It is a well settled principle of law that mentioning of a wrong provision or
non-mentioning of a provision does not
invalidate an order.
Section 292-B was introduced vide
Taxation Laws (Amendment) Act, 1975, with effect from 01.10.1975 and states
that no return of income, assessment, notice, summons or other proceeding,
furnished or made or issued or taken or purported to have been furnished or
made or issued or taken in pursuance of any of the provisions of the Act shall
be invalid or shall be deemed to be invalid merely by reason of any mistake,
defect or omission in such return of income, assessment, notice, summons or
other proceeding if such return of income, assessment, notice, summons or other
proceeding is in substance and effect in conformity with or according to the
intent and purpose of the Act.
The provisions of section 292B are
extracted below:
“Return
of income, etc., not to be invalid on certain grounds No return of income,
assessment, notice, summons or other proceeding, furnished or made or issued or
taken or purported to have been furnished or made or issued or taken in
pursuance of any of the provisions of this Act shall be invalid or shall be
deemed to be invalid merely by reason of any mistake, defect or omission in
such return of income, assessment, notice, summons or other proceeding if such
return of income, assessment, notice, summons or other proceeding is in
substance and effect in conformity with or according to the intent and purpose
of this Act.”
Section
292B can be resorted to overcome technical objections
By circular no. 179 dated 30th
September, 1975, the scope of section 292-B was explained and it has been
stated in the said circular that this provision has been made to provide
against purely technical objections without substance coming in the way of the
validity of assessment proceedings, etc. Thus, the circular itself makes it
clear that it is only to overcome technical objections that section 292-B has
been introduced.
Assessment
order not become invalid for mere wrong mention of section
The
Bangalore ITAT, ruled that the assessment proceedings under the Income Tax Act
cannot be nullified merely on ground of mentioning a wrong section in the order.
Where Assessing Officer, by mistake, issued notice under section 153A, instead
of section 153C, however, the notice in substance and effect was in conformity
with or according to the intent and purpose of the Act, the mistake was allowed
to be cured by virtue of section 292B. Assessing Officer, on the basis of
incriminating material relevant to assessee found as a result of search and
seizure in case of a third party assumed jurisdiction under section 153C.
However, in notice issued calling upon the assesse to file return of income as
well as in orders of assessment, Assessing Officer mentioned wrong section,
i.e., section 153A, instead of section 153C. Assessee challenged.
The first objection raised by the assessee is regarding the
validity of assessment framed under Section 143(3) r.w.s. 153C of the Income
Tax Act, 1961 (in short ‘the Act’). The learned Authorized Representative of
the assessee has submitted that the search was conducted on 06.02.2012 and in
pursuant to the search the Assessing Officer issued a Notice under Section 153C
for the Assessment Year 2012-13 which is not valid as this assessment year is
the current year in which the search itself was carried out. Therefore, he has
submitted that the assessment framed under Section 153C is not valid and liable
to be quashed.
On the other hand, the ld. CIT DR
has submitted that there is no
dispute that the search was conducted in the previous year relevant to the
assessment year under consideration therefore the provisions of Section 153C
are not applicable for the assessment year under consideration however, the
mention of this Section in the order is only a mistake which is covered under
the provisions of Section 292BB of the Act.
Having considered the rival submissions as well as the
relevant material on record, we find that undisputedly when the search was
carried out on 06.03.2012 then the provisions of Section 153C are not
applicable for the assessment year under consideration i.e. 2012-13 therefore,
the assessment framed in question for the assessment year under consideration
will be treated only under Section 143(3) and mere mention of section 153C in
the assessment order will not render the assessment invalid or void
ab-initio. It is apparent that this is a case of only a mistake of mentioning
the assessment framed under Section 143(3) r.w.s 153C and no other material or
procedural defect either pointed out or found on the record to suggest that the
Assessing Officer has not followed the procedure for framing the assessment
under Section 143(3). Hence, this ground raised by the assessee is devoid of
any merit and accordingly we dismiss the Ground No. 1 of the additional ground. (Related Assessment Year : 2012- 13) –
[Shri
Cherian Abraham v. DCIT - Date of Judgement : 21.11.2017 (ITAT Bangalore)]
The only mistake on the part of Assessing
Officer was in mentioning section 153A, instead of section 153C. If this
mistake was not allowed to be cured, the very purpose and object of enacting
section 292B would be defeated as impugned notice substance and effect, was in conformity
with or according to the intent and purpose of the Act. - Wrong Mention of Section would not make Re-Assessment Invalid if
Assessee Co-operated with Proceedings
In DCIT v. K.M Nagaraj, the ITAT Bengaluru held that quoting of wrong
section would not result in invalidating the whole re-assessment proceedings
under Income Tax Act if the assessee had co-operated with the assessment. In
the instant case, incriminating material relevant to assessee was found as a
result of search and seizure operation in the case of M/s.Corporate Leisure
& Property Development (P) Ltd. Assessing Officer had mentioned section
153A of the Income Tax Act in the notice issued calling upon the respondent-assessee
to file return of income as well as in the orders of assessment. Notice for
assuming jurisdiction for framing assessment order was issued under wrong
section i.e. 153A instead of 153C. Assessee vehemently contended that wrong
mention of section viz. 153A goes to the very root of the matter and it is
jurisdictional error which cannot be cured by the provisions of section 292B of
the Act. On appeal, the first appellate authority quashed the proceedings.
Against the order, the department preferred an appeal.
