TMI Blog2005 (1) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... on the ground that the area in the instant AY 1992-93 has ceased to be a rural area?" - In the absence of non-compliance with the statutory requirements contained in section 80HHA, the Assessing Officer was perfectly justified in not granting the benefit, so was the CIT (Appeals) who was justified in later withdrawing it by taking recourse to the provisions of section 154 – Assessee’s appeal dismissed - - - - - Dated:- 3-1-2005 - Judge(s) : A. M. SAPRE., ASHOK KUMAR TIWARI. JUDGMENT The judgment of the court was delivered by A. M. Sapre J.- This is an appeal filed by an assessee under section 260A of the Income-tax Act, 1961, against an order dated June 13, 2000, passed by the Income-tax Appellate Tribunal (for short hereinafter c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 80HHA in respect of their unit No. II, i.e, 20 per cent. of this profit. The Assessing Officer declined to grant this deduction and rejected the claim. The assessee, i.e., the appellant herein, filed appeal before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) finding that in the earlier year (1990-91), the benefit was granted to the assessee, allowed the appeal and granted the benefit in favour of the assessee as claimed in the year in question (1992-93) by his order dated September 29, 1995. This led the Assessing Officer to make an application before the Commissioner of Income-tax (Appeals) under section 154 of the Act seeking rejection of the order dated September 29, 1995. By this applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner of Income-tax (Appeals) by order dated November 15,1995, allowed the application made by the Assessing Officer under section 154 ibid and recalled the order dated September 29, 1995, in so far as it related to grant of benefit under section 80HHA. In other words, the Commissioner of Income-tax (Appeals) accepted the contention of the Assessing Officer and held that non-fulfilment of requirement of Explanation (a)(ii) appended to section 80HHA amounts to a mistake apparent on its face and hence need to be rectified by taking recourse to the provisions of section 154 ibid. As a result, the benefit under section 80HHA which was initially granted to the assessee stood withdrawn by the subsequent order dated November 15, 1995, passed und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions and hence the same having been granted in the year in question, could not be said to be illegal or against any provision of law. Fourthly, if on the date when the factory was installed fell within the zone of eligibility criteria then by the subsequent notification, the benefit cannot be withdrawn. In reply, learned counsel for the Revenue supported the impugned order. Having heard learned counsel for the parties and having perused the record of the case, we find no merit in this appeal. The controversy involved in this appeal centres around the interpretation of section 80HHA and in particular its Explanation (a)(ii). It may be mentioned that the Explanation in question was substituted by the Direct Tax Laws (Amendment) Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t reads as under. It has come into force with effect from April 1, 1989. "Schedule Sr. No. Name of municipality or cantonment board Details of the areas 3. Agra, Allahabad, Amritsar, Bhopal, Cochin, Coimbatore, Dhanbad, Gwalior, Indore, Jabalpur, Jaipur, Jamshedpur, Ludhiana, Madurai, Patna, Salem, Sholapur, Srinagar, Surat, Tiruchirapalli, Trivandrum, Varanasi (Benaras) and Vadodara (Baroda). Areas up to a distance of 10 kilo meters in all directions from the municipal limits or, as the case may be, cantonment limits." It is not in dispute being an admitted fact that the appellant (assessee) does not fulfil the requirement of the aforesaid notification. In other words, no attempt was made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be, dealing with rectification of mistake. It is a mistake apparent on face of the order, calling interference by the taxing authorities. In other words, granting a benefit to an assessee in ignorance of a statutory requirement is a mistake attracting the rigour of section 154 of the Act. We are not impressed by the submission of learned counsel for the appellant/assessee when he contended that since for one previous year, the benefit was granted to the assessee for the same should continue for the next assessment year. A mistake once committed cannot be allowed to be repeated for the next year. Rather it needs to be rectified even in respect of the year in which it was granted. We are constrained to observe inaction on the part of the t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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