TaxTMI 
TaxTMI 
2009 (11) TMI 24
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....s of the judgement of this Court [later judgement] in the case of Sahney Steel and Press Works Limited & Ors. vs. Commissioner of Income Tax, reported in [1997] 228 I.T.R.253? In short, in these appeals, we are concerned with the scope of Section 154 of the Act. The appellant is engaged in the business of manufacture of Potassium Chlorates. Its factory is located in the Union Territory of Pondicherry. The appellant received power subsidy for two years, which it initially offered as revenue receipt in its Return of Income. In the petitions filed under Section 264 of the Income Tax Act, 1961 [for short, "the Act"], the assessee pleaded that the subsidy amount was a capital receipt, hence not liable to be taxed, and, accordingly, ....
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....ly or indirectly for setting up the industries. Following the judgement of this Court in the case of Sahney Steel and Press Works Limited (supra), delivered on 19th September, 1997, the Commissioner of Income Tax passed an order of rectification dated 30th March, 1998. The only ground on which rectification was sought to be made by the Commissioner of Income Tax was that Power Tariff Subsidy given to the appellant herein was admissible only after commencement of production. Consequently, according to the Commissioner of Income Tax, Power Tariff Subsidy constituted operational subsidies, they were not capital subsidies and, in the circumstances, applying the ratio of the judgement of this Court in the case of Sahney ....
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....sessing Officer has reason to believe that any income charged to tax has escaped assessment for any assessment year, he may, subject to the provisions of Sections 148 to 153, assess or re-assess such income which has escaped assessment and which comes to the notice of the Assessing Officer subsequently in the course of proceedings under the said Section. In the present case, the Department did not invoke Section 147 of the Act even when the matter was within the time limit prescribed. Be that as it may, in these appeals, we are concerned with the meaning of the words 'rectifiable mistake'. On the facts of the present case, we are of the view that the present case involves change of opinion. In this connection, it must be noted ....
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....Steel and Press Works Limited (supra), the Commissioner of Income Tax has taken the view that the subsidy in question was a revenue receipt. Therefore, in our view, the present case is a classic illustration of change of opinion. We may now deal with the judgement of the Calcutta High Court in the case of Jiyajeerao Cotton Mills Limited vs. Income Tax Officer, Calcutta & Ors., reported in [1981] 130 I.T.R. 710. In that case, the appellant-assessee derived profits from three industries, one of which qualified for special rebate under Part-I of Schedule-I to the Finance Act, 1965, for the Assessment Year 1966-1967. In granting this special rebate, the Income Tax Officer computed the profits att....
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....nterest was not admissible for such belated payments. However, subsequently, a Division Bench of the same High Court in Santha S. Shenoy vs. Union of India [1982] 135 I.T.R.39, reversed the decision of the learned Single Judge in A. Sethumadhavan (supra) and held that payment of tax made within the financial year, though not within specified dates, should be treated as advance tax and, consequently, the assessee was entitled to interest on excess tax paid. The assessee filed an application under Section 154 of the Act for rectification of the order of the Tribunal in view of the later decision in Santha S. Shenoy (supra). On the facts of that case, the Kerala High Court came to the conclusion that the rectification contemplated under&....
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....capital receipt from a revenue receipt. It depends upon the circumstances of each case. As stated above, in Sahney Steel and Press Works Limited & Ors. (supra), this Court has observed that the production incentive scheme is different from the Scheme giving subsidy for setting up industries in backward areas. In the circumstances, the present case is an example of change of opinion. Therefore, the Department has erred in invoking Section 154 of the Act. Before concluding, we may state that in Deva Metal Powders (P) Limited vs. Commissioner, Trade Tax, Uttar Pradesh, reported in 2008 (2) S.C.C.439, a Division Bench of this Court held that a 'rectifiable mistake' must exist and the same must be apparent from the....