Section 154, read with section 68 — Rectification of mistakes and unsatisfactory explanation given by the assessee about the nature and source of income.

Section 154, read with section 68 — Rectification of mistakes and unsatisfactory explanation given by the assessee about the nature and source of income.

The assessment of the assessee was completed u/s.143(3). Subsequently, the Assessing Officer initiated proceedings u/s.154 in respect of gold deposits received from customers. The Assessing Officer was of the view that the assessee had failed to establish the identity of customers who had given gold deposits. The Assessing Officer rejected the objection of the assessee and enhanced the assessment by making the addition u/s.68.

Held:

It was held that the power of the Assessing Officer is limited to rectify the mistakes that are apparent on the face of the record. The Assessing Officer does not have the power to go into the debatable issues and determine taxability. According to section 68, where any sum is found credited in the books of an assessee and the assessee offers no explanation about the nature and source of the same or the explanation offered by him is not satisfactory in the opinion of the Assessing Officer, the sum so credited may be charged to income-tax as the income of the assessee of that previous year. On the other hand, section 154 deals with rectification of mistakes apparent from record. In the course of rectification proceedings u/s.154, the Assessing Officer cannot go into debatable issues to determine taxability of unexplained cash credits.