Interest under section 217(1A) was not rectifiable under section 154 where waiver under rule 40 made liability debatable.

The omission to charge interest under section 217(1A) could not be rectified under section 154 where the assessee contended that delay in completing the assessment was not attributable to it and that rule 40 waived the interest. Because applicability of rule 40 required consideration and the liability to interest was not free from doubt, the omission was not an obvious or patent mistake apparent from the record. The assessee therefore succeeded.

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Issues: Whether the omission to charge interest under section 217(1A) of the Income-tax Act, 1961 could be rectified under section 154 when the assessee contended that the delay in completion of assessment attracted waiver under rule 40 of the Income-tax Rules, 1962.

Analysis: The assessment was completed after a long delay from the date of the original return, and the assessee's case was that the delay was not attributable to it. On that footing, the applicability of rule 40 and the consequent waiver of interest was a matter requiring consideration. The existence of liability to interest was therefore not free from doubt, and the failure to charge it was not an obvious or patent mistake capable of rectification under section 154.

Conclusion: The omission to levy interest was a debatable matter and could not be corrected as a mistake apparent from the record. The assessee succeeded.

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