TMI Blog2009 (3) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of the application for rectification filed by the assessee in time as per CBDT's Circular No.73 dt.7.1.1972, he can as well rectify the other apparent mistakes on his own motion u/s.154(2) (a) which he finds at the time of passing the order on the assessee's application even if the limitation period of four years u/s.154(7) of the Act has expired? 2. The brief facts of the case are as follows :- (a) In respect of the assessee's return for the A.Y.1960-61, the ITO passed an order under Section 143(3) on 23.3.1965. (b) Aggrieved by this order of assessment the assessee filed an appeal before the Commissioner (Appeals) and one of the grounds of appeal raised by the assessee was that ITO had erred in rejecting the assessee's claim under Section 15(c) of the Income Tax Act. (c) The Commissioner (Appeals) by his order dated 27.2.1969 was pleased to allow the appeal and to grant the assessees claim under Section 15(c) which pertained to the profits of new industrial undertakings of the assessee. No further appeal was preferred against this order and thus the same became final. (d) The order of Commissioner (Appeals) was given effect to by the ITO vide his further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s questions and by an order dated 20.3.1989 the aforesaid question has been referred by the ITAT to this Court. 3. On perusal of section 154 of the Income Tax Act it is clear that a condition for the exercise of jurisdiction under Section 154 is the existence of "any mistake apparent from the record". The law relating to the question as to what is a mistake apparent from the record is well settled. In Arvind N. Mafatlal Vs. Income Tax Officer, North Satara, reported in 32 ITR 350, this Court was considering the scope of the jurisdiction under Section 35 of the Indian Income Tax Act 1922 which was paramateria to section 154 and in its judgment this Court defined the scope of the jurisdiction as under :- The jurisdiction of the Income-tax Officer under section 35 of the Indian Income-tax Act, 1922, is to rectify mistakes which are "apparent from the record" and is not restricted to rectification of mistakes which are clearly clerical or arithmetical. The expression "apparent from the record" should not be equated with the expression "apparent on the face of the record". The mistake to be rectified should, however, be a mistake "patent on the record and not a mistake which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debts due to the person carrying on the business, the nominal amounts of those debts ; (d) in the case of any other assets the value of the assets when they became assets of the business provided that if any such asset has been acquired within the computation period, only the average of such value shall be taken in the same manner as average cost is to be computed. (2) Where the price of any asset has been satisfied otherwise than in case, the then value of the consideration actually given for the asset shall be treated as the price at which the asset was acquired. (3) Any borrowed money and debt due by the person carrying on the business shall be deducted and in particular there shall be deducted any debts incurred in respect of the business for income-tax and super-tax or business profits tax or for advance payments due under any provision of the Indian Income-tax Act, 1922, or for any sum payable in relation to business profits tax under Section 13 of the Business Profits Tax Act, 1947 (XXI of 1947) ; Provided that any such debt for income-tax or super-tax or business profits tax shall, for the purpose of this sub-rule, be deemed to have become due- (a) in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not necessarily the debts as shown in the balance-sheet of the company. The debts as shown in the balance-sheet would comprise of debts owed as well as debts due. For example, sundry creditors could be creditors in favour of whom a debt was owed but due sometime in the future and there could also be sundry creditors to whom debt was actually due. 7. As regards the remuneration payable to the managing Agent it is also contended that under the Article of Association the remuneration payable to the managing agents was not to be paid until the accounts of the company for such financial year have been audited and laid before the company in a general meeting. Our attention was drawn to the relevant clause in the Articles of Association of the Company which was as under :- The remuneration payable to the Managing Agents for the time being for any financial year or part thereof shall not be paid until the accounts of the Company for such financial year have been audited and laid before the company in general meeting, provided, however, that the said minimum remuneration for every financial year may be paid by the Company to the Managing Agents by twelve monthly installments at the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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