AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2011 (12) TMI 223
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....g that rectification is not possible, is justified. 2. That she gravely erred in holding that as the issue of taxability of interest on compensation has traveled upto Hon'ble Supreme Court, the issue is debatable and thus, does not fall within the ambit of rectification u/s 154." 4. At the time of hearing, ld. 'AR' submitted that the ld. CIT(A) had passed a common order on 1.7.2011 disposing of 63 appeals filed by various appellants. The ld. 'AR' was, of the opinion that the order passed by the CIT(A) Panchkula is against the facts on file. He further submitted that in view of the decision of the Hon'ble Supreme Court in the case of CIT v. Ghanshyam (HUF) [2009] 315 ITR 1/182 Taxman 368, the facts of the appeals falls under the provision of Section 154 of the Act. 5. Ld. 'DR', on the other hand, contended that the provisions of Section 154 are not applicable to the facts of the present cases as there is no mistake apparent from the record. The issue raised by the ld. 'AR' does not owe its origin to the material available in the assessment record. Hence, it does not fall under the purview of Section 154 of the Act. 6. The brief facts of the case, as culled out from t....
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....oating on surface of the assessment record. If mistake of law or fact has to be established by construing the words of a Section to find its proper meaning, then such an error cannot normally be a rectifiable error. The Supreme Court in the case of T.S. Balaram, ITO v. Volkart Bros. [1971] 82 ITR 50 held "It is not open to the ITO to go into the true scope of relevant provisions of the Act in proceeding u/s 154 of the Act. 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 of points on which there may, conceivably two opinions." A decision on a debatable point of law is not a mistake apparent from record. The power of rectification u/s 154 of the Act cannot be understood to review, revise or reconsider the substantial decisions, taken after due consideration of law and facts. In a nut-shell, mistake apparent from record, u/s 154 of the Act must be self evident, obvious and patent mistake of facts or law which is floating on the surface of the record and not the mistake which can be discovered or discerned or established by way of discussions, debate and investigation into the issue. ....
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....) to determination of tax, interest payable or refundable to the assessee only and not beyond that, as what cannot be done directly u/s 143(1) cannot as well be done indirectly by taking resort to Section 154(b). Making any adjustment to the returned income by way of rectification u/s 154 will be amounting to do an act that cannot be done directly under the provisions of Section 143(1). 9. The Hon'ble jurisdictional High Court has held in the case of Punjab State Co-op. Supply & Marketing Federation Ltd. v. Dy.CIT [2008] 173 Taxman 15 (Punj. & Har.) that the omission of assessee to claim deduction in the return or during the course of assessment proceedings, is not a mistake apparent from record. 10. The facts of the present case are covered by the decision of the Hon'ble Supreme Court in the case of CIT v. Hero Cycles (P.) Ltd. [1997] 228 ITR 463/94 Taxman 271 wherein it has been held that rectification u/s 154 can only be made when glaring mistake of fact or law has been committed by the officer passing the order and it becomes apparent from the record. Rectification is not possible if the question is debatable. Moreover, the point which is not examined on fact or in law, canno....
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.... the CIT(A) on 1.7.2011 in the case of Shri Jai Singh shows that the assessee had filed his return of income on 27.3.2008 returning total income at Rs. 59,100/- after claiming exemption for a sum of Rs. 6,75,466/- u/s 10(37) in respect of enhanced compensation on acquisition of land. The assessee also claimed credit for a sum of Rs. 82,480/- being the tax deducted at source out of interest, in the return of income. The return was processed u/s 143(1) without any adjustment and refund was accordingly granted to the assessee. 5. Paper book filed by the ld. authorized representative for the assessee in the case of Shri Bhupinder Singh in ITA No. 864/Chd/2011 contains a sheet of computation chart for assessment year 2007-08 which reads as under:- 'Computation of Assessable Income Income from other sources Enhanced Compensation received from Land acquisition officer though Certificate No. 74 670583.00 Intt. received on Enhanced compensation From Land Acquisition officer through Certificate No. 74 from 1.4.2006 to 31.10.2006 (670583*15%*7/12) 58974.56 Total Inco....
