TMI Blog2008 (10) TMI 672X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Income-tax (Appeals), Coimbatore against the assessment order. The Commissioner of Income-tax (Appeals), vide order in ITA No. 121-C/99-2000 dated 13-10-2000 disposed the appeal. The Joint Commissioner of Income-tax, vide order dated 24-10-2000 gave effect to the order of the Commissioner of Income-tax (Appeals) determining the loss of the assessee at ₹ 56,56,008. This order was rectified under section 154 by the Joint Commissioner of Income-tax on 15-2-2001 computing the loss of the assessee at ₹ 45,50,008. Consequent to the revision of the assessment for assessment year 1995-96, the Joint Commissioner of Income-tax, vide order under section 154 dated 20-4-2001 has recomputed the loss of the assessee at ₹ 81,87,920. There was a further revision order dated 1-7-2003 passed by the Assistant Commissioner of Income-tax, determining the loss at ₹ 45,50,368. There was another rectification order under section 154 dated 30-1-2004 passed by the Assistant Commissioner of Income-tax determining the loss for assessment year 1996-97 at ₹ 29,72,165. On 10-8-2005, the Assistant Commissioner of Income-tax passed an order giving effect to the orders of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant records. The learned Departmental Representative submitted that the learned Commissioner of Income-tax (Appeals) has not decided the issue on merits but he had quashed the assessment holding it to be time barred. The learned Departmental Representative pleaded that rectification under section 154 was done within four years of the earlier rectification order. Hence, he claimed that the rectification was within the provisions of section 154 of the Income-tax Act. For this, the learned Departmental Representative placed reliance upon the decisions in the following case law:- Hind Wire Industries Ltd. v. CIT [1995] 212 ITR 639 (SC) Waldies Ltd. v. CIT [1997] 223 ITR 163 (SC) Salem Co-operative Spg. Mills Ltd. v. CIT [1998] 230 ITR 139 (Mad.). 6. The learned counsel of the assessee, on the other hand, submitted that the rectification order was passed beyond four years period from the date of the order, the mistake in which was supposed to be rectified. The learned counsel of the assessee strongly relied upon the order of the learned Commissioner of Income-tax (Appeals). 7. We have carefully considered the submissions. Before examining the present case on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the order sought be amended was passed. (8) Without prejudice to the provisions of sub-section (7), where an application for amendment under this section is made by the assessee on or after the 1st day of June, 2001 to an income-tax authority referred to in sub-section (1), the authority shall pass an order, within a period of six months from the end of the month in which the application is received by it,- (a) making the amendment; or (b) refusing to allow the claim. A reading of the aforesaid clearly indicates that as per section 154(7), there is a limitation to rectify any mistake arising in any order four years from the end of the financial year in which the order is passed. 8. Now, we recapitulate the chronology of events in this case. The original order in this case was passed under section 143(3) dated 30-3-1999. The next rectification order dated 15-2-2001 was in connection with rectification of a mistake pertaining to section 80G deduction, which had crept in the Revision Order dated 24-10-2000 passed in this case to give effect to the Commissioner of Income-tax (Appeals)'s order. The next rectification order dated 20-4-2001 was related to allowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was entitled to depreciation allowance on the factory building at the rate of ten per cent. it was allowed depreciation only at the rate of five per cent. The Appellate Tribunal held that the application made on 4-7-1986, was within four years of the fresh order of assessment made on 12-7-1982, and hence within limitation. The High Court, on a reference, reversed the decision of the Tribunal. On these facts, the Hon'ble Apex Court held as under:- The word '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. The view taken by the Tribunal was the correct one and the High Court was wrong in setting aside the decision of the Tribunal (pp. 642C, 647D). A reading of the above clearly indicates that rectification order which was passed subsequent to the original order dealt with the matter of depreciation and the last impugned rectification order was also dealing with the matter of depreciation. It was in these circumstances the Hon'ble Apex Court had held that the order mentioned in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on 16-9-1968. The second rectification was, therefore, not barred by limitation. From the above, it is evident that the Hon'ble Apex Court had clearly upheld the rectification on the basis that the rectification which was being done was done to rectify the error in the amended order. 13. Hence, the Hon'ble Apex Court decisions cited by the learned Departmental Representative as discussed above not at all support the case of the revenue as the facts therein clearly indicate that, on matters of rectification in the impugned orders in those cases, the intervening rectification orders were on the same issue and hence the last rectification order was held to be valid with reference to the previous rectification order. Hence, the rectification order substituted the original assessment order only on matters they deal with. Thus this order in fact supports the assessee's case. In these circumstances, the impugned rectification in this case being with reference to matters in original assessment order and not with reference to matters dealt in intervening rectification order is barred by limitation. 14. It will be worthwhile to refer to the Hon'ble Apex Court deci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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