TMI Blog2014 (9) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... has been rectified pertains to allowances of 80IB deduction with respect to DEPB/duty draw back/export benefit - the aspect which has been rectified was not at all the subject matter of the appeal before the authorities below - section 154(1)(A) of the Act cannot come to the rescue of the assessee and the order of the CIT(A) is upheld – Decided against assessee. Following the precedent - Decision came subsequently much after filing of the return – Held that:- There was conflict of opinion as to whether DEPB/duty drawback/export benefit would come under the computation of profit eligible for deduction of section 80IB of the Act - at the time of filing of the return by the assessee there was conflict of opinion - The decision in M/s Liberty India Versus Commissioner of Income Tax [2009 (8) TMI 63 - SUPREME COURT] came much later and following the decision in Mepco Industries Ltd., Madurai Versus Commissioner of Income Tax & Anr [2009 (11) TMI 24 - SUPREME COURT] - there was a conflict of opinion prior to the decision and as such the mistake cannot be held to be a mistake apparent from the record to come under the ken of section 154 of the Act - rectification of the mistake apparen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought to have considered the contentions raised before him with referenced to its Ground No.6 challenging observations made by the A.O. in order u/s 154 to the effect that the appellant is not entitled to any deduction u/s 80-IB for any of its units. Deductions in respect of incomes of Kolkata Unit-II Pilerne Unit, apart from receipts on account of DEPB export benefits ought to have been allowed. 9. For that without prejudice to the above grounds, claim of the appellant for deduction u/s 80-IB was allowable for incomes derived by the appellant apart form DEPB export benefit. 10. For that further grounds of appeal may kindly be allowed to be taken at the time of hearing of the appeal. 3. In this case the AO passed order u/s 154 of the Act. He observed that the return of income was filed on 30.10.2002 declaring a total income of ₹ 82,86,310/-. Subsequently, assessment was completed u/s 143(3) on 22.03.2005 on a total income of ₹ 93,64,560/-. The assessment order was subjected to appeal before CIT(A) and ITAT and in pursuance of the ITAT s order dt.20-2.10.2006, the assessment order was revised and order passed on 19.12.2008 u/s 254/251/143(3) dete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purported notice u/s 154 on 08.03.2010 which falls beyond four years form the end of the financial year of date of assessment. The contention raised by the Ld. A.R. has no merit because though the original order in this case was passed on 22..03.2005 the same was revised vide order dated 19.12.2006 passed under section 245/25/143(3) of the Act. Hence the order rectified by the A.O was not the order dated 22.03.2005 passed under section 245/251/143(3) of the Act, which is well within the limitation specified under section 154(7) of the Act. Moreover this issue ahs already been settled by the Apex Court in the case of Hind Wire Industries Ltd. v. Commissioner of Income-tax [1995] 80 TAXMAN 79 (SC) where it has been duly held that What falls for consideration in the present case is the interpretation of the expression from the date of the order sought to be amended in sub-section (7) of section 154 as it stood then. It is obvious that the word order has not been qualified in any way and it does not necessarily mean the original order. It can be any order including the amended or rectified order . Considering above it is held that the rectification order passed by the A.O. is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The contention raised by the Ld.A.r was considered and found to have no merit. First of all for initiation of rectification proceeding it is not relevant that the order of the Apex Court on the issue should be available on the date of the completion of the assessment order. However what is relevant is that the decision of the apex Court on the relevant issue should be available on the date of initiation of rectification proceeding under section 154 of the Act. IN the case under consideration the decision of Liberty India vs Commissioner of Income Tax (SC) (317 ITR 218) was duly in existence at the time of initiation of the proceeding under section 154 of the Act, hence the mistake in question was apparent mistake from records so as to give jurisdiction to the A.O invoke proceedings u/s 154 of the Income Tax Act, 1961. Hence since the assessment made on 22.03.2005, was on the face of the record not in conformity with the law laid down in the case of Liberty India vs Commissioner of Income Tax (SC) (317 ITR 218) decided on 31.08.2009. The rectification order passed within the period of limitation for giving effect to that law was a perfectly proper exercise of power. When a statutory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia Ltd. vs DCIT 214 ITR 504 (Cal) c) ITO vs Ryam Sugar Co.Ltd 105 ITR 819 (Cal) d) Jeewan Lal (1929) Ltd. Vs Addl.CIT 108 ITR 407 (Cal) 6. The ld. DR, on the other hand, relied on the orders of the authorities below. 