TMI Blog2011 (12) TMI 606X X X X Extracts X X X X X X X X Extracts X X X X ..... the following grounds of appeal:- 1. That order passed u/s 250(6) of the Income-tax Act, 1961 by the ld. CIT(A), Panchkula is against law and facts on the file in as much she was not justified to arbitrarily hold that action of the AO in holding that rectification is not possible is justified. 2. That she gravely erred in holding that as the issue of taxability of interest on compensation has traveled up to Hon'ble Supreme Court, the issue is debatable and thus, does not fall within the ambit of rectification u/s 154. 3. At the time of hearing of appeal bearing ITA No. 913/chd/2011, 914/Chd/2011 and 915/Chd/2011, it was submitted by the ld. authorized representative for the assessee that the ld. CIT(A) has passed a common order on 1.7.2011 disposing of 63 appeals filed by the assessee. It was further submitted by him that all the relevant details including copy of application filed u/s 154 on behalf of the assessee, sheet of computation of assessable income and TDS certificates dated 5.2.2007 issued by the Land Acquisition Officer have been filed in the case of Shri Balvinder Singh v. ITO, ITA No. 864/Chd/2011 and that they are equally relevant in the case of Shri Jai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Shri Bhupinder Singh v ITO in ITA No. 864/Chd/2011 contains a copy of the application filed by Shri Shiv Singla, authorized representative for the assessee which reads as under:- To The Income Tax Officer, Ward-3, Ambala Sub:- Rectification u/s 154 in the case of Shri Bhupinder Singh S/o Shri Gurbaksh Singh r/o Village, Saunda, Distt. Ambala having permanent Account number BTKPS 8321 J for the assessment year 2007-08. Respected Sir, The Assessee is agriculturist and was having agriculture land in village Saunda, District Ambala. The Land was acquired by Land Acquisition Officer. Assessee has received enhanced compensation of ₹ 6,70,583.00 and interest of ₹ 14,67,470.00 during the FY 2006-07 as per detail given as under: Cert No. Additional Compensation Interest Total l TDS 74 6,70,583 14,67,470 21,38,043 2,41,424 Assessee had filed his income tax return in your office vide return receipt number 6331014296 dated 13.3.2008 declaring his gross total income ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectify the order. Thanking you Yours Faithfully For Shri Bhupinder Singh (Shiv Singla) Counsel 7. It is evident on bare perusal of the chart showing computation of assessable income that interest on enhanced compensation was shown by the assessee in the year under appeal at ₹ 58,974/-. It is equally evident on bare perusal of the copy of application filed u/s 154 on behalf of the assessee that the assessee was seeking not only enhancement of interest from ₹ 58,974/- as shown in the return of income to ₹ 14,67,470/- and its inclusion in the enhanced compensation on the basis of judgment of the Hon'ble Supreme Court in CIT v Ghansham(HUF) 315 ITR 1 (SC) but also exemption of the whole amount of enhanced compensation including interest u/s 10(37). 8. The Assessing Officer considered the rectification application. He however, rejected the same with the following observations:- 3. Brief background of the case is that the assessee filed his return on 27.3.2008 declaring total income at ₹ 59,100/- after claiming exemption of ₹ 6,75,466/- u/s 10(37) of the Act in respect of the enhanced land compensation. The assessee also claimed cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said amount of interest (Rs.14,67,470/-) in place of ₹ 58,974/- shown by the assessee in his return of income and included the same in the enhanced compensation received by the assessee in the year under appeal following the judgment in CIT v. Ghanshyam (supra) and thereafter exempted the same u/s 10(37) as the enhanced compensation itself was exempt u/s 10(37). 11. Referring to the judgment in CIT v Aruna Luthra, 252 ITR 76 (P H), he submitted that rectification u/s 154 can be carried out on the basis of the judgment of the jurisdictional High Court and the Supreme Court rendered subsequently so as to rectify a mistake apparent from the record and therefore the Assessing Officer ought to have accepted the application filed on behalf of the assessee u/s 154. He submitted that this Tribunal has also held in a bunch of appeals, i.e., ITO, Ambala v. Devi Dayal and Others, ITA No. 561/Chd/2010 relating to assessment year 2007-08 involving identical set of facts, that the entire interest received u/s 28 of the Land Acquisition Act in a particular year was liable to the included in the enhanced compensation received in that year. According to him, the Tribunal has also held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. It has been held by the Hon'ble jurisdictional High Court in CIT v Aruna Luthra, 252 ITR 76 (P H) that rectification of an order/intimation can be carried out on the basis of subsequent judgment of the jurisdictional High Court/Supreme Court provided the mistake sought to be rectified is apparent from the record. Similar view has been taken in other judgments also, e.g., Mepco Industries Ltd v CIT, 319 ITR 208 (SC) in which it has been held that a subsequent judgment of the Supreme Court laying down a principle of law will be applicable across the board and rectification can be done on that basis. It is thus no longer res integra that subsequent judgments of the Supreme Court laying down a principle of law are applicable across the