TaxTMI 
TaxTMI 
2003 (5) TMI 41
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.... by the assessee, it was found that the assessee was a resident for the year 1989-90. Though he could be a "non-resident" for the year 1990-91, but in the assessment year 1991-92, the status of the assessee should have been "ordinarily resident". Mr. Pranab Pal, learned senior counsel for the appellant, pointed out from the order appealed against that the learned single judge had held that the absence of reason in the assessment order is a mistake apparent from the record rectifiable under section 154. He also pointed out that the learned judge had held that the Assessing Officer has not disclosed the reason for his holding the assessee "non-resident" either under section 6(1)(a) or 6(1)(c) despite the assessee's claim that his status was "resident but not ordinarily resident. Mr. Pal contended that in the order favour able to the assessee, the Assessing Officer is not supposed to give reasons. The proceeding is not an adversary proceeding, requiring giving of reasons to sup port the finding, particularly, when holding in favour of the assessee. There fore, the absence of reason cannot be held to be an error apparent from the record. He secondly contended that in the notice itse....
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....drawn argument to establish the said fact and that too without any conclusiveness. In support of his contention that it is not an adversary proceeding and, therefore, no reason is to be given in the assessment order, Mr. Pal relied on S.S. Gadgil v. Lal and Co. [1964] 53 ITR 231 (SC). In support of his contention that section 154 cannot be attracted where there is a debatable question on the merits, he relied on CIT v. South India Bank Ltd. [2001] 249 ITR 304 (SC); Bata India Ltd. v. IAC of IT [2001] 249 ITR 491 (Cal); Coates of India Ltd. v. Deputy CIT (No. 1) [1995] 214 ITR 498 (Cal) and ITO v. India Foils Ltd. [1973] 91 ITR 72 (Cal). He had relied on the last cited decision for another purpose, namely, that if the notice appears to be illegal, then the assessee cannot be made to wait till the assessment was made and that such notice can be challenged in writ courts, as well as on Harbans Lal Malhotra and Sons Private Ltd. v. ITO [1972] 83 ITR 848 (Cal); T.S. Balaram, ITO v. Volkart Brothers [1971] 82 ITR 50 (SC). He contended that since this petition is pending for a long time, it should not be dismissed on the ground of alternative remedy, relying on the decisions in Dhampur....
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....India for 150 days or more. According to him, the facts clearly disclose that the assessee would be governed by clause (b) of the Explanation to section 6(1)(c) and not by clause (a) thereof as was held by the Assessing Officer. According to him, it is not a case of leaving India in connection with employment outside India within the meaning of clause (a) of Explanation to section 6(1)(c), but a case of visiting India within the meaning of clause (b) of the Explanation thereto. He contended further that a little amount of argument would not take away the application of section 154. According to him, in order to establish all facts, some amount of argument is necessary. In this case, the second opinion can be arrived at only by straining the meaning and stretching the facts and interpreting the same in a reverse form. The assessee himself has disclosed the dates of his visit to India. He does not disclose the dates of his leaving India as is apparent from page 90 of the paper book. He also contended that the absence of reasoning given by the Assessing Officer as to whether the case falls under Explanation (b) to section 6(1)(c) itself a mistake apparent from the record, attracting t....
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....orporation [1997] Lab IC 2604 (All); Ex. No. 1535646-F Recruit Trainee Ram Niwas v. Union of India [1997] Lab IC 3409 (All) sitting singly, I had occasion to hold that existence of alternative remedy will not be a bar in entertaining a writ petition having been entertained by court and kept pending till a late stage. In Dhampur Sugar Mills Ltd. v. Union of India [2000] 122 ELT 333 (SC), it was held that in a case of pendency of the writ petition for years, relegation to alternative remedy would be a little harsh. That apart, if in this case on the face of the notice it appears to be without jurisdiction or illegal, then the assessee cannot be made to wait till a decision in the proceeding itself debarring him from challenging the notice, excluding the jurisdiction of the writ court. Therefore, it would be necessary to examine the facts of this case in a little detail as to whether the notice is without jurisdiction or ex facie bad or illegal. If it is so found, then the writ petition can be maintained despite alternative remedy. In T.S. Balaram, ITO v. Volkart Brothers [1971] 82 ITR 50, 53 (SC), the apex court had held that a debatable point of law is not a mistake apparent from....
