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TMI Blog1971 (4) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... on business of manufacture and sale of safety razor blades, steel files, bandsaws, small tools and other articles. The petitioner alleges that during the course of the said assessment proceedings for the said assessment year before the Income-tax Officer the petitioner produced and/or caused to be produced various books of accounts, papers and other documents and had given various explanations, information and evidence that was necessary and/or required by the Income-tax Officer. The petitioner contends that the petitioner disclosed all primary facts and material facts necessary for the proper assessment. Since the assessment year 1952-53 onwards including the assessment year 1963-64 the petitioner had claimed and had been allowed deprecia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid officer informed the petitioner that the allowance of special depreciation on machinery for manufacture of safety razor blades at the rate of 10 per cent. was incorrect and excessive and was done inadvertently and erroneously inasmuch as the said machinery was entitled to the allowance of depreciation at the general rate of 7 per cent. The petitioner by its letter dated 27th October, 1970, recorded the said fact and stated that the notice did not disclose necessary particulars of the mistakes. The petitioner further stated that the petitioner was allowed depreciation at the special rate of 10 per cent. inasmuch as the manufacture of safety razor blades from steel strips was an " iron and steel industry ". The petitioner stated that acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax Officer had not retained the jurisdiction to take steps for rectification. At the hearing of this application no argument was advanced before me on the second aspect mentioned hereinbefore and counsel for the petitioner confined his submissions only on the first point. I, therefore, need not consider the second question at all. The short question with which I am concerned in this application, is whether, in the facts and circumstances of this case, the mistake that was proposed to be rectified was a mistake apparent from the record. Section 154 of the Income-tax Act, 1961, gives the authorities named in the section powers to rectify any mistake apparent from the record. Therefore, the exercise of the power is dependent upon there b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ix I of the Income-tax Rules, Part I, provides the statement at which depreciation is allowed. Item III is in the following terms " Machinery and plant " and the general rate allowed as mentioned is 7 per cent. In clause (ii) of item III certain items have been mentioned where special rates are to be applied to the whole of the machinery and plant used in certain named concerns and under the heading " I " comes the " Iron & Steel Industry " which has three sub-clauses. The Iron & Steel Industry is divided into two heads--one is rolling mill rolls which is category (a) where the depreciation is nil and the other is category (b) which is " other machinery and plant (blast furnace plant, steel making plant, steel rolling plant, forges, generat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned within the brackets. This will require investigation, in my opinion, both of facts as well as interpretation of law. It is not necessary for me to decide the question whether the petitioner's plant and machinery used for safety razor blades merit depreciation under this head or come under the general head of plant and machinery. But in view of the language used it appears to me that it cannot be said that it is an obvious and apparent mistake which is self-evident and does not require either a process of argument or investigation. If that is the position in law then, in my opinion, proceedings under section 154 cannot be initiated. Reliance may be placed for this proposition on the decision of the Supreme Court in the case of Maha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f-evident mistake. A mistake which had to be discovered by a long drawn process of reasoning or examining arguments on points, where there might conceivably be two opinions, could not be said to be a mistake or error which was apparent from the record. In the case of Volkart Brothers v. Income-tax Officer, Companies Circle IV(4), Bombay, more or less the same position was reiterated by the Bombay High Court. In the case of P. M. Bharucha & Co. v. G. S. Venkatesan, Income-tax Officer, Circle I, Ward A, Bhavnagar, the Gujarat High Court reiterates almost the same position. It, therefore, appears to me that the mistake, if any, in this case is one which cannot be called either obvious or glaring or self-evident. It is a mistake which appears f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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