TaxTMI 
TaxTMI 
2012 (5) TMI 753
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....whether the ITAT has rightly affirmed the order dated 11.01.2010 whereby the Commissioner of Income Tax (Appeals), Udaipur ['the CIT(A)'] set aside the rectification order as passed by the Assessing Officer ('the AO') on 30.03.2007 under Section 154 of the Act. The relevant facts and background aspects could be noticed in brief in the following: The income tax return as filed by the assessee, engaged in hotel business, for the assessment year 2000-01 was processed by the AO and the assessment was completed while taking the income at Rs. 1,00,32,848/- which was reduced to 'Nil' after setting off the unabsorbed business losses and depreciation pertaining to the earlier assessment years 1993-94 and 1994-95. The revenue....
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....ut the assessment earlier having been completed and the opinion of the Department and then, reproduced the submissions as made by the assessee in response to the notice under Section 154 of the Act and, thereafter, without any discussion, simply stated that the contentions of the assessee were not tenable and hence were rejected. The AO, thereafter, proceeded to re- compute the income in the manner that the total income of the assessee was taken at Rs. 1,00,32,848/- where from the current year's depreciation to the extent of profit was deducted leading to the 'Nil' income; and the assessee was allowed to carry forward the unabsorbed depreciation to the extent of Rs. 1,36,71,987/- (Rs.2,37,04,835 ' Rs. 1,00,32,848). It is not....
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.... tenable, the A.O. has not given any finding as to why the submissions of the appellant were not acceptable. It is a fact admitted by the A.O. in the order that the appellant has not claimed any depreciation in the computation of total income. Since the appellant has not claimed any depreciation, it is not known how it can be said that it is a mistake apparent from the record and is rectifiable under section 154 of the Act. Further, on-going through the decision of the Hon'ble Supreme Court relied upon by the learned A/R., it is seen that the said decision is squarely applicable in the case of the appellant. Further, the amendment in section 32 of the Act to the effect that it was mandatory from the Asstt. year 2002-03 that depreciation....
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....not be rectified u/s. 154 of the Act. The Hon'ble Madras High Court in CIT vs Sree Senhavalli Textile Mills (P) Ltd., 259 ITR 77held that the interpretation of relevant provisions of the Act by the Hon'ble Supreme Court settles the law and unless the subsequent amendment is expressly given retrospective effect the law laid down by the Hon'ble Supreme Court will remain binding for the period prior to the amendment. The Hon'ble Kerala High Court in the case of CIT vs Kerala Electric Lamp Works Ltd., 261 ITR 721held that explanation 5 of Section 32 (1) is applicable only from 01.04.2002. It was observed that if the legislature actually intended to nullify the effect of the decision of the Hon'ble Apex Court rendered in the ....
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....he order of the CIT(A) setting aside the order passed by the AO in the purported exercise of powers under Section 154 of the Act. The scope and applicability of Section 154 of the Act has been delineated by the Hon'ble Supreme Court in the case of T.S Balaram, Income-Tax Officer, Company Circle IV, Bombay vs. Volkart Brothers and others: (1971) 82 ITR 50 as under: "...It was not open to the Income-tax Officer to go into the true scope of the relevant provisions of the Act in a proceeding under section 154 of the Income-tax Act, 1961. 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 on points on which there may conceivably be two opin....