TMI Blog2013 (7) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus the issue of grant of interest on interest is a highly debatable and rather allowable claim in favour of the assessee. Therefore, a decision on such a debatable issue cannot be passed under the provisions of sec. 154. Accordingly,set aside the impugned order passed u/s 154 being beyond jurisdiction of the AO in the peculiar facts and circumstances of the case - appeal of the assessee is allowed. - I.T.A. No.3757/Mum/2010 - - - Dated:- 8-5-2013 - Shri Vijay Pal Rao, JM And Shri D. Karunakara Rao, AM,JJ. For the Appellant : Shri Dinesh Vyas For the Respondent : Shri A. P. Singh ORDER Per : Vijay Pal Rao, JM. This appeal by the assessee is directed against the order dated 11.2.2010 of the Commissioner of Income Tax(Appeals) arising from the order passed u/s 154 dated 28.7.2008 for the Assessment Year 1997-98. 2. The assessee has raised the following grounds in this appeal. 1. On the facts and circumstances of the case and in law, the CIT(A) has erred in rejecting the plea of the Appellant that the rectification order dated July 28, 2008 passed by the learned Assessing Officer is barred by limitation of time under section 154(7) and is thus without juris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer while passing the order giving effect to the Commissioner of Income Tax(Appeals) order after charging the additional tax of Rs..31 lacs. The assessee filed a rectification petition u/s 154 on which the Assessing Officer passed an order dated 2.7.2007 and accepted the claim of the assessee that the additional tax was not chargeable. Accordingly, the demand was reduced to Rs. 34.43 crores. Consequently, the interest payable u/s 244A(1)(b) was revised to Rs. 12.27 crores from Rs. 12.16 crores. 3.3 In the month of Jan 2008, the audit party raised an audit objection regarding the grand and calculation of interest u/s 244A(1)(b) on the refund amount of Rs. 57,53,10,029/-, which includes interest of Rs. 9,52,06,230/-. The audit party thus raised the objection that while calculating the interest for the period from 1.4.1997 to 31.3.1998, the Assessing Officer considered the tax refund as well as interest whereas the interest was to be worked out only on the refund of tax. In pursuant to the audit objection, the Assessing Officer proposed to modify the order u/s 154 by issuing an notice dated 10.3.2008 whereby the entitlement of the interest due to the assessee was propose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The point of grant of interest on interest u/s 244A(1)(b) is a highly debatable and controversial issue and has been decided in favour of the assessee by the Hon'ble Supreme Court in various decisions. Thus, the ld Sr counsel has submitted that the Assessing Officer has gone beyond his jurisdiction u/s 154 while passing the impugned order whereby the interest granted u/s 244A (1)(b) has been withdrawn on the basis of audit objection. 4.3 On the other hand, the ld DR has relied upon the orders of the authorities below and submitted that the Assessing Officer did not apply his mind at the time of granting the interest u/s 244A(1)(b) and when the audit party has pointed out a mistake in the calculation of the working of interest, the Assessing Officer accordingly, rectified the said mistake. Thus, the rectification of the mistake in the calculation of the interest is very much an error apparent within a subject matter of sec. 154. 5 We have considered the rival submissions and carefully perused the relevant material on record. As we have discussed above while narrating the facts leading to the controversy, the issue in the order passed u/s 154, is regarding the grant of interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) Mumbai " 5.2 The assessee has raised the objection vide its letter dated 11.3.2008 against the proposed revision of grant of interest u/s 244A(1)(b) by invoking the provisions of sec 154 of the Act. The assessee has raised the issue of jurisdiction of the Assessing Officer on the ground that this point is highly debatable and involved interpretation of law. Therefore, it was contended that the Assessing Officer has exceeded his jurisdiction u/s 154 to deicide such a debatable issue involving interpretation of law and further when the issue of interest on interest has been decided by the Hon'ble Supreme Court as well as various High Courts in favour of the assessee. In support of his contention, the decisions as relied before us were also referred and relied in the said letter dated 11.3.2008. 6. It is settled proposition of law that a mistake apparent from the record must be an obvious and patent mistake and not something which can be established by long drawn process of reasoning can be rectified u/s 154. Decision on a debatable point of law is not a mistake apparent from the record. Merely overlooking of certain facts or mandatory provisions of law which does not allow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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