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2013 (12) TMI 60 - AT - Income TaxRectification of mistake u/s 154 - Fair market value - Held that:- The non-issue of notice u/s. 154(3) by the A.O. under the circumstances is relevant for procedure. The same is, however, not a jurisidictional notice, and is therefore curable - Following Honda Siel Power Products Ltd. v. CIT [2007 (11) TMI 8 - Supreme Court of India] - The assessing authority has an inherent jurisdiction, subject of course to the time limitation provided by law in its respect, to rectify mistakes inasmuch as no court or authority can by its action or non-action cause prejudice to any party before it - The apex court in Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83 (SC) has laid down a four-way test toward an order being erroneous. Succinctly put, these are: incorrect assumption of facts; incorrect application of law; without applying the principles of natural justice; and without application of mind - The issue was restored for fresh decision. Following CIT vs. M. R. M. Plantations Pvt. Ltd. [1998 (6) TMI 35 - MADRAS High Court] - The 'record' would be that available with the A.O. at the time of initiation of the rectification proceedings, and not merely the record available at the time of passing the original order - As per Board Circular No. 689 dated 24.09.1994 the A.O. is permitted to admit subsequent material brought on record and to rectify the assessment consistent with such evidence, except where statutory evidence required to be submitted had not been submitted. The assessment as made in the instant case would tantamount to it being made subject to the result of the reference as made during the course of assessment to the valuation officer, and thereby exceeding the time limitation prescribed by law - A subsequent report at a variance may, in the facts and circumstances of a case, exhibit the assessment as framed to be erroneous and prejudicial either to the Revenue or the assessee, validating action u/s. 263 or, as the case may be, sec. 264, but would not by itself make the order 'mistaken', so as to be liable for rectification u/s. 154 - Decided against Revenue.
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