Rectification order u/s 154 cannot be passed after expiry of 4 years

In the present case, the return of income for the assessment year 2010-11 in the case of Shri P.S. Shekar was filed on 30.07.2010 declaring an income of Rs. 52, 15, 90, 290/-. This return of income was revised on 06.10.2010 claiming TDS of Rs. 40, 40, 143/-. This return of income was processed by CPC, Bengaluru on 29.03.2012. The assessee filed a rectification petition dated 28.08.2014 and the remainder to the rectification petition on 25.04.2016.

The AO passed rectification order u/s. 154 of the Act on 20.06.2016, in which the AO changed the head of income from “Long Term Capital Gain” to “Income from other Sources”.

The facts and circumstances are exactly identical to the above-discussed case and in the given facts and circumstances, the assessee has raised additional ground that the rectification order passed by the AO dated 20.06.2016 in regard to the processing of return of income by issuing intimation u/s. 143(1) of the Act dated 29.03.2012 is barred by limitation. For this, the assessee has raised these two grounds:

1) The order u/s 154 (dt.20.06.2016) in so far as it relates to shifting of LTCG of Rs.2,84,04,542/- admitted/assessed in the Intimation u/s.143(1) of the Act (dt. 29.03.2012) and treating the amount as “Income from Other sources” is barred by time.

2) The appellant submits that his omission to raise the issue of limitation in the appeal before the Commissioner (Appeals) and in the Grounds of Appeal before this Hon’ble Tribunal is bonafide.”

12. As regards this issue, we have already dealt in ITA No.1028/Chny/2018 in the case of Shri P.S. Jagdish above, taking a consistent view, we held that rectification order passed by AO u/s.154 of the Act is barred by limitation. As regards to the other issues raised by various grounds, we are refraining ourselves from adjudicating the same because on the issue of limitation, we have decided the appeal in favour of assessee and against Revenue. This appeal of the assessee is allowed.