2012 (9) TMI 806

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....return of income on 29.11.1996 at NIL, which return was processed under Section 143(1) of the Income Tax Act, 1961 (for short 'the Act'). The case was selected for scrutiny under Section 143(2) and the AO vide order dated 29.1.1999 passed under Section 143(3) computed the income of the assessee at Rs. 5,49,45,200/- allowing deduction under Section 80HHC at Rs. 1,14,45,297/-. Subsequent to the said order dated 29.1.1999, assessee became entitled to carry forward and set off of losses/unabsorbed depreciation for the earlier assessment years 1990-91, 1991-92 and assessment year 1995-96. Consequently, there was no taxable income during those earlier assessment years. However, in assessment year in question (1996-97) there was taxable income of ....

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....d set off of brought forward business losses/unabsorbed depreciation should be taken into account while calculating deduction under Section 80HHC(3). The Tribunal, however, took the view, that, since on July 28, 2002 the above issue of set off was debatable, the subsequent pronouncement by the Apex Court could not have validated action under Section 154 of the Act. The Revenue preferred appeal before the High Court which held that the Tribunal erred in cancelling the rectification order dated 28.7.2002 passed by the Dy. C.I.T. under Section 154 of the Act, hence this civil appeal has been filed by the assessee. 3. Shri Ajay Vohra, learned counsel for the assessee vehemently urged that even if the assessee had not filed its application un....

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....ssessee who has moved its application for rectification under Section 154. The application is not moved by the department. In the present case, the Dy. C.I.T. entertains the application of the assessee under Section 154. He gives to the assessee the benefit of carry forward and set off of unabsorbed depreciation and brought forward losses of the earlier years while computing the gross total income. Section 154 finds place in Chapter XIV which deals with PROCEDURE FOR ASSESSMENT. Section 154 deals with rectification of mistake apparent from the record. If one examines the scheme of Chapter XIV, it becomes clear that the said Chapter not only deals with assessment and re-assessment, it also deals with re- computation. The object of re-computa....