The appeal pending before the tribunal was decided in our favour. While giving effect to the order of the tribunal, the AO rectified an apparent error in the original assessment order. The error relates to excess allowance of depreciation in the assessment. Is the AO justified in rectifying his order, while passing an order giving effect to the appellate order?
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While giving effect to an appellate order under section 250 / 254, the AO cannot travel beyond what is stated in the appellate order. While giving effect to appeallte order he cannot rectify an apparent error in the original assessment order which requires application of section 154. When the error sought to be rectified has no connection to the subject matter of appeal, the AO has no jurisdiction to do rectification in the order giving effect to the appellate order. If the appeal order gives a direction for any fact finding by the AO and directs passing of an order accordingly, then the AO must follow that specific direction and pass an order. Please refer Bhagwandas Associates v. ITO (2009) 119 ITD 1 (Pune) ; CIT v. S.V.Divakar (1993) 201 ITR 914 (Mad).
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