High Court directs Tribunal to refer question on rectification of assessment under Income-tax Act

The High Court allowed the petition filed by the Commissioner of Income-tax, directing the Tribunal to refer a question of law regarding the rectification of an assessment under section 154 of the Income-tax Act. The Court considered conflicting opinions among High Courts on including the value of materials supplied by the Government in the assessment, and based on its own decision, held that the question should be referred for decision. The issue revolved around whether the Tribunal was correct in affirming the Appellate Assistant Commissioner's view that there was no apparent mistake justifying the rectification.

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Issues involved:
The judgment involves a petition filed by the Commissioner of Income-tax under section 256(2) of the Income-tax Act, seeking a direction to the Tribunal to refer a question of law regarding the rectification of an assessment under section 154 of the Income-tax Act, 1961.

Details of the Judgment:

The assessee, a firm of contractors, had its assessment for the year 1970-71 rectified by the Income-tax Officer to include the value of materials supplied by the Government for execution of the contract. The Appellate Assistant Commissioner quashed this rectification, stating that no apparent mistake justified it. The Tribunal, citing a Supreme Court decision, refused to refer the question to the High Court, leading to the petition.

The High Court noted a conflict of opinions among High Courts on whether the value of materials supplied by the Government could be included in the assessment. The Tribunal's refusal to refer the question was based on the principle that a mistake apparent on the record must be obvious and not a debatable point of law. The revenue argued that the mistake was apparent based on the High Court's decision, while the assessee highlighted conflicting decisions in various High Courts.

The High Court, considering the conflicting opinions and the binding nature of its own decision, allowed the petition and directed the Tribunal to refer the question of law to the court for decision. The question pertained to whether the Tribunal was correct in affirming the Appellate Assistant Commissioner's view that there was no apparent mistake on the record justifying the rectification under section 154 of the Income-tax Act.

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