TMI Blog1981 (4) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... of depreciation as per Rules and gave relief to that extent. He, however, rejected the two other claims regarding deductions under s. 80J, and development rebate on the ground that none of these claims had been made at the time of the filing of the return of income or at any time during the assessment proceedings and the mistake was not one which could be corrected under s. 154 of the IT Act. The said decision had been confirmed by the CIT (A) on appeal. The assessee has consequently come up in second appeal before us. 2. We have heard the representative of the parties at length. The first point argued by the representative of the assessee was that all the deductions contemplated by Chapter IV-A were mandatory inasmuch as the word used i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 107 ITR 63 (Guj) wherein the provisions of the circular above referred to have been quoted in extenso and relying upon a decision of the Supreme Court in Navnitlal Javeri vs. K.K. seen, AAC (1965) 56 ITR 198 (SC), the High Court held that although at the time of original, assessment the assessee firm did not claim relief under s. 84/80J and though the responsibility for claiming the refunds an reliefs rested with the assessee, the ITO should have drawn the attention of the assessee to this relief to which the assessee appears to be entitled but which he had omitted to claim. A similar application for rectification under s. 154 was made by the assessee which was rejected by the Tribunal. Although the ultimate decision of High Court was in f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... des that our attention was also drawn to some observations of the Supreme Court in Maharana Mills Pvt. Ltd vs. ITO (1959) 36 ITR 350 (SC) in which Their Lordships observed that the regard contemplated by s. 35 of the IT Act, 1922 did not mean only the order of assessment but it comprised of the entire proceedings on which assessment was based and the ITO was entailed under s. 35 to look into the whole evidence applicable to ascertains to whether there was any error. Similar are the observations in Arvind N. Mafatlal vs. ITO (1957) 32 ITR 350 (Guj). Reference was also made to a decision of the Allahabad High Court in Swadeshi Cotton Mills Co. Ltd. V. ITO (1966) 60 ITR 720 (All) wherein it was held: "That since the mandatory provision of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessment proceeding and the assessee was entitled to an opportunity to create reserve till the end of rectification proceedings. On a reference it was held by the Hon'ble High Court that the Tribunal was right in directing the ITO to allow an opportunity to the assessee to meet the deficiency in the development rebate reserve. Although the authority apparently supports the view put forward by the representative of the assessee, to our mind, it is not conclusive on the subject. A perusal of the detailed judgment would show that before the Tribunal, the counsel for the assessee had stated that the existing reserve was far in excess of the statutory requirements but since this had not been verified, the Tribunal sent the matter back ..... X X X X Extracts X X X X X X X X Extracts X X X X
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