TMI Blog2006 (7) TMI 267X X X X Extracts X X X X X X X X Extracts X X X X ..... rd warranting such deduction and the mistake is not apparent from the face of record." 2. The facts in brief are that the assessee before the Assessing Officer had moved an application under section 154 of the Income-tax Act pointing out therein that the assessee-company had issued shares worth Rs. 53 lakhs to the institutions against outstanding interest due to them but because of oversight it did not claim this interest as deduction under section 43B of the Income-tax Act in its return of income, and same may be allowed. The Assessing Officer rejected this application mainly on the basis that the assessee had not made any claim in their return of income for the deduction of aforesaid amount on account of interest payment under section 43B of the Income-tax Act and since no claim was also made later on during the proceedings under section 154 of the Act, order of which was passed on 15-9-1998. The aggrieved assessee went in first appeal but could not succeed. 3. In support of the issue as to whether application under section 154 moved by the assessee under the aforesaid facts and circumstances was allowable or not raised in the grounds of appeal, the ld. A/R submits that asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. A/R submits that it was explained to the Assessing Officer as well as to the CIT(A) that it is true that due to oversight no claim was made in the return of income nor any objection was raised at the time of subsequent stage of passing order under section 154 in respect of issue of share worth Rs. 53 lakhs to the financial institutions against outstanding funded interest due to them but as soon as the mistake was detected, the claim was made well within the limitation period of 4 years for rectification of the mistake as per provisions of section 154 of the Income-tax Act, 1961. It was explained to the lower authorities that it has been held in various cases that when the materials were available in the assessment record for grant of relief, the application under section 154 was clearly maintainable and relief could not be refused merely on the basis that the assessee had omitted to claim the same initially. The learned A/R places reliance on the following decisions:- Addl. CIT v. District Co-operative Bank Ltd. [1979] 119 ITR 142 (All.). Ramco Cement Distributors Co. (P.) Ltd. v. Dy. CTO 33 STC 180 (Mad.). CIT v. K.N. Oil Industries [1983] 142 ITR 13 (MP). West Bengal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of Rs. 53 lakhs out of the outstanding funded interest of Rs. 1.06 lakhs due and payable to the financial institutions be and is converted into equity shares of the company. The ld. A/R also refers para 2 of the CBDT Circular No. 669, dated 25-10-1993 on the subject of clarification regarding interpretation of section 43B of the Income-tax Act intimating that the Board has reconsidered the matter and are of the opinion that where the sums referred to in the first proviso under section 43B had, in fact, been paid on or before the due dates mentioned therein, but the evidence therefor had been omitted to be furnished along with the return, the Assessing Officers can entertain applications under section 154 for rectification of the intimations under section 143(1)(a) or orders under section 143(3), as the case may be, and decide the same on merits. This circular has been placed at page No. 71 of the paper book. The ld. A/R while referring the decision of Hon'ble Andhra Pradesh High Court in the case of CIT v. Mahindra Nissan Allywin Ltd. [1998] 233 ITR 493, submits that even Tribunal is not debarred from giving effect to the evidence of funding of the balance outstanding amount whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to the financial institutions was converted into equity of the company, by passing a resolution by the Board of Directors of the assessee-company on 29-12-1994, copy whereof has been placed at page 40 of the paper book. The lower authorities have also not denied this contention of the assessee that by way of Note in Schedule-I it has been clearly mentioned in the Balance Sheet that Rs. 53 lakhs being interest on the term loan has been converted into equity shares of equal value, nor the department has denied the existence of reply dated 12-10-1996 of the assessee in response to the query raised in the notice under section 143(2) placed at pages 5-8 of the paper book, wherein in para 12 it has been replied that no expenditure was incurred for increase in share capital or share application money as there was no public issue of the company's shares and that major increase of Rs. 53 lakhs representing conversion of funded interest due to IDBI, IFCI and ICICI into equity under the rehabilitation package sanctioned by IDBI/BIFR. The query No. 12 raised in this regard by the department has been placed at page No.4 of the paper book. In the CBDT Circular No. 669, dated 25-10-1993 refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in T.S. Balaram, ITO v. Volkart Bros. [1971] 82 ITR 50 that a mistake apparent on record must be an obvious and patent mistake and not something which can be established by long drawn process of reasoning as points on which there may be concavely two options. A decision on a debatable point of law is not a mistake apparent from the record. Glaring and obvious mistake of law can be rectified under section 154 as a mistake of law apparent from the record. In case assessment order is inconsistent with the proviso of Income-tax Act, then it has to be deemed to suffer from a mistake apparent from record. 7. That matter relating to computation of deduction under section 43B was subject-matter of appeal and not matter relating to applicability of section 43B, and nowhere in the assessment order, the Assessing Officer has stated that the matter is debatable, therefore, the same should be allowed under section 154. Where the assessee omits to claim a relief allowable to him under the provisions of the Act, he is entitled to get that relief. 8. In CIT v. K.N. Oil Industries [1983] 142 ITR 13 (MP) the assessee was entitled to relief under section 35B but it was not claimed by him d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upposed to pass a just assessment order, even allowing the statutory benefit as per the law for which the assessee has not made any claim in its return of income or otherwise for which it is very much entitled to. The only lapse on the part of the assessee as apparent from the aforesaid fact of the case, in our view is that it did not press its claim before the Assessing Officer during the assessment proceedings or subsequently on the occasion when an order under section 154 of the Act was passed by the Assessing Officer on 15-9-1998. These lapses, if any, on the part of the assessee cannot be treated as waiver by them to prohibit them to request for allowing the same by moving an application under section 154 of the Act, specially when the Assessing Officer himself was supposed to allow that benefits for which the assessee was otherwise very much entitled to. In this regard we find support from the decision of Delhi Bench of the Tribunal in the case of Container Corpn. of India Ltd. relied on by the ld. A/R wherein after discussing several decisions of Hon'ble Courts including that of Anchor Pressings (P.) Ltd. v. CIT [1986] 161 ITR 159 (SC) and distinguishing the same with decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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