The
bench noted that the issue requires to be adjudicated in the light of the
provisions of section 292B of the Act which provides that return of income or
notice or summons shall not be invalidated on certain grounds.
Analyzing
the provisions of section 292B of the Act, the bench said that notices or
summons shall not be invalided by mere reason of any mistake merely by reason
of any mistake, defect or omission in such return of income, assessment,
notice, summons or other proceeding if such return of income, assessment,
notice, summons or other proceeding is in substance and effect in conformity
with or according to the intent and purpose of the Act.
Reversing
the order of the first appellate authority, the bench observed that in the
present case, undisputedly no search warrant was issued in the name of the
assessee but the assessee had responded to the notice issued under section 153A
by filing return of income, participated in the proceedings till the matter
resulted in framing of the assessment order. “During the course of assessment
proceedings, the respondent-assessee was given due opportunity of meeting the
case made against him and in the result there was no prejudice caused to the
respondent-assessee. Furthermore, it is not the case of the respondent-assessee
his case even does not fall within the scope and ambit of the provisions of
section 153C of the Act. The only mistake on the part of the Assessing Officer
is in mentioning section 153A instead of 153C. In the facts of the preset case,
the provisions of section 292B clearly come into play. Under the provisions of
section 292B, certain acts are not to be treated as invalid by reason of
mistake or defect or omission either in the return of income, assessment,
notice, summons or other proceedings. In other words, notice cannot be
invalidated by reason of any mistake such as one occurred in the present case
i.e. mentioning section 153A instead of 153C. If this mistake is not allowed to
be cured, the very purpose and object of enacting the provisions of section
292B is defeated. This notice, in substance and effect, is in conformity with
or according to the intent and purpose of the Act. The purpose of issuing
notice is to call upon the assessee to file return of income disclosing income
found in the incriminating material found as a result of search and seizure in
the case of M/s. Corporate Leisure & Property Development (P) Ltd. This
being the intent and purpose of the provisions contained in section 153A and
153C, stands satisfied if the notice is responded and the assessee has
participated in the assessment proceedings. The fact that wrong section was
mentioned in the notice does not invalid the proceedings.” (Related
Assessment years : 2005-06 to 2007-08) – [DCIT
v. K. M. Nagaraj - Date of Judgement : 19.05.2017 (ITAT Bengaluru)]
Mentioning of a wrong provision does not disentitle a person
for relief, if entitled otherwise.
The Hon'ble Apex Court in the case
of P. K. Palanisamy v. N. Arumugham & Anr., held that mentioning of a wrong
provision does not disentitle a person for relief, if entitled otherwise. The
well settled provision of law is evident from para 13 of the said judgment
reproduced as under:-
“13.
A contention has been raised that the applications filed by the appellant
herein having regard to the decisions of the Madras High Court could not have
been entertained which were filed under Section 148 of the Code. Section 148 of
the Code is a general provision and Section 149 thereof is special. The first
application should have been filed in terms of Section 149 of the code. Once
the court granted time for payment of deficit court fee within the period specified
therefor, it would have been possible to extend the same by the court in
exercise of its power under Section 148 of the Code. Only because a wrong
provision was mentioned by the appellant, the same, in our opinion, by itself
would not be a ground to hold that the application was not maintainable or that
the order passed thereon would be a nullity”. – [P. K. Palanisamy v. N. Arumugham
& Anr., reported in 2007(9) SCALE 197 – Date of Judgement : 23.07.2009 (SC)]
In Ram Sunder Ram v. Union of India
& Ors, it was held:
“.....It appears that the competent authority has wrongly quoted Section 20 in the order of discharge whereas, in fact, the order of discharge has to be read having been passed under Section 22 of the Army Act. It is well settled that if an authority has a power under the law merely because while exercising that power the source of power is not specifically referred to or a reference is made to a wrong provision of law, that by itself does not vitiate the exercise of power so long as the power does exist and can be traced to a source available in law [see N. Mani v. Sangeetha Theatre and Ors. (2004) 12 SCC 278]. Thus, quoting of wrong provision of Section 20 in the order of discharge of the appellant by the competent authority does not take away the jurisdiction of the authority under Section 22 of the Army Act. Therefore, the order of discharge of the appellant from the army service cannot be vitiated on this sole ground as contended by the Learned Counsel for the appellant.” – [Ram Sunder Ram v. Union of India & Ors. 2007 (9) SCALE 197 - Date of Judgment: 11.07.2007 (SC)]
In N. Mani v. Sangeetha Theatres
& Ors., it is stated:
“9.
It is well settled that if an authority has a power under the law merely
because while exercising that power the source of power is not specifically
referred to or a reference is made to a wrong provision of law, that by itself
does not vitiate the exercise of power so long as the power does exist and can
be traced to a source available in law.” – [N. Mani v. Sangeetha Theatres & Ors. (2004)
12 SCC 278 (SC)]
Merely because an order is
purported to be made under a wrong provision of law, it does not become invalid
so long as there is some other provision of law
The Supreme Court in the case of State of Karnataka v. Muniyalla AIR 1985 SC 470 has held "but it is now well-settled that merely because an order is purported to be made under a wrong provision of law, it does not became invalid so long as there is some other provision of law under which the order could be validly made. Mere recital of a wrong provision of law does not have the effect of invalidating an order which is otherwise within the power of the authority making it." – [State of Karnataka v. Muniyalla, AIR 1985 SC 470]
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