TMI Blog1998 (8) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... on 23-6-1994 declaring total income of Rs. 2,66,910. The return was processed under section 143(l)(a) vide intimation dated 30th September, 1994. In this intimation, the Assessing Officer had accepted the income returned. Later on, it was noticed by the Assessing Officer that the assessee had claimed deduction under section 80-I on the gross income, i e., before considering claim of current depreciation, unabsorbed depreciation and unabsorbed investment allowance, etc. He, therefore, issued notice under section 154 on 21 -3-1995 proposing to rectify the intimation issued under section 143(1)(a). The assessee disputed the proposed rectification under section 154. However, the Assessing Officer overruled the assessee's objections and determin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ie adjustment permissible under section 143(l)(a) and also rectification under section 154. He further submitted that the decision of the Hon'ble Supreme Court cannot be equated with a retrospective legislation so as to make the rectification under section 154. If at the relevant time, the matter was debatable, it is out of the perview of rectification proceedings even though subsequently the issue is settled by the Hon'ble Supreme Court. In support of this contention, he relied upon the following decisions: (1) Jiyajeerao Cotton Mills Ltd. v. ITO [1981] 130 ITR 710 (Cal.) (2) V. R. Sonti v. CIT [1979] 117 ITR 838 (Cal.). He accordingly concluded that the order of rectification under section 154 dated 28th March, 1995 be quashed. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pril, 1978, i.e., much earlier to the date of the order of rectification passed by the Assessing Officer. Therefore, she submitted, that the order of rectification passed by the Assessing Officer is valid and the same should be upheld. 5. We have carefully considered the arguments of both the sides and have perused the material placed before us. Section 80-I of the IT Act, 1961, as it stood at the relevant time, reads as under : "80-I(1) - Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking or a ship or the business of a hotel or the business of repairs to ocean-going vessels or other powered craft, to which this section applies, there shall, in accordance with and subject to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in accordance with the provisions of this Act (before making any deduction under this Chapter) shall alone be deemed to be the amount of income of that nature which is derived or received by the assessee and which is included in his gross total income." From the perusal of the above, it would be clear that section 80AB is applicable where any deduction is required to be made or allowed under any section falling under Chapter VI-A under the head "C", i. e. "Deductions in respect of certain incomes". Heading 'C' of Chapter VI-A starts with deduction under section 80H and ends with section 80TT. Thus it includes sections 80HH, 80HHA, 80-I etc. It provides that income as computed in accordance with the provisions of this Act (before makin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the scope of prima facie adjustment under section 143(l)(a) as well as section 154 is very limited. No adjustment can be made under section 143(1)(a) in respect of debatable and controversial matter and he stated that prior to the decision of the Hon'ble Supreme Court in the case of Mettur Chemical Industrial Corpn. Ltd. (supra), there was a controversy with regard to the computation of profits and gains of the industrial undertaking for the purpose of section 80-I. Therefore, the Assessing Officer could not have rectified intimation sent under section 143(l)(a), by applying section 154, to recompute the deduction under section 80-I. We find that in the case of Mettur Chemical Industrial Corpn. Ltd, (supra), the assessment years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or depreciation, unabsorbed depreciation, unabsorbed investment allowance etc. Therefore, fore, the deduction claimed by the assessee was wrongly computed and the Assessing Officer was empowered rather it was his duty under section 143(l)(a) to make adjustments and allow deduction under section 80-I as permissible in accordance with law. Since the Assessing Officer did not make the above adjustment, there was a mistake in his order which was apparent from the record. Therefore, the Assessing Officer had jurisdiction under section 154 to rectify such mistake. We accordingly uphold the order of the Assessing Officer passed under section 154 on 28-3-1995, and dismiss the assessee's appeal. 6. In the result, the assessee's appeal is dismissed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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