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....return of income file on 13.3.2008. Assessee has received above said interest u/s 28 of Land Acquisition Act. In view of the apex court judgment above said interest now forms part of enhanced compensation. Meaning thereby that whole of the interest and enhanced compensation received by the assessee is to be accounted for in the assessment year 2007-08 itself and Tax deducted on it also to be accounted for in the assessment year 2007-08. Assessee qualifies all the conditions as specified in section 10(37). Hence whole the receipts are exempt u/s 10(37). Hence, interest declared in return of income is now exempt as per apex court judgment. Assessee has claimed only interest and enhanced compensation of Rs. 7,29,558.00 in the return and balance amount of interest and enhanced compensation Rs. 14,08,495.00 (Rs. 6,70,583.00 + Rs. 14,67,470.00 - Rs. 7,29,558.00) is to be added. Accordingly proportionate TDS credit is to be taken. The judgment of the apex court has come after filing of the return. The rectification is sought in view of the apex court judgment. Section 154 clearly specifies that a mistake arising as a result of subsequent interpretation of law by the supreme court const....
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.... case because the assessee has neither claimed the relevant relief in his original return nor any return has been revised to this effect as per the relevant provisions of the law. For the similar reasons, the facts of the assessee's case are distinguishable from the case of ACIT v. Saurashtra Kutch Stock Exchange Limited, 305 ITR 227 also as there was no mistake in the AO's order passed w.r.t. the facts reported in the return. 5. Therefore, in view of the afore-discussed facts of the case, the assessee's application is not found to be acceptable, and is accordingly rejected." 9. Aggrieved by the order passed by Assessing Officer, the assessee filed appeal before the CIT(A). The ld. CIT(A), however, dismissed the appeal for the reasons given in his appellate order. 10. Aggrieved by the order passed by the CIT(A), the assessee is now in appeal before this Tribunal. In support of appeal, the ld. authorized representative for the assessee submitted that the judgment of the Supreme Court in CIT v. Ghansham (HUF), 315 ITR 1 (SC) has finally settled the issue that the amount of interest received u/s 28 of the Land Acquisition Act was part of the enhanced compensation and therefore liab....
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....from compensation. However, interest paid on the excess amount under section 28 of the 1894 Act depends upon a claim by the person whose land is acquired whereas interest under section 34 is for delay in making payment. This vital difference needs to be kept in mind in deciding this matter. Interest under section 28 is part of the amount of compensation whereas interest under section 34 is only for delay in making payment after the compensation amount is determined. Interest under section 28 is a part of the enhanced value of the land which is not the case in the matter of payment of interest under section 34." 14. The assessee seeks rectification on the basis of the aforesaid judgment. It is contended that interest shown by him in the return of income was received by him u/s 28 of the Land Acquisition Act and not under section 34 thereof and therefore the interest so received by him u/s 28 is part of the enhanced compensation, received in the year under appeal. It is also his case that since the enhanced compensation is exempt from tax u/s 10(37) of the Income-tax Act, the interest being part of the enhanced compensation is also exempt from tax and, therefore, not liable to tax a....
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.... Works v. CIT, 179 ITR 588 (P&H) in which it was, inter alia, held that the "contributions made to the chit fund could not be treated as revenue expenditure nor could the payment or receipt of any amount to and from the chit fund be treated as the business activity of the assessee. The transactions involved did not give rise to any income assessable to income-tax nor any revenue loss in respect of which any deduction could be claimed". After the above decision, the AO issued a notice under section 154 to the assessee. She was asked to show cause as to why the deduction on account of loss in chit fund be not disallowed. Finally, vide order dated 13th February 1992, the order of assessment was rectified. The assessee's claim for deduction of Rs. 74,205 on account of loss in chit fund by debiting the amount to her P&L a/c was, thus, disallowed. As a consequence, the amount was added to the taxable income of the assessee. Aggrieved by the order of the AO, the assessee filed appeal which was dismissed by the CIT(A). On further appeal, the Tribunal took the view that the issue regarding the admissibility of the deduction was debatable as the Delhi Bench of the Tribunal, after considering....
