Rectification jurisdiction cannot revisit a debatable development rebate claim when the original assessment took a possible view.

Rectification jurisdiction under section 154 cannot be used to revisit an assessment where the original allowance of development rebate rested on a debatable view of whether the reserve requirement was satisfied. Because the alleged defect in the balance-sheet and the admissibility of rebate involved more than one possible view, there was no manifest mistake apparent from the record. A successor Income-tax Officer could not invoke section 154 merely because he disagreed with the earlier assessment. The officer had no jurisdiction to act under section 154, and the issue was decided in favour of the assessee.

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Issues: Whether the Income-tax Officer could invoke rectification jurisdiction under section 154 of the Income-tax Act, 1961 on the facts of the case.

Analysis: The original assessment had allowed development rebate on the basis of a view taken by the assessing officer that the revised balance-sheet satisfied the statutory requirement, even though the original balance-sheet was technically defective. The alleged error depended on whether the reserve requirement was adequately met and whether development rebate was admissible on the items in question. These were matters on which more than one view was possible and could not be characterised as a manifest mistake apparent from the record. A successor officer could not use section 154 to revise a possible view taken in the original assessment merely because he disagreed with it.

Conclusion: The Income-tax Officer had no jurisdiction to act under section 154; the answer is in the negative and in favour of the assessee.

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