TaxTMI 
TaxTMI 
2011 (12) TMI 606
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....TA No. 913/Chd/2011. 2. In ITA No. 913/Chd/2011, the assessee has taken the following grounds of appeal:- 1. That order passed u/s 250(6) of the Income-tax Act, 1961 by the ld. CIT(A), Panchkula is against law and facts on the file in as much she was not justified to arbitrarily hold that action of the AO in holding 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 up to Hon'ble Supreme Court, the issue is debatable and thus, does not fall within the ambit of rectification u/s 154. 3. At the time of hearing of appeal bearing ITA No. 913/chd/2011, 914/Chd/2011 and 915/Chd/2011, it was submitted by the ld. authorized representative for the assessee that the ld. CIT(A) has passed a common order on 1.7.2011 disposing of 63 appeals filed by the assessee. It was further submitted by him that all the relevant details including copy of application filed u/s 154 on behalf of the assessee, sheet of computation of assessable income and TDS certificates dated 5.2.2007 issued by the Land Acquisition Officer have been filed in the case of Shri Balvinder S....
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....ent Account number BTKPS 8321 J for the assessment year 2007-08. Respected Sir, The Assessee is agriculturist and was having agriculture land in village Saunda, District Ambala. The Land was acquired by Land Acquisition Officer. Assessee has received enhanced compensation of Rs. 6,70,583.00 and interest of Rs. 14,67,470.00 during the FY 2006-07 as per detail given as under: Cert No. Additional Compensation Interest Total l TDS 74 6,70,583 14,67,470 21,38,043 2,41,424 Assessee had filed his income tax return in your office vide return receipt number 6331014296 dated 13.3.2008 declaring his gross total income Rs. 7,29,558.00 in which assessee has claimed exemption u/s 10(37) to the tune of Rs. 6,70,583.00 being enhanced compensation and balance Rs. 58,975.00 as interest income received on enhanced compensation relevant for assessment year 2007-08. Assessee has bifurcated the interest on yearly basis as per the case decided in Punjab and Haryana High Court in case of CIT v Hardwari Lal (HUF) and others as recorded in (2008) 219 CTR (P&H) 583. In view of the judgment of Hon'ble Supreme Court in case of CIT v Ghanshyan ....
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....clusion in the enhanced compensation on the basis of judgment of the Hon'ble Supreme Court in CIT v Ghansham(HUF) 315 ITR 1 (SC) but also exemption of the whole amount of enhanced compensation including interest u/s 10(37). 8. The Assessing Officer considered the rectification application. He however, rejected the same with the following observations:- 3. Brief background of the case is that the assessee filed his return on 27.3.2008 declaring total income at Rs. 59,100/- after claiming exemption of Rs. 6,75,466/- u/s 10(37) of the Act in respect of the enhanced land compensation. The assessee also claimed credit for TDS amounting to Rs. 82,418/- corresponding to the interest income declared in the return and the enhanced compensation. The case was processed u/s 143(1) as such and refund was also issued accordingly. 4. Thus, as on date, the returned income stands to be the assessed income and there is no mistake apparent from the record warranting rectification thereof. In fact, it appears that the assessee intends its case to be decided as per the particulars which were not shown in the return of income. However, there lies no rectification for the said pu....
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....t and the Supreme Court rendered subsequently so as to rectify a mistake apparent from the record and therefore the Assessing Officer ought to have accepted the application filed on behalf of the assessee u/s 154. He submitted that this Tribunal has also held in a bunch of appeals, i.e., ITO, Ambala v. Devi Dayal and Others, ITA No. 561/Chd/2010 relating to assessment year 2007-08 involving identical set of facts, that the entire interest received u/s 28 of the Land Acquisition Act in a particular year was liable to the included in the enhanced compensation received in that year. According to him, the Tribunal has also held that since the enhanced compensation was exempt u/s 10(37), the entire interest received u/s 28 of the Land Acquisition Act, being part of the enhanced compensation would also be exempt from tax. He submitted that the aforesaid order of this Tribunal squarely covers the case of the assessee in his favour. He further submitted that the principle of equity requires that similar treatment should be given to the assessee as has been given to other assessees similarly placed and circumstanced. 12. In reply, the ld. DR supported the order passed by the Assessing Of....