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....Hon'ble Supreme Court has cited, with approval, the observations made in Deva Metal Powders P. Ltd. v. Commissioner, Trade Tax, U.P., 2008 (2) SCC 439 (SC) and held that not only a mistake should exist in the order sought to be rectified but the same should also be a patent mistake which is obvious and whose discovery is not dependent on elaborate arguments. 18. In Deva Metal Powder P. Ltd. v. Commissioner, Trade Tax (supra), the facts of the case were that the assessee was dealing with aluminium powder. In the original assessment order passed, aluminium powder was treated as metal and accordingly held liable to tax at the rate of 2.2%. The Assessing Officer initiated proceedings for rectification of the said order on the ground that the Supreme Court had in Hindustan Aluminium Corporation Ltd. v. State of Uttar Pradesh and Another, 1981 (3) SCC 578 considered the entry "All kinds of minerals, ores, metals and alloys including sheets and circles" and held that under the said entry only the primary metal was covered. It was also held in that judgment that sheets and circle of aluminium would not be covered under the entry "Metal". Based on the aforesaid judgment, the Assessing Offi....
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....ing rectification u/s 154 has to necessarily establish that the mistake sought to be rectified is self-evident or apparent from the record. 20. There is no doubt that the judgments of the Supreme Court have retrospective effect except as regards matters that are res-judicata, or accounts that have been settled in the meantime. A judgment of the Supreme Court does not thus have the effect of disturbing the matters which stand concluded except in the manner provided by law. Section 154 permits rectification on the basis of a subsequent judgment of the Supreme Court provided the rectifiable mistake is apparent from the record and is self-evident. Judgments rendered by the Supreme Court and jurisdictional High Court cannot be pressed into service to disturb or reopen the concluded matters except in the manner provided by law, e.g., section 154. For similar reasons, judgments of the Supreme Court and jurisdictional High Court cannot be pressed into service to make a new claim, which was not made earlier, or to seek review of the decision in the light of the judgments of the Supreme Court. Section 154 permits rectification of mistake on the basis of the judgments of the Supreme Court pr....
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....ust be self-evident and apparent from the record. In the present case, no such mistake in any order, intimation, etc., has been brought to our notice, which can be rectified u/s 154. 22. The applicability of the judgment in Ghanshyam (supra) depends upon the existence of certain foundational facts, which must be self-evident or apparent from the record of the AO so as to bring the case within the ambit of section 154. As stated earlier, the assessee has no-where stated either in the return of income or in the computation sheet filed along with return of income that the interest shown by him was received by him u/s 28 and not u/s 34. The assessee wants this issue to be verified and investigated which is not permissible in the course of rectification proceedings u/s 154. It is not the case of the assessee that he has shown interest income as received u/s 28 of the Land Acquisition Act either in the return of income or in the computation sheet filed along with return of income. Perusal of the TDS certificate shows that the impugned interest has not been shown even by the Land Acquisition Officer as paid to the assessee u/s 28 of the Land Acquisition Act. Therefore, the foundational f....
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.... Dayal and Others, ITA No. 561/Chd/2010 relating to assessment year 2007-08 involving identical set of facts is of no help to him as that decision was rendered in matters relating to assessment u/s 143(3) and not in the matters relating to section 154. Complete facts were available in those matters. The appeals filed before us relate to matters u/s 154. Section 154 can be invoked only where the mistake sought to be rectified is self-evident or apparent from the record. Decisions rendered by this Tribunal in matters of assessment cannot form the basis for carrying out rectification u/s 154 in other cases howsoever similarly placed and circumstanced they be and that too of mistakes which are not self-evident or apparent from the record. It was also pleaded by him that relief should be allowed to the assessees on considerations of equity. In our view rectifications u/s 154 cannot be carried out on considerations of equity. 26. We have reproduced a copy of the application filed u/s 154. Its perusal shows that it has not been signed by the assessee but by his Chartered Accountant. Section 154(2)(b) provides that the authority concerned shall make such amendment for rectifying any such ....