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it can be a matter of lack of enquiry or lack of proper enquiry on the part of the AO while passing scrutiny assessment order u/s 143(3) of the Act but the decision taken by the AO after considering the facts and evidences produced by the assessee cannot be held as a mistake apparent and patent on the face of the record. The AO while passing the order u/s 154 of the Act has stated that on perusal of the record of the assessee and specifically on perusal of the sale deed dated 24-11-2010 whereby the assessee sold the immovable property bearing No. B-277, Vigyan Nagar, Jaipur, there was nowhere mentioned about the construction of the said property. Therefore, the AO in proceedings u/s 154 of the Act has re-appreciated the evidences which was already available on record and considered by the AO while passing the scrutiny assessment order u/s 143(3) of the Act. The AO has no jurisdiction u/s 154 of the Act to re-appreciate the evidences already considered by the AO during the scrutiny assessment as it would amount to review of its own order. The AO has travelled beyond the jurisdiction and scope of Section 154 of the Act while passing the impugned order. It is a gross misuse of the provisions and powers u/s 154 of the Act. Instead of sending a proposal for revision of the order u/s 263 of the Act, the AO has assumed the powers and jurisdiction u/s 154 of the Act to review the earlier order in the garb of rectification of mistake. Thus it is pertinent to note that on the date of initiation of proceedings u/s 154 of the Act, the limitation for invoking the provisions of Section 263 of the Act was very much available but instead of taking the step for appropriate proceedings u/s 263 of the Act, the AO assumed the jurisdiction which is otherwise not permissible u/s 154 of the Act. Even otherwise, if there is an error in the earlier order for allowing deduction u/s 54 of the Act, this is a mistake of question of law and facts. The ascertainment of facts requires a proper investigation and verification of the record as well as reality on the ground. Therefore, such an exercise of investigation and examination cannot be undertaken u/s 154 of the Act. Accordingly, the order passed by the AO u/s 154 of the Act is a gross misuse and abuse of the provisions of the Act in the garb of rectification of mistake. Hence, the order of the AO is quashed which is without jurisdiction. Thus the appeal of the assessee is allowed.

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Sec. 154 of Income Tax Act, 1961— Rectification of mistake —Assessee was an individual and filed his return of income on 14- 02-2012. During the scrutiny assessment, the AO noted that the assessee declaredless capital gains on sale of property bearing for sale consideration. The AO further noted that the assessee has claimed indexed cost of acquisition while computing capital gains. Accordingly, the AO accepted returned income while framing the assessment u/s 143(3) of the Act on 30-12-2013.Thereafter the AO proposed to rectify the mistake in the assessment order u/s 154 of the Act to withdraw the claim of deduction u/s 54 of the I.T. Act, 1961 on 20-05-2015. The assessee challenged the order passed u/s 154 of the Act before the CIT(A) and submitted that withdrawal of deduction u/s 54/54F is beyond the scope of rectification of apparent and patent mistake as per Section 154 of the Act. The CIT(A) did not accept the objection of the assessee and upheld the order of the AO passed u/s 154 of the Act.
Held that the ascertainment of facts requires a proper investigation and verification of the record as well as reality on the ground. Therefore, such an exercise of investigation and examination cannot be undertaken u/s 154 of the Act. Accordingly, the order passed by the AO u/s 154 of the Act is a gross misuse and abuse of the provisions of the Act in the garb of rectification of mistake. Hence, the order of the AO was quashed which was without jurisdiction. Thus, the appeal of the assessee was allowed. --- SHRI RAJENDRA AGARWAL vs. ITO.[2020] 23 ITCD Online 65 (JP)