Date of Order: 1st August 2023
Appellant: Dariyav Singh, Meerut
Respondent: ITO, Ward-1(3), Meerut
The appeal filed by Dariyav Singh challenges the order of the National Faceless Appeal Centre (NFAC), New Delhi, dated 1st November 2022, for the assessment year 2012-13. The dispute revolves around the correction of a tax calculation error in an order under the Vivad Se Vishwas Scheme (VSVS) by an Assessing Officer (AO) which, according to the appellant, should only be rectifiable by the Principal Commissioner of Income Tax (Pr. CIT), Ghaziabad.
The grounds of the appeal presented by the appellant argue that the Assessing Officer was not competent to amend an order issued by the Principal CIT, which included a declaration filed by the appellant and accepted after consultations with the Assessing Officer and the Additional CIT, Range – 1, Meerut. This was based on the premise that any error identified by the AO should be rectified by the Pr. CIT rather than by the AO himself.
During the hearing, neither the appellant nor his representative appeared, leading to an ex-parte decision after considering the arguments of the Senior Departmental Representative (Senior DR). The Tribunal found that the AO had overstepped his bounds by attempting to rectify a decision made by his superior under the VSVS scheme, citing the lack of jurisdiction and the inappropriate application of section 154 of the Income Tax Act for rectifying orders passed by a senior officer.
The Tribunal, comprising Judicial Member Chandra Mohan Garg and Accountant Member Pradip Kumar Kedia, ultimately ruled that the rectification by the AO was invalid and overturned the decision, allowing the appeal. They emphasized that such actions by an AO undermine the hierarchical and procedural norms set by the department, highlighting a significant issue regarding the limits of authority and the proper channels for rectification under tax law.
This case sets a crucial precedent on the administrative procedures within the Income Tax Department, particularly concerning the powers of an AO versus a Pr. CIT in rectifying orders under the VSVS scheme.
The Tribunal’s decision reaffirms the structured hierarchy within the tax department and the specific procedural routes that must be followed for rectifying any errors in official tax orders, ensuring that due process is respected and maintained.
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