Officer (AO) to rectify mistake in original assessment order was a valid assessment order.
ABCAUS Case Law Citation:
4310 (2024) (11) abcaus.in ITAT
Case laws relied upon by the Parties:
DCIT Vs Mondon Investments Ltd.
Dr.Bharani R. Paluvai
Prathyusha Educational Trust vs. PCIT
In the instant case, the assessee had challenged the order passed by the CIT(A)/NFAC in holding that the AO has no power either to withdraw or modify or substitute one assessment order passed by him earlier with another assessment order.
The return of the respondent assessee was processed u/s 143(1) of the Income Tax Act, 1961 (the Act). Subsequently, assessee’s case was selected for scrutiny assessment under CASS.
The AO accepted the returned income and completed assessment u/s 143(3) of the Act and issued computation sheet and demand notice u/s 156 of the Act.
However, the AO noted that there was a mistake in the assessment order in stating that the return income was accepted. Accordingly the AO issued a corrigendum order u/s.143(3) of the Act and computed the assessed income by making an several additions under various heads.
The assessee challenged the corrigendum passed by the AO to the original order u/s 143(3) before CIT(A) by challenging that the corrigendum issued by AO was completely against the original assessment order passed and hence, was bad in law and is against the principles of natural justice.
The CIT(A) after going through the grounds raised by AO held that as per provisions of the Act, the AO has no power to either withdraw or modify or substitute one assessment order passed by him earlier with another assessment order subsequently. Accordingly, he quashed the corrigendum passed by AO.
Before the Tribunal, the Revenue submitted that though the assessment order mistakenly stated that return income was accepted, the computation sheet showed the correct assessed income and the demand notice was issued raising a demand on account of additions made.
The Tribunal observed that Hon’ble Madras High Court has held the corrigendum issued in rectifying the error in preamble of the assessment order as legal and valid.
The Tribunal noted that in the instant case, the AO while issuing original assessment order had wrongly noted the details of some other assessee as was apparent from the assessment order. The fact was that the corrigendum issued thereafter i.e., immediately on next day carried the correct assessment order which was issued as a correct assessment order. Admittedly, the assessment order issued vide corrigendum was matching with the computation sheet and demand notice issued along with the original assessment order.
The Tribunal observed that the decision of Hon’ble Supreme Court support the case of Revenue for the reason that the ITNS 65 and ITNS 50 i.e., Form for determination of tax payable and demand notice (in old scheme), now in computerization the computation sheet and demand notice was generated on the system which was created itself.
The Tribunal opined that the AO had made mistake in issuing original assessment order and subsequently rectified the mistake by issuing corrigendum which was a valid assessment order.
Accordingly, the Tribunal reversed the finding of CIT(A) on this issue. Since the CIT(A) had not adjudicated the issues on merits, the matter was restored back to the file of the CIT(A) for adjudication on merits after allowing reasonable opportunity of being heard to the assessee.
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