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....mal v. CIT [1963] 48 ITR 170 (Cal), laid down that whether the assessee is a resident or non-resident is a question of fact, Relying on this decision Mr. Deb contended that such a question could be decided by the authorities under the Act. But this principle has no manner of application in the present case. In as much as here we are concerned with the question of jurisdiction to issue the notice under section 154 on the ground of an error apparent from the record. On the facts now we are to examine whether the authority could assume the jurisdiction to issue the notice in the absence of the ingredients satisfying the test of error apparent from the record. Now let us address ourselves to the question of estoppel operating against the assessee. The assessee, had submitted his reply and without waiting for a decision in the proceedings, had rushed to this court and moved the writ petition. On this principle the writ court could have refused to entertain the writ petition and exercise its discretion at the initial stage. But it had not done so and had entertained the same and kept the matter pending. Therefore, the question of estoppel would not be fatal. Even if the assessee had c....
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....oceeding undertaken by the Assessing Officer is not an adversary proceeding. It is not an adjudication of a civil dispute. It is not in the nature of a judicial proceeding between the contesting parties. It is not a matter capable of a plausible argument. The Assessing Officer is empowered to assess the tax. But he does not act as a judge deciding a litigation between the citizen and the State. He is an administrative authority. The proceeding is regulated by the statute. His function is to estimate the income of the taxpayer and to assess him to tax on the basis of such estimate. Tax legislation necessitates the setting up of machinery to ascertain taxable income and to assess tax on the income. But that does not impress the proceeding with the character of an action between the citizen and the State. It was so held in S.S. Gadgil's case [1964] 53 ITR 231 (SC). Therefore, in estimating or assessing the taxable income and tax on income, it is not necessary to give reasons therefor when the decision is in favour of the assessee. Therefore, the absence of reasons cannot be a mistake apparent from the records. From page 90 of the paper book, as pointed out by Mr. Deb, it appears th....
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....tedly, in this case, the assessee was employed outside India. This is not in dispute. This has since been affirmed in the affidavit-in-opposition on behalf of the Revenue. Mr. Deb in his usual fairness did not dispute the same. Now having been employed outside India whether the assessee comes to visit India within the meaning of clause (b) of the Explanation is a question, which cannot be conclusively decided on the basis of the facts available. Thus, having regard to the facts and circumstances of the case, the question can be decided either way, the question seems to be debatable. It is a question of drawing inference from the facts and as such is a question of law. A mistake of law can also be a ground for rectification under section 154 provided such mistake is glaring and apparent. In this case, we are unable to hold that this mistake is patent, obvious, clear and apparent from the records. Admittedly, in this case, in order to establish either way, it requires a long and elaborate reasoning and arguments on points on which conceivably there may be two opinions as was held in India Foils Ltd.'s case [1973] 91 ITR 72 (Cal). Thus, it appears that the question is a debatable p....
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....ing and Manufacturing Co. Ltd. [1958] 34 ITR 143 (SC), by Mr. Deb does not help us in the present facts. In as much as there it was held that a glaring mistake in law can be rectified under section 154. In the present case the mistake alleged, as observed earlier, does not seem to be free from doubt for being held glaring. Similarly CIT v. Malayala Manorama Co. Ltd. [2002] 253 ITR 378 (Ker), also deals with mistake apparent from the record. On the same ground as mentioned above this decision does not help Mr. Deb in this case. Applying the above test on the basis of the facts as we have found, it appears that the mistake sought to be rectified is not a mistake apparent from the records within the meaning of section 154 as is the consistent view of different courts including the apex court as discussed above and in respect whereof conceivably two opinions being possible and the question is dependent, in order to establish that there was a mistake in law or fact on long drawn process of reasoning. Section 154 empowers the income-tax authority to rectify a mistake apparent from the record. The jurisdiction can be assumed to rectify any mistake apparent from the records. Unless t....