7. As regards the first issue that the rectification order passed by the assessee is barred by limitation we find that the ld. CIT(A) has held that the AO has not revised order dated 22.03.2005 but he has revised order dated 19.12.2006 passed u/s 245/251/143(3) of the Act. In this regard the ld. CIT(A) has also placed reliance on the decision of the Hon'ble Apex Court in the case of Hind Wire Industries (supra). We find that the above order of the ld. CIT(A) is based upon the decision of the Hon'ble Apex Court in the case of Hind Wire Industries (supra). In the said case it was held that order in the expression from the date of the order sought to be amended in section 154(7) was not qualified in any way, it did not necessarily mean the original order it could be any order including the amended or rectified order. In this view of the matter we find no infirmity in the order of the ld. CIT(A) on this issue. In view of the Apex Court dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... different from the interpretation made in the earlier decisions by a smaller bench, the order which does not conform to the law laid down by the larger Bench in the later decision which decision would constitute the law of the land and is to be regarded as the law as it always was, unless declared by the court itself to be prospective in operation, would clearly suffer from a mistake which would be apparent from the record. 7.4. On the basis of the above reasoning the ld. CIT(A) has upheld that rectification of order u/s 154 of the Act by the AO on the basis of the subsequent decision of the Hon'ble Apex Court in the case of Liberty India (supra). We note that the Hon'ble Apex Court in the case of ACIT vs Saurashtra Kutch Stock Exchange Ltd. 305 ITR 227 (SC)vide order dated September, 15, 2008 has expounded in para 40 to 44 which read as under :- 40. The core issue, therefore, is whether non-consideration of a decision of Jurisdictional Court (in this case a decision of the High Court of Gujarat) or of the Supreme Court can be said to be a mistake apparent from the record ? In our opinion, both the Tribunal and the High Court were right in holding that such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n occasion to consider the issue of rectification of mistake u/s 154 of the Act. In the said decision the Hon'ble Apex Court had held that section 154 could not be invoked in a case of mere change of opinion. It was held that a rectifiable mistake was a mistake which was obvious and not something which had to be established by a long drawn process of reasoning or where two opinions were possible. A decision on a debatable point of law could not be treated as a mistake apparent from the record. In this case the Hon'ble Apex Court had reversed the decision of the Hon'ble Madras High Court. In the said decision the Hon'ble Apex court has referred with approval of the Hon'ble Calcutta High Court in the case of Jiyajeerao Cotton Mils Ltd. vs ITO 130 ITR 710. The Hon'ble Apex Court has observed as under:- We may no deal with the judgment of the Calcutta High Court in the case of Jiyajee Cotton Mills Ltd. v. ITO reported in [1981] 130 ITR 710. In that case, the appellantassessee derived profits from three industries, one which qualified for special rebate under Part I of Schedule I to the Finance Act, 1965, for the assessment year 1966-67. In granting this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the legal position which was earlier not correctly understood. 7.9. Now if we apply this later decision of the Hon'ble Apex Court we find that there was conflict of opinion as to whether DEPB/duty drawback/export benefit would come under the computation of profit eligible for deduction of section 80IB of the Act. This conflict of opinion was resolved by the Hon'ble Apex Court in the case of Liberty India (supra). It is an undisputed fact that at the time of filing of the return by the assessee there was conflict of opinion. The decision of the Hon'ble Apex Court in the case of M/s. Liberty India Ltd. came much later and in this view of the matter respectfully following the decision of the Hon'ble Apex Court in the case of Mepco Industries Ltd. (supra) we hold that there was a conflict of opinion prior to the decision and as such the mistake cannot be held to be a mistake apparent from the record to come under the ken of section 154 of the Act. Hence rectification of the mistake apparent from record u/s 154 on this issue cannot be upheld. In this view of the matter, in our considered opinion orders of the authorities below on this issue deserves to be set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X
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