Entire cash receipt considered as turnover during assessment proceeding: Whether can be rectified under section 154?
he scope of section 154 is always a matter of disputes and litigation. The same was there in a case before ITAT. The case details is as under
ANANDJI KALYANJI VERSUS ACIT, CENTRAL CIRCLE-1, JODHPUR, I.T.A. No. 38/Jodh/2023
Dated.- October 12, 2023
The issue was whether the cash deposited into a bank account, which was a mistake apparent from record, can be rectified under section 154 of Income Tax Act?
During the course of assessment proceedings, the ld. AO has examined the books of account of the assessee during the course of scrutiny and computed turnover of the assessee by totaling the credit side of cash receipt as per the cash book which are without application of mind.
He argued that all the cash receipts do not constitute the business turnover of the assessee and therefore, it was a mistake apparent form the record which ought to have been considered and rectified by the Assessing Officer to reduce the burden of the Higher Authority.
He further submitted that the ld. CIT(A) has ignored the submissions of the appellant in confirming the finding of the AO in upholding the order passed by the AO in rejecting the application u/s 154 filed by the assessee.
He prayed that the matter may be set aside with appropriate direction to the ld. CIT(A) or the ld. AO.
On above facts, ITAT has held as under:
- The material available on record and the impugned order. Admittedly, the AO has examined the books of account of the assessee, the cash book in particular while computing turnover of the assessee.
- At this stage, the claim made by the appellant u/s 154 amounts to review of the assessment order by way of further verification and examination of books of account of the appellant, the ledger, cash book and other supporting documents. Meaning thereby, that AO would again require conducting scrutiny by further verification to verify quantum of turnover as claimed by the appellant.
- In our view, the claim of the appellant that there was a wrong computation of turnover based on cash receipts credited in the cash book is debatable and reviews of the assessment proceedings which do not call under the category of omission or apparent mistake from the record.
- As per provisions u/s 154 only a mistake which are apparent and patent from record, and whose discovery is not depending on any further investigation/verification can be rectified u/s 154 of the Income Tax Act. In view of that matter, the instant case does not fall in the said category and hence, we hold that the issue being debatable which cannot be rectified u/s 154.
- Accordingly, issues challenged in the grounds raised by the assessee on the issue are dismissed as not maintainable.
In the result, the appeal of the assessee is dismissed.
In short, even though the submission of cash books and other records is done during assessment proceedings, it cannot be considered as a mistake apparent from record if any issue requires application of mind.
The copy of the order is as under: