TaxTMI 
TaxTMI 
2015 (1) TMI 1265
X X X X Extracts X X X X
X X X X Extracts X X X X
....n of income has been processed at an income declared by the assessee firm itself and SLP has also been filed before the Hon'ble Supreme Court of India against the order passed by the Hon'ble High Court of Jammu and Kashmir in the case of Shree Balaji Alloys. 1.(c) That the Ld. CIT(A) has erred in law and on facts by not appreciating the facts that the excise duty refund of Rs. 6,82,37,951/- and interest subsidy of Rs. 13,86,605/- was shown as revenue receipt by the assessee itself. 2. The appellant craves leave to add or amend the grounds of appeal on or before the appeal is heard and disposed off. 3. It is prayed that the order of the Commissioner of Income Tax (Appeals), be set aside and that of the AO be restored." 2. The brief facts of the case are that while filing the return of income the assessee claimed excise duty refund of Rs. 6,82,37,951/- and interest subsidy of Rs. 13,86,605/- as revenue receipt and the assessment order was passed on 17.12.2009. In the meantime, the Hon'ble High Court of Jammu and Kashmir in the case of M/s. Shree Balaji Alloys reported in (2011) 333 ITR 335 (J&K) held that the excise duty refund and interest subsidy as capital receipts. Th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... account of excise duty refund and interest refund subsidy were held to be in the nature of capital receipts and not taxable at all. I have perused the judgment of Hon'ble jurisdictional High Court of Jammu & Kashmir relied upon by the AR and it is seen that the facts of the case are on the same footings as in the case of the assessee and that is why the Assessing Officer has not been able to distinguish the two. However, it is incorrect in law on the part of the Assessing Officer not to give effect to the order of the Hon'ble Jurisdictional High Court on the ground that SLP in the Hon'ble Supreme Court against the said decision has been filed. I am in agreement with the claim of the appellant on the issue as, as far as the assessee is concerned the impugned receipts are clearly in the nature of capital receipts in view of the categorical decision of Hon'ble Court of Jammu & Kashmir. As such, the Assessing Officer is directed to carry out the rectification as requested by the appellant." 4. The Ld. DR argued that the assessee himself had declared in the return of income, the excise duty refund and interest subsidy as revenue receipt and the said return of income has been process....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1, is very wide. It can correct "any mistake" provided it is "apparent from the record". Section 154 does not provide that the error has to be seen in the order with reference to the date which it was passed. The mistake has to be on the record of the case. The record would include everything on the case file. The return, the evidence and the order are a part of the record. Thus, even in he case of an assessment u/s 143(1), it cannot be assumed that there can be no error apparent from the record. Section 154 has been enacted to enable the authority to rectify the mistake. The legislative intent is not to allow it to continue. This purpose has to be promoted. The legislature's will has to be carried out. By placing a narrow construction, the object of the legislation would be defeated. Parliament has prescribed a period of four years for correction of mistake. While an assessment u/s 143 or 144 has to be normally made within a period of one or two years, the mistake can be rectified at any time during the period of four years. The obvious intentions within the prescribed time, it should not be allowed to continue. Section 154 clearly provides for the intervention of the authority wi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... based on that decision. A binding decision rendered by a court is always retrospective and the decision which is overruled was never the law. The overruling decision should be deemed to have been in force even on the day when the order sought to be rectified was passed. A subsequent binding decision of the Supreme Court or of the High Court has retrospective operation as in the case of subsequent legislation and overruling is always retrospective. Section 254(2) and section 154 of the Income-tax Act enable the concerned authorities to rectify any mistake apparent from the record The said expression has a wider content than the expression error apparent on the face of the record" occurring in Order 47, rule 1 of the Civil Procedure Code The restrictions on the power of review under Order 47, rule 1, Civil Procedure Code, 1908. The restrictions on the power of review u/s 47, rule 1, I do not hold good in the case of section 254(2) and section 154 of the Income-tax Act. Even for the purpose of order 47, rule 1 of the Civil Procedure Code, 1908, which is more restrictive, a subsequent binding authority taking a different view of law is a good ground for review, on the ground that t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he High Court overruled the decision of the single judge in Sethumadhavan's case (1980) 122 ITR 587 (Ker.), the earlier decision was never the law. The law on the point at all times was as stated by the Bench in the decision reported in Santha S. Shenoy's case (1982) 135 ITR 39 (Ker.) The application for rectification, dated June 17, 1982 was within four years from the date of the order of the Tribunal, and was one filed within the time allowed by law. The order passed by the Appellate Tribunal in the appeal disclosed a mistake apparent from the record, as it held that the assessee was not entitled to interest on the advance-tax paid beyond the due date, which had to be rectified. This should have been done by the Appellate Tribunal in exercise of the powers vested in it u/s 254(2) read with section 154 of the Income-tax Act. {The Appellate Tribunal was directed to dispose of the application for rectification in the light of section 254(2) read with section 154 of the Income tax Act and in accordance with the law." 7. Further, lately, vide order dated 24.11.14, passed in CWP Nos. 2548, 2722 and 2152 of 2014, in the case of 'Supreme Industries Ltd. vs. The Additional Commissio....