Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (7) TMI 1082 - MADRAS HIGH COURT

2015 (7) TMI 1082 - MADRAS HIGH COURT - [2016] 380 ITR 504 - Scope of rectification of mistake - Held that:- From a reading of the Circular No. 68, dated November 17, 1971 issued by the Board relating to rectification of mistakes relied on by the assessee, it would be evident that the above circular would be relevant in a proceeding under section 154 only in relation to such issues, which have already been considered in the order and have subsequently been put to rest by the decision of the Supr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of appeal but restricted itself to only three substantial issues, which were decided against the assessee, which was subsequently affirmed by the Supreme Court. Further, an application under section 154 was also pursued simultaneously, which we find is akin to riding two horses at the same time. Unfortunately, the assessee having abandoned the plea before the High Court, the plea, which was raised in the section 154 application would clearly show that it is a new plea, which they want to pursue .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

taken by the appellant that consequent to disallowance of depreciation, the income should also be deleted, has no legs to stand. That fact was not the issue in the first round of appeal. At best it may be treated as a finding of the Assessing Officer, accepted by the assessee and abandoned in the course of appeal proceedings but it cannot be said that it is a mistake apparent on record warranting invocation of rectification proceedings under section 154 of the Act. For the reasons abovesaid, thi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

son is estopped in pursuing parallel proceedings before two authorities for the same relief. Therefore, the Tribunal was correct in declining to interfere with its earlier order and dismissing the application, as there was no scope for rectifying any mistake, since there was no mistake apparent from the record, as envisaged under section 154(1A), in view of the findings rendered earlier. For the reasons aforesaid, the substantial question of law is answered in favour of the respondent-Revenue an .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

536 of 2005 and 590 of 2008, framed the following substantial questions of law for consideration : "TCA No. 536 of 2005 (1) Whether the Tribunal is right in law in holding that section 154(1A) is a bar to the rectification of the errors in question ? (2) Whether the Tribunal is right in its interpretation of the scope of section 154(1A) and in its conclusion that notwithstanding the question of the inclusion of the rental income not being in issue in the appeals before the Tribunal and the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to be bogus, the appellant is not entitled to seek rectification under section 254(2) of the Income- tax Act for the exclusion of lease rentals which have been included in the total income in the returns ?" 2. Section 154(2) of the Income-tax Act provides for rectification of mistake. In these appeals, we are now concerned with an application filed by the assessee under section 154(1A). Section 154(1A), clothes the authority, who passed the order, with power to deal with the order, for the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the authority passing such order may, notwithstanding anything contained in any law for the time being in force, amend the order under that sub-section in relation to any matter other than the matter which has been so considered and decided." 3. Mr. Sridhar, learned counsel appearing for the appellant, has raised a legal plea that despite the issue being held against the assessee in the assessment order, which has subsequently been confirmed by the Commissioner of Income-tax (Appeals), the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

32 of the Income-tax Act (for short "the Act"), was conducted on August 7, 1996, and consequent to the search, block assessment under section 158BC of the Act was framed by the Assessing Officer for the block period comprising assessment years 1993-94 to 1996-97 on October 29, 1997. Prior to the search, the appellant-assessee had filed regular return of income for the various years. In the original return of income filed for the assessment year 1995-96, prior to the date of search, the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed block returns in Form 2B for the assessment years 1993-94 to 1996-97 in response to the notice issued by the Assessing Officer under section 158BC of the Act. In that, the appellant maintained the original claim of income/lease as well as depreciation. 5. In the course of search proceedings, the transaction of the assessee in respect of the agreement with Duckfin International Pvt. Ltd. relating to leasing of continuous pusher type furnaces on sale and lease back was found to be fictitious. T .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