board and the rectification can be carried out on the basis of a subsequent judgment of the Supreme Court provided the mistake sought to be rectified is apparent from the record. However, the relevant questions in this behalf are two-fold: one, whether the existence of a rectifiable mistake in the order, which is sought to be rectified, is a condition precedent for exercising rectificatory jurisdiction u/s 154, and two, whether the foundation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctional High Court, the Tribunal could not have held that the issue was debatable. In the aforesaid factual matrix of the case, the Hon ble High Court has held as under: On a perusal of section 154, we find that the provision does not provide for rectification only when a mistake in the order is detected. The mistake has to be on the record of the case. The record would include everything on the case file. The return, the evidence and the order are a part of the record. The mistake can be detected from anything on the file. Thus, even in case of an assessment under s. 143(1), it has not to be assumed that there can be no error apparent from the record. As for the decision in the case of Hero Cycles (supra), the rule laid down by their Lordships is that the mistake can be of fact and law. However, the rectification can be made only when a glaring mistake of fact or law committed by the officer passing the order becomes apparent from the record. Rectification is not possible if the question is debatable . We cannot read this decision to mean that only the order has to be seen and not the record. Thus, the contention raised by the counsel cannot be accepted. It was also contended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sought to be rectified must exist and the same must be apparent from the record. (ii) Mistake means to take or understand wrongly or inaccurately; to make an error in interpreting; it as an error, a fault, a misunderstanding, a misconception. Apparent means visible; capable of being seen, obvious; plain. It means open to view, visible, evident, appears, appearing as real and true, conspicuous, manifest, obvious and seeming. (iii) A mistake which can be rectified is one which is patent, which is obvious and shows discovery and is not dependent or at argument or elaboration. Though a mistake capable of being rectified is not confined to clerical or arithmetical mistake, it does not however, cover any mistake which may be discovered by a complicated process of investigation, argument or proof. The decision on a debatable point of law or fact or failure to apply the law to a set of facts which remains to be investigated cannot be corrected by way of rectification. (iv) Rectification of an order does not mean obliteration of the order originally passed and its substitution by a new order. (v) Where an error is far from self evident, it ceases to be an apparent error a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sum of ₹ 58,974/- to tax without any indication that the interest being returned by the assessee was received u/s 28 of the Land Acquisition Act. There is no indication even in the copy of chart of computation of income as filed before us that the interest shown by the assessee in the return of income was received by the assessee u/s 28 of the Land Acquisition Act. A copy of the TDS certificate (No.74) has also been filed before us. It also does not show that the interest was received by the assessee u/s 28 of the Land Acquisition Act. The AO simply acknowledged the return and granted refund to the assessee without carrying out any adjustment so much so that he did not even touch upon the issue of exemption u/s 10(37) as claimed by the assessee in his return of income. These facts clearly establish that no mistake exists in any order, intimation, etc., which can be rectified u/s 154. Rectification u/s 154 pre-supposes the existence of a mistake in an order, intimation, etc., which is sought to be rectified. None of the papers filed by the assessee shows any mistake which can be termed as self-evident or apparent from the record. It is quite possible that the assessee may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent. Therefore, the mistake pointed out by the assessee cannot be said to be a mistake apparent form record. 23. It is claimed by the assessee that the interest, being part of the enhanced compensation, is exempt u/s 10(37). Exemption u/s 10(37) is available on the fulfillment of the conditions enumerated therein. Therefore the claim of the assessee that interest would be exempt u/s 10(37) would also require examination in the light of the provisions of section 10(37). True, the assessee has claimed exemption u/s 10(37) in respect of enhanced compensation in his return of income but no material has been placed before us to establish that the conditions laid down in section 10(37) have been fulfilled. The claim of the assessee that the interest received by him is exempt u/s 10(37) would therefore require examination of the claim of the assessee in the light of the provisions of section 10(37), which cannot be undertaken in proceedings u/s 154. The judgment in Ghanshyam (supra) does not lay down any such proposition that the interest received under the Land Acquisition Act would always be exempt u/s 10(37). Besides, it is a matter of debate as to whether the impugned interest is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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