TMI Blog1985 (4) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated February 19, 1979: " 1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the mistake corrected by the successor Income-tax Officer was not covered by the provisions of section 154 of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the issue involved in this case was debatable ?" These two reference applications relate to the assessment years 1967-68 and 1968-69. The assessee-respondent is a private limited company which derived its income during the assessment years in question from dividends and interest. The assessee made investments in shares. It also derived interest income during the calendar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rectification orders on January 29, 1976, in respect of the assessment years 1967-68 and 1968-69 and revised the computation of the capital gains. The assessee went in appeal before the Appellate Assistant Commissioner. It was, amongst others, submitted by the assessee before the Appellate Assistant Commissioner that the case of the assessee was covered by the decision rendered by the Supreme Court in Emerald Co. v. CIT [1959] 36 ITR 257. The Appellate Assistant Commissioner, by a common order dated September 3,1976, allowed the assessee's appeals for the assessment years 1967-68 and 1968-69 and cancelled the rectification orders passed by the Income-tax Officer. Aggrieved, the Department went in further appeal. The Appellate Tribunal co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 567, applied without any dispute. Under such circumstances, it is difficult to say that a glaring and obvious mistake of law had arisen which could be rectified under section 154. 12. The basic issue in the present case is whether the value of the shares acquired originally or by purchase has to be modified by reference to the bonus shares immediately on their receipt by the assessee even though the bonus shares have not been sold and are in the stock of the assessee or whether such modification should be done at the stage at which the bonus shares themselves are sold. This issue did not arise directly in the case of Dalmia Investment Co. Ltd. [1964] 52 ITR 567. It did not arise in the case of Emerald Co. [1959] 36 ITR 257 also, bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of the assessment years 1967-68 and 1968-69. It has also been stated in its order rejecting the applications under section 256(1) of the Act that the issue involved was highly debatable and that the successor-Income-tax Officer purporting to act under section 154, in fact, sought to review or revise the order of the predecessor-Incometax Officer which is not covered by section 154 of the Act. Hence, the Commissioner of Income-tax has filed these two applications under section 256(2) of the Act. We have heard Mr. J. P. Joshi, learned counsel for the Revenue, and Mr. B. R. Arora for the assessee. The only question that arises in these applications is whether the Appellate Tribunal was right in refusing to state the case and refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r any other order passed by him ; (b) the Appellate Assistant Commissioner may amend any order passed by him under section 250 or section 271 (bb) the Inspecting Assistant Commissioner may amend any order passed by him in any proceeding under sub-section (2) of section 274 (c) the Commissioner may amend any order passed by him in revision under section 263 or section 264." The scope of section 154 was examined in T. S. Balaram, ITO v. Volkart Brothers [1971] 82 ITR 50 (SC). The following illuminating observations were made by Hegde J. (headnote): " A mistake apparent 'on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may be c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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