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2015 (4) TMI 408 - DELHI HIGH COURT

2015 (4) TMI 408 - DELHI HIGH COURT - TMI - Rectification of mistake - Whether while calculating the eligible business profits for the purposes of deduction under Section 80I the assessee is entitled to include the amount actually contributed in the assessment year 1992-93 to the Cooperative Education Fund under Section 61(1)(b) of the Multi State Cooperative Societies Act, 1984? - Whether the Tribunal was justified in holding that the contribution to the Cooperative Education Fund was not a ces .....

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debate and some process of reasoning, the decision in T.S. Balaram, ITO (1971 (8) TMI 3 - SUPREME Court) clearly held the field. In other words, the revenue could not legitimately contend that the view expressed by the CIT(A) given effect to by the AO in his initial order of 12.05.1995, was utterly implausible. Such being the case, the issue was debatable. Therefore, recourse to the power of rectification under Section 154 was unwarranted in the given facts of this case. - Decided in favour of t .....

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he eligible business profits for the purposes of deduction under Section 80I of the Income Tax Act, 1961 the assessee is entitled to include a sum of ₹ 91,32,404, the amount actually contributed in the assessment year 1992-93 to the Cooperative Education Fund under Section 61(1)(b) of the Multi State Cooperative Societies Act, 1984? 3. Whether the Tribunal was justified in holding that the contribution to the Cooperative Education Fund was not a cess falling within the purview of Section 4 .....

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t that stage, the assessee had inter alia urged that the relief was to be given under Section 80-I after the benefit of a deduction under Section 43B of the Act. The effect of the order was to bring to tax the said amount. The assessee preferred an appeal. The CIT(A), by the order dated 29.03.1995 observed that since the claim for eligible profits would go up in computation under Section 80-I, which directed 20% of the sum claimed, in effect, the deduction would further go up by ₹ 18,26,48 .....

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the AO under Section 250 granted the relief in terms claimed, i.e. to the tune of ₹ 18,26,481/-; revised forms were apparently issued to the assessee. Whilst so, on 22.05.1995 - after the effect was given on 12.05.1995, the AO issued a Show Cause Notice stating that the relief given on 12.05.1995 was on account of an inadvertent mistake. 4. The assessee contends that this notice was received much later - on 30.05.1995 - and that before it could be taken into consideration, the order withdr .....

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Education Fund u/s 61 (1)(b) of the Multi State Cooperative Education Fund Act, 1984 after giving an opportunity of being heard and thereafter to allow the same on merit. However, at the time of giving effect to the above order of the Ld. CIT(A) on other points, claim was also allowed on this point inadvertently through oversight whereas the issue is still to be decided and for which a letter dated 03.05.1995 has already been served on the assessee on 12.05.1995 requesting them to attend and exp .....

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ty Commissioner of Income Tax Special Range-12, New Delhi. Copy to the assessee Date: 31st of May 1995 5. The assessee again approached the CIT(A) which, after recapitulating the facts, reversed the rectification order on the basis of the following reasoning: 4. After hearing the arguments of the AR, I feel that firstly, the assessing officer has gone wrong in rectifying this order. It was correctly argued by the AR that it is not a mistake apparent from record and involved debatable point. Ther .....

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d the assessee is entitled to deduction u/s 80I of an amount of ₹ 18,26,481/-. 6. The revenue s appeal was accepted by the impugned order. The ITAT was of the opinion that the AO correctly rectified the order of 12.05.1995 on 31.05.1995 since on the merits, the payments to the Cooperative Education Funds were not in the form of cess and benefit of Section 43B could not be given. 7. Learned counsel for the assessee relies upon the decision of this Court in its own case for the same assessme .....

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once an appeal effect is given, it is open to the authorities - be it AO or the CIT(A) to seek recourse to the rectification proceedings if the issue or question of law is debatable. Learned counsel for the revenue urged that this Court should not interfere with the order of the ITAT. He submitted that given the language of Section 43B, the assessee could not have claimed that the payment to the Cooperative Education Funds were in the nature of a statutory impost or cess falling within the purv .....

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) ITR 50 (SC), it is only obvious and patent mistake and which cannot be established by long process of reasoning that fall within the jurisdiction to rectify. This Court had observed as follows: The only issue which arose for consideration before the Tribunal was whether a part of the relief granted to the respondent/assessee under section 80-I of the Act could be withdrawn by taking recourse of section 154 of the Act. The Tribunal, by placing reliance on various decisions of the apex court and .....

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