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....oard and rectification can be done on that basis. It is thus no longer res integra that subsequent judgments of the Supreme Court laying down a principle of law are applicable across the board and the rectification can be carried out on the basis of a subsequent judgment of the Supreme Court provided the mistake sought to be rectified is apparent from the record. However, the relevant questions in this behalf are two-fold: one, whether the existence of a rectifiable mistake in the order, which is sought to be rectified, is a condition precedent for exercising rectificatory jurisdiction u/s 154, and two, whether the foundational facts necessary for applying the principle of law laid down by the Supreme Court, which are not self-evident or apparent from the record, can be collected and investigated afresh in the course of proceedings u/s 154 so as to give effect to the judgment of the Supreme Court. 16. In CIT v. Aruna Luthra, 252 ITR 76 (P&H), the facts of the case were that the assessee had filed her return of income for the assessment year 1987-88 in which she had declared her income at Rs. 44,380. While computing the profit from business, the assessee had claimed deduction of ....
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....er s. 143(1), it has not to be assumed that there can be no error apparent from the record. As for the decision in the case of Hero Cycles (supra), the rule laid down by their Lordships is that the mistake can be of fact and law. However, the rectification can be made only when "a glaring mistake of fact or law committed by the officer passing the order becomes apparent from the record. Rectification is not possible if the question is debatable". We cannot read this decision to mean that only the order has to be seen and not the record. Thus, the contention raised by the counsel cannot be accepted. It was also contended that the decision of an authority decides the rights of the parties. It vests a right in them. The vested right can't be taken away except when specifically permitted by a retrospective law. There is no quarrel with the proposition. However, what deserves, notice is that the right, if any, is subject to the provisions of law. Sec. 154 clearly provides for the intervention of the authority within the specified time subject to the condition that the mistake is apparent and The issue is not debatable. Thus, any right under an order is subject to the provision of the....
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....endent or at argument or elaboration. Though a mistake capable of being rectified is not confined to clerical or arithmetical mistake, it does not however, cover any mistake which may be discovered by a complicated process of investigation, argument or proof. The decision on a debatable point of law or fact or failure to apply the law to a set of facts which remains to be investigated cannot be corrected by way of rectification. (iv) Rectification of an order does not mean obliteration of the order originally passed and its substitution by a new order. (v) Where an error is far from self evident, it ceases to be an apparent error and, therefore, not capable of being rectified. 19. It is thus clear from the aforesaid authoritative pronouncements of the Hon'ble Supreme Court as also of the Hon'ble jurisdictional High Court that a rectifiable mistake must exist and that such a mistake should be self-evident and apparent from the record. No judgment has been brought to our notice to the effect that a mistake, which is not self-evident or apparent from the record, is also amenable to rectification u/s 154. All the authorities are consistent in the view that the ....
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....ct. The AO simply acknowledged the return and granted refund to the assessee without carrying out any adjustment so much so that he did not even touch upon the issue of exemption u/s 10(37) as claimed by the assessee in his return of income. These facts clearly establish that no mistake exists in any order, intimation, etc., which can be rectified u/s 154. Rectification u/s 154 pre-supposes the existence of a mistake in an order, intimation, etc., which is sought to be rectified. None of the papers filed by the assessee shows any mistake which can be termed as self-evident or apparent from the record. It is quite possible that the assessee may be able to establish the mistake in the return of income or in the chart showing computation of income or in the TDS certificate issued by the Land Acquisition Officer if it is given opportunity to do so or some material is allowed to be collected. However such a course of action is not permissible u/s 154 for the reason that section 154 can be invoked to rectify only those mistakes which are self-evident or apparent from the record. Thus mere allegation of the assessee that a mistake exists is not sufficient. What is contemplated for rectifi....
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....anced compensation in his return of income but no material has been placed before us to establish that the conditions laid down in section 10(37) have been fulfilled. The claim of the assessee that the interest received by him is exempt u/s 10(37) would therefore require examination of the claim of the assessee in the light of the provisions of section 10(37), which cannot be undertaken in proceedings u/s 154. The judgment in Ghanshyam (supra) does not lay down any such proposition that the interest received under the Land Acquisition Act would always be exempt u/s 10(37). Besides, it is a matter of debate as to whether the impugned interest is at all eligible for exemption u/s 10(37) of the Income-tax Act. Therefore the claim of the assessee regarding exemption of interest u/s 10(37) cannot be considered u/s 154. 24. On careful perusal of the materials available on record, we are convinced that what the assessee is now trying in the garb of seeking rectification is to have its case reopened or reviewed in the light of the judgment of the Hon'ble Supreme court in CIT v Ghansham (HUF) (supra). Section 154 of the Income-tax Act does not contemplate review of an order already p....