) of the Income-tax Act agreed for surrender of ₹ 1.31 crores on claim of depreciation in the return and to admit it as income. Since he himself agreed for this surrender there is no valid reason for him to take a different stand at this state. The entire transaction is routed as money transaction for non-existing assets and it is a money lending business. The asset has already suffered depreciation. Therefore, the assessee's acceptance before the authorities for surrender of depreciat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ussed above : In paragraph 5 depreciation has been withdrawn 1,30,38,000 In paragraph 7, 5 per cent. on lease expenses of ₹ 3,61,64,802 has been disallowed 18,08,240 Undisclosed income for the block period 1,48,46,240 Tax calculation Income-tax thereon 89,07,744 Add : Surcharge 13,36,162 Balance payable 1,02,43,906 This should be paid as per demand notice and challan enclosed. 7. Aggrieved by the order passed under section 158BC, the assessee filed an appeal before the Tribunal. The Tribun .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tion 24 : I am showing you a copy of statement of Shri Deepak Bhargava, Director (Finance) of M/s. Duckfin International Ltd., dated August 1, 1996, wherein it is stated that no asset has been provided or installed at any of this factory premises and the suppliers M/s. Paras Inds. are paper concerns only. What do you have to say particularly in view of the fact that the assets leased by you have not been identified by you and you have not taken any machinery number such particulars as mentioned .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n International in the financial year 1994-95. We shall file the return for the block period and pay the taxes accordingly." 8. The Tribunal, after considering the plea of the assessee that it is a genuine transaction and the challenge to the assessment order under section 158BC on the merits, and taking into consideration the statement recorded from the managing director, on oath, coupled with the documents, which proved that there was a false and bogus claim, came to hold that the assessm .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion of the courts were based on the fact that search proceedings are not necessarily the starting point for the framing of the regular assessment. However, these decisions would have no applicability at all in view of the special provisions for search cases having been introduced in the statute. As mentioned earlier, section 158B of the Act while defining the block period refers to the period of search ending with the period in which the search was made under section 132 of the Act. It also draw .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e same." 9. Aggrieved by the said order, the assessee pursued the matter in appeal, TCA No. 238 of 2001, before this court. It would be useful and relevant to extract the grounds raised by the assessee in the appeal before the Tribunal, which forms part of the papers filed in the appeal before this court : "Aggrieved by the said order the appellant preferred an appeal to the Tribunal wherein the following issues were canvassed in support for quashing the said block assessment order. (a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tegorically explained and affirmed the entire transaction except in the answer to the last question on difference consideration. (d) The disallowance of a claim would not come within the pur view of the definition of 'undisclosed income' as defined in section 158B of the Act so as to make a block assessment. (e) Bona fide nature of the said claim was not considered while framing the assessment inasmuch as the assets were inspected by the officials of M/s. Bank of Madura, Authorities of t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ng arguments were advanced : (a) Estimated disallowance would not be considered as undis closed income within the definition. (b) All the details were provided to support the expenses. (c) No opportunity was given before the said disputed disallow ance. The appellant had also objected the correctness of the chargeability of surcharge by the respondent." 10. The assessee also challenged the order of the Tribunal by raising the following grounds in its appeal before this court : "(vi) Th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ular returns filed before the date of search the appellant had shown the lease income from the said transaction and further failed to appreciate that surrender of depreciation claim in the sworn statement should be considered in the context of admission of the said lease income in the regular return inasmuch as in any event the difference of the said amount of depreciation claim and the lease income in the regular returns filed for the respective years should alone be assessable under the block .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ence to estimated disallowance of lease expenses of 5 per cent on the total claim. (xxv) The Tribunal failed to give any finding on the submissions and arguments with regard to the correctness of chargeability of surcharge while making the computation of undisclosed income in terms of Chapter XIV-B of the Act." 11. Nine substantial questions of law were raised in the appeal, TCA No. 238 of 2001. Though so many questions of law were raised, at the time of hearing of the appeal, the very same .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rtunity of hearing and necessary copies of documents were not furnished ; and (c) that the depreciation on two continuous push type furnaces that were leased to M/s. Duckfin International Ltd. was not allowed." 12. The Bench, after hearing either side, disposed of the matter on April 19, 2004, rejecting the plea of the assessee on all the three issues. On the first issue, the court held that the Tribunal, on verification of the original records, came to hold that approval was granted by the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ernational Ltd., for leasing continuous push type furnaces on sale and lease back transaction. M/s. Paras Industries manufactured the furnace and delivered to M/s. Duckfin International Ltd., which were installed at the cost of ₹ 66 lakhs each. The same is stated to have been entered into by the assessee with M/s. Duckfin International Ltd., on sale and lease back transaction at ₹ 1,30,38,000. When the search was conducted at the business premises of the assessee at Mumbai, no lease .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

by virtue of this lease deed. He also stated that M/s. Paras Industries does not exist and the so- called lease was more paper transaction and the assets mentioned in these leases did not exist. When Mr. Balakrishnan, managing director was confronted, he surrendered on behalf of the company the depreciation claimed to the tune of ₹ 1.30 crores on the assets leased to M/s. Duckfin International Ltd. That being so, the depreciation on two continuous push type furnaces that were leased to M/s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

