TaxTMI 
TaxTMI 
2025 (8) TMI 835
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....ection 154 of the Income Tax Act permits rectification only for mistakes that are "apparent from the record," ie, clear, undisputed errors requiring no detailed interpretation. 3. The CIT(A) has erred in failing to recognize that no prior notice was issued before disallowing the excise duty credit of Rs. 5,26,484/-. 4. That the Ld. CIT (A) has erred in law and facts and has failed to appreciate that the AO having taken a view that the subsidies amounting to Rs. 5,26,484/- are capital in nature and then erred in not giving the same treatment while working out book profit u/s 115JB. 5. The Ld. CIT(A) failed to correctly interpret that once a receipt is not classified as income under section 2(24) of the Income Tax Act, 1961, it cannot be considered as part of book profit under section 115JB. It is a settled position of law that for the purpose of computing book profit, only receipts that qualify as income can be included. As such, the subsidy, not being income, should not have been included in the book profit computation. 6. That the Appellant requests for leave to add or amend the grounds of appeal before the appeal is heard or disposed." 3. Br....
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....ven to it in the books of accounts. 6.3 Notices u/s 250 were issued and the appellant did not provide any evidence of having file a revised return before the Ministry of Corporate Affair, excluding such amount from the computation of income as per P&L Account derived as per the books of account maintained. Therefore, the corresponding GoA is dismissed. 6.4 Even otherwise, while the deduction u/s 801B under the normal provisions of the Act is Rs. 17,38,227/-, the adjusted book profit u/s 115JB stands lesser at Rs. 6,00,293/- which proves that the claim of the appellant is already accommodated. 6.5 As per the provisions of section 246A, an appeal lies only when the assessee is aggrieved by the order passed. Since, there is no grievance and there cannot be any grievance against the taxation of book profit, the order passed u/s 154 dated 30.03.2018 is sustained." 8. Now the assessee is before the tribunal on the grounds contained in the memorandum of appeal. 9. Before the Tribunal the Ld AR of the assessee has filed paper book containing copies of ITR, intimation u/s 143(1), rectification application, order u/s 154, copies of VAT - 11 and tax remission ....
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....of law and involves statutory provisions and there a reasonable scope for more than one interpretation the remedy of rectification is not available. He further referred to the Hon'ble Apex Court Judgment in the case of T.S. Balaram, ITO v. Volkart Bros. [1971] 82 ITR 50 where the Hon'ble court has held that a mistake apparent form 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 can conceivably be two opinions. A decision on a debatable point of law is not mistake apparent from the record. 15. In support of his above contention he referred to the various other judgments of various Courts as follows: "1. High Court of Delhi, Commissioner of Income Tax v. R.T.C.L. Ltd. [2021] 23 taxmann.com 434 (Delhi) 2. Assistant Commissioner of Income Tax, Central Circle-18, New Delhi v. Uflex Ltd. [2012] 24 taxamann.com 228 (Delhi). 3. Commissioner of Income Tax v. Reliance Industries Ltd. [2014] 48 taxmann.com 362 (Bombay) 4. Principal Commissioner of Income Tax v. Lanshree Products & Services Ltd. [2023] 150 taxmann.com 389 (Calcutta). 5. Gujarat H....
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....n this case since we have already held that in relevant assessment year 2010-11 the incentives 'Interest subsidy' and 'Power subsidy' is a 'capital receipt and does not fall within the definition of 'Income' u/s 2(24) and when a receipt is not on in the character of income it cannot form part of the book profit u/s 115JB." 18. Lastly before concluding, the Ld. AR submitted that in the instant case, the Act of the AO is legally flawed in absence of any notices of hearing u/s 154(3) of the Act and he submitted that as