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2018 (10) TMI 1730 - HC - Income TaxRectification of mistake - assessment under section 172 - assessment of non-resident shipping company - AO failed to notice the change in law which occurred prior to the assessment being framed, and relied on a circular, the terms of which were no longer sustainable - HELD THAT:- Assessee who comes under section 172 is given an option either to be summarily assessed under that provision or go for regular assessment under the statute; the later option being exercised at any time after the financial year and before the expiry of the assessment year. The assessee has within their knowledge the entire figures for the subject year and could very well arrange its affairs accordingly. Hence, the assessee exercising an option under section 172(7) does so voluntarily with open eyes and when the regular assessment brings in additional liability; it cannot be wriggled out of. The non-resident charterer or owner and his agent, interested in the clearance of the ship after its cargo is unloaded; invariably subjects themselves to the assessment under section 172. There is hence no obligation on the payer to deduct tax and the payment is ensured by the non-resident or agent before departure or at least within 30 days from departure. The complete code under section 172 ensures assessment and payment of tax within a time frame; after which the assessee opts out of the scheme under section 172 to move under the regular assessment; when necessarily the assessee would be entitled to all benefits and mulcted with all liabilities flowing from the other provisions of the Act. On the questions of law framed, we find that the Tribunal has erred in so far as interfering with the order of rectification especially since the rectification was made on the basis of a decision of the hon'ble Supreme Court which was the declared law even when the original order which was rectified was passed. Circular No. 730 dated December 14, 1995 has lost its significance and validity, on the Supreme Court authoritatively speaking on the provision under section 172(7) and the effect of the option exercised, in A. S. Glittre [1997 (4) TMI 3 - SUPREME COURT] . There was hence an error apparent on the face of the record and the Tribunal erred in setting aside the order of rectification. On the above findings, we answer the questions of law framed by the Revenue in favour of the Revenue and against the assessee. The appeal is allowed setting aside the order of the Tribunal and that of the first appellate authority and restoring that of the assessing authority.
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