38 of 2001 was pending before this court, it appears that the assessee filed a petition on March 1, 2002, under section 154 of the Act for rectification before the Assistant Commissioner of Income-tax, Company Circle VI(4), praying to delete the lease rental of ₹ 86.94 lakhs offered as income. On March 14, 2002, supplementary petition under section 154 was filed before the Assessing Officer praying for deletion of ₹ 18,08,240 being ad hoc disallowance at the rate of 5 per cent. of th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the said appeal in their order dated April 12, 2001. It is further submitted that in the light of the said factual position, the entire order of the Tribunal is liable to be recalled for fresh hearing in the interest of justice. To fortify the above submissions, the petitioner is bringing to the notice of the hon'ble Bench the following issues which are originally agitated and not considered while passing the said order : (a) Denial of opportunity to cross-examine Mr. Deepak Bargava of M .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ined in section 158B of the Act. (e) Declaration of the lease income from the said transaction in the regular returns before the date of search would clearly indicate to the effect that the said disallowance of depreciation would not lead to the legal presumption to the effect that there was no undisclosed income to be assessed in terms of Chapter XIV-B of the Act. In the alternative depreciation claim might be considered as undisclosed income subject to the due set off for the lease income admi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d under bonafide circumstances based on the materials placed on record and as a consequence while rejecting the said transaction as sham the loss arising on account of the same should be considered for allowability in terms of section 28 of the Act. (i) Disallowance of lease charges on an estimated basis was wrongly made. (j) Surcharge was levied as against the rate of taxation prescribed for Chapter XIV-B assessment. In the circumstances, it is prayed that the order of the Tribunal dated April .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ny decision on admissibility of depreciation claim arising out of the said transaction." 16. In the petition filed under section 154, the appellant has highlighted the erroneous computation made with regard to the undisclosed income. For better appreciation, the relevant portion of the petition is extracted hereinbelow : "11. In the light of the conclusion by the assessing authority that there was no genuine lease transaction on the ground that there was no existing asset in respect of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

year 1996-97, while at the same time disallowed the claim for depreciation amounting to ₹ 1,30,38,000. 12. The petitioner states and submits that the inclusion of the aforesaid lease rental income in the total income for the block period while disallowing the claim for depreciation in respect of the same asset in respect of which the lease transaction was claimed by the petitioner amounts to a patent error, which is liable to be rectified. The error comprises either in including the lease .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ck period. 13. The petitioner in the above circumstances submits that the computation of the undisclosed income for the block period is erro neous in so far as it has included the lease rental amounting ₹ 86,94,000 and the said mistake has to be rectified by excluding the said amount from the total income computed. Accordingly, the petitioner states and submits that as against the undisclosed income for the block period determined at ₹ 1,48,46,240 the lease rental income included the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rom levying tax on the undisclosed income determined by the assessing authority at the rate of 60 per cent. he has added surcharge amounting to ₹ 13,36,162. The petitioner states and submits that surcharge is not leviable in respect of an assessment under Chapter XIV-B. Surcharge is levied under the Finance Act relating to each year. In so far as the block assessment is made for a block period and not for any specific year of assessment, surcharge cannot be levied in respect of such an ass .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r that came to be passed by the Assistant Commissioner of Income-tax under section 154 of the Act, the following four issues were considered : "(i) Exclusion of lease rentals of ₹ 86.94 lakhs from the undisclosed income computed in the assessment order dated October 29, 1997. (ii) Rectification of calculation mistake in the computation of undisclosed income. (iii) Recomputation of Income-tax on the income arrived at after the above rectification. (iv) Deletion of surcharge." 19. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

king up proceedings under section 154. The relevant portion of the order, for better appreciation of the case, is quoted hereinbelow : "From the facts, it will appear that since the asset did not exist, the transaction was treated as a finance transaction and the claim for depreciation on the non-existing asset was disallowed. It is not the assessee's case that it did not receive the lease rentals. The question whether the money received in the name of lease rentals is the asses see' .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e termed as a mistake apparent from records." 20. On the issue of disallowance of 5 per cent. of lease expenses, it was held that the same cannot be termed as a mistake apparent from the records and the said issue being a legal issue, cannot be agitated in a petition filed under section 154. Further, the assessee has taken up this issue as well in the miscellaneous petition filed before the Tribunal and, for the above reasons, the said contention was rejected. The relevant portion is extrac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he assessee was verified and found to be baseless and was accordingly rejected. On the imposition of surcharge, it was held that the matter having already been taken up before the Tribunal in the miscellaneous petition, the said issue was not gone into. The relevant portion of the order is extracted hereinbelow : "6. It is submitted by the assessee's representative that there is an arithmetical error in the computation of undisclosed income made in the assessment order. I find that the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ly the undisclosed income . . . 8. The next contention is that surcharge is not leviable in a block assessment and reliance is placed in the decision of the Income-tax Appellate Tribunal, Bangalore Bench, in the case of Microland Ltd. v. Asst. CIT [1998] 67 ITD 446 (Bang). Under section 113, the total undisclosed income of the block period shall be chargeable to tax at 60 per cent. and the Finance Act of each year provides that the amount of Income-tax computed in accordance with the provisions .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

