Section 154 of the Income Tax Act can only be invoked to rectify a mistake apparent from the record and cannot be used to re-adjudicate facts on merits or to decide disputable issues.

ORDER :

The Notice issued under Section 154 of the Income Tax Act, 1961 is under challenge in the writ on hand.

2. The impugned notice reveals that the Assessment Order under Section 143 (3) r/w Section 147 of the Income Tax Act, dated 27.02.2015 for the Assessment Year 2011 – 12 requires to be amended, as there is a mistake apparent from the record within the meaning of Section 154 of Income Tax Act, 1961. Thus the Authority Competent, in order to provide an opportunity to the petitioner, issued a notice fixing the date and time for personal hearing i.e., 09.07.2018 at 11.00 AM. The petitioner had not chosen to appear in person before the respondent, but has chosen to file the present writ petition mainly on the ground that the case of the petitioner is not falling within the scope of Section 154 of Income Tax Act and thus the respondent has no jurisdiction to issue notice and consequently, the impugned notice is liable to be set aside. However, the fact remains that the writ petitioner filed a reply to the notice in writing on 09.07.2018.

3. The learned counsel appearing on behalf of the petitioner strenuously contended that the case on hand is a classic case, where there is an error apparent on exercise of jurisdiction by the respondent under Section 154 of the Income Tax Act. Further the respondent has not considered the facts and circumstances as well as the points raised in the reply by the petitioner for initiation of Rectification Proceedings under Section 154 of the Income Tax Act. The entire exercise is done beyond the scope of the provision under Section 154 of the Act and thus the impugned order is unsustainable.

4. The learned counsel for the petitioner solicited the attention of this Court with reference to the notice issued under Section 142 (1) of the Income Tax Act on 27.01.2015 of the annexure to the said order states that specific reply is given to the each of the queries and furnish details. Item 19 and 20 reveals that as per Provisional Statement of Total Income, it is noticed that the petitioner has claimed deductions in respect of provision for bad and doubtful debts under Section 36 (1) (viia). Item 20 states that the nature and basis for claiming exemption of Rs.13,03,558.90 as “TN Govt.Waiver u/s.36 (1) (viia) and further it states that explain whether this outstanding amount belongs to any rural branch. If so, which branch?

5. It is contended that the assessee clarified all these queries and substantially submitted materials to prove their claims in the order passed under Section 143 (3) read with Section 147 of Income Tax Act, dated 27.02.2015. The assessee claimed deductions in their return of income under Section 36 (1) (viia). In the said order, the Authorities considered all these facts and finally accepted the return of assessed income and thereafter the petitioner filed a petition under Section 154 of the Income tax Act, 1961 on 12.03.2015. Even in that petition, all these factors were brought to the notice of the Income Tax Authorities. The Authorities in proceedings dated 25.08.2015, carefully considered the assessee's petition with regard to the assessee's claim in respect of reserve created for overdue interest added to the total income returned. The petitioner further contends that in order dated 30.03.2017, the Principal Commissioner of Income Tax, Puducherry, made a representation of assessment under Section 264 of the Income Tax Act and the operative portion of the order reads as under:

“5. The assessee's above submissions have been carefully considered and both the issues are remitted back to the file of the Assessing Officer for the purpose of examinations of the assessee's claims with reference to the books of account / records maintained by the assessee. The Assessing Officer has to pass a speaking order after considering the issues on merits. Therefore, the order under Section 143(3) read with Section 147 dated 27.02.2015 is set aside for the limited purpose to consider the above two is