decided the matter on August 9, 2002, by upholding the order of the adjudicating authority in the following manner : "2. The appellant is aggrieved with the above findings of the Assessing Officer. The grounds and the subsequent written submission filed has been duly considered. I find from these grounds that the appellant is merely arguing on the merits of the issue rather than on the scope of the section 154. It is also important to note that the substantive appeal has already been dismi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oceedings under section 154 and the findings thereon is confirmed." 23. Further appeal by the assessee to the Tribunal came to be dismissed on September 15, 2004. The Tribunal was of the view that there was no scope for considering an issue, which has already been considered and decided in the appeal by the hon'ble High Court. The Tribunal further went on to interpret section 154(1A) and held that the scope of section 154(1A) provides that matters which were considered and decided by th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the order is set out hereunder : ". . . The powers of the Assessing Officer under section 154 of the Act flow from the provisions of that section only. The language of section 154(1A) of the Act makes it abundantly clear that the matter which is considered and decided by the appellate authority cannot be rectified. The matter means all facts of the matter which come within the scope of the appeal. If the appeal is filed relating to the matter and the same was considered and decided or be tr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

claimed depreciation, which ultimately proved to be bogus and the assessee itself offered the income during search, then it is not open for it to re-agitate through rectification under section 154 of the Act for exclusion of lease rentals which has been declared by itself in the block return. 12. In view of the above, we are of the considered opinion that the issues taken up by the assessee are debatable and these cannot be taken up by way of rectification under section 154 of the Act. Even othe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d order, the other appeal, TCA No. 590 of 2008 is filed against the dismissal of the miscellaneous application by the Tribunal on the ground that the appellant cannot seek rectification under section 254(2) to rectify the mistake apparent on record. 25. The application for rectification under section 254(2), viz., M. P. No. 70 of 2001, has been admittedly filed before the Tribunal after the appeal has been disposed of by the High Court and the Supreme Court. Against the order passed by the Tribu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion 154(1A). Since the income from lease was not an issue raised and decided in the appeal or revision and the entire grounds raised in the appeal being in relation to false claim of depreciation, the application under section 154 of the Act to delete the lease income is in order. The application under section 154 actually flows as a consequence of the proceedings culminating before the Supreme Court. The sole object of the order is disallowance of depreciation holding the transaction as bogus o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cation filed by the assessee under section 35/154 of the Act would be in order, provided the same is filed within the period of limitation. 27. Learned counsel for the assessee also relied upon the decision of this court in the case of CIT v. Lakshmi Vilas Bank [2010] 329 ITR 591 (Mad), to drive home the point that issues, which have not been decided earlier can be raised in an application filed for rectification under section 154. 28. The decision of the Calcutta High Court in the case of CIT v .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

-existent order. 29. Mr. Swaminathan, learned standing counsel appearing for the respondent-Department, submitted that the assessee having abandoned the plea in the first round of litigation, which has reached finality, cannot now raise a new plea under the guise of rectification of mistake. To buttress this argument, the learned counsel for the Revenue relied upon the decision of the Orissa High Court in Utkal Galvanizers P. Ltd. v. Asst. CIT [2008] 298 ITR 53 (Orissa), wherein the Orissa High .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

light of the facts, as culled out from the typed set filed by the appellant, this court would like to examine the provisions of section 154 of the Act as to the powers vested on the authority in relation to rectification of mistakes apparent on record. 32. Section 154 of the Income-tax Act provides for rectification of mistake. In the present case, this court is concerned with an application filed by the assessee under section 154(1A). For better appreciation of the case, at the risk of repetiti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to in sub-section (1), the authority passing such order may, notwithstanding anything contained in any law for the time being in force, amend the order under that sub-section in relation to any matter other than the matter which has been so considered and decided. (2) Subject to the other provisions of this section, the authority concerned- (a) may make an amendment under sub-section (1) of its own motion, and (b) shall make such amendment for rectifying any such mistake which has been brought .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t, where any matter is considered and decided in any proceeding by way of appeal or revision relating to an order referred to under sub-section (1), i.e., the order that is sought to be rectified, the authority passing such order may amend the order under sub-section (1) in relation to any matter other than the matter, which has been considered and decided. A reading of this provision would only mean that the power to rectify the mistake in the order should not be in relation to the issues consi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

correct mistakes apparent on the face of the record. Interpretation of the legal provisions and claims based upon such interpretation cannot be a ground to seek rectification of the order already passed. 34. In Utkal Galvanizers P. Ltd. v. Asst. CIT [2008] 298 ITR 53 (Orissa), the Orissa High Court, while dealing with the scope of rectification of mistakes apparent on record in an application filed under section 154 held that the power vested under section 154(1A) is limited to mistakes apparent .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nge the same in the second appeal before the Tribunal. In the absence of any challenge permitting the Assessing Officer to vary or review or revise his own order under a plea of correcting the mistake as contemplated under section 154 is to in effect allow him to override or overreach the order passed by the higher authorities in appeal or revision. This is clearly not the intention of legislation of section 154(1A) of the Income-tax Act. We are of the view that the scope of section 154(1A) rema .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

as we find that the following observations of the court would only throw light in support of our findings in the present case, as made above (page 598 of 329 ITR) : In the judgment reported in CIT v. Hero Cycles Pvt. Ltd. [1997] 228 ITR 463 (SC), the hon'ble apex court was pleased to hold that a rectification under section 154 can only be made when there is a glaring mistake of fact or law committed by the officer passing the order becomes apparent from the record. In the said case, the iss .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e is no debatable issue involved. In the judgment reported in Utkal Galvanizers P. Ltd. v. Asst. CIT [2008] 298 ITR 53 (Orissa) the issue of merger was considered by the Division Bench of the Orissa High Court. In the said case, the issue which was decided earlier before the appellate authority was sought to be raised again before the Assessing Officer by invoking section 154. Therefore, under those circumstances, the Division Bench of the Orissa High Court was pleased to hold that when an issue .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

elied upon by the learned counsel appearing for the Revenue is also not applicable to the present case on hand . . . In the judgment reported in CIT v. Y. K. Shoji Stone Indo P. Ltd. [2008] 304 ITR 390 (Mad) (in which one of us is a party K. Raviraja Pandian J.) it has been observed as follows (page 393 of 304 ITR) : "It is well recognised law that any erroneous assessment cannot be the subject matter for rectification under section 154 of the Income-tax Act. The erroneous order of assessme .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

reasoning on the point in issue on which there may be conceivably two opinions. A decision on a debatable point of law cannot be regarded as a mistake apparent on the face of the record amenable for rectification under section 154 of the Income-tax Act. Useful reference can be had to the judgments of T. S. Balaram, ITO v. Volkart Brothers reported in [1971] 82 ITR 50 (SC) and CIT v. Hero Cycles Pvt. Ltd. reported in [1997] 228 ITR 463 (SC). Hence, we do not find any question of law, much less, s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

elow : "The Board are advised that a mistake arising as a result of sub sequent interpretation of law by the Supreme Court would constitute 'a mistake apparent from the records' and rectificatory action under section 35/154 of the 1922 Act or the 1961 Act would be in order. It has, therefore, been decided that where an assessee moves an application under section 154 pointing out that in the light of a later decision of the Supreme Court pronouncing the correct legal position, a mist .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he point at issue may please be withdrawn." 37. From a reading of the above circular, relied on by the assessee, it would be evident that the above circular would be relevant in a proceeding under section 154 only in relation to such issues, which have already been considered in the order and have subsequently been put to rest by the decision of the Supreme Court and, thereafter, it can be a ground for rectification. If, in the original order, there is no such issue, a new plea, based on a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

quently affirmed by the Supreme Court. Further, an application under section 154 was also pursued simultaneously, which we find is akin to riding two horses at the same time. Unfortunately, the assessee having abandoned the plea before the High Court, the plea, which was raised in the section 154 application would clearly show that it is a new plea, which they want to pursue in terms of the provisions of section 154. 39. Yet another factor, which goes against the assessee in the original order i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d. That fact was not the issue in the first round of appeal. At best it may be treated as a finding of the Assessing Officer, accepted by the assessee and abandoned in the course of appeal proceedings but it cannot be said that it is a mistake apparent on record warranting invocation of rectification proceedings under section 154 of the Act. For the reasons abovesaid, this court holds that the provisions of section 154(1A) does not provide for rectification in the manner, which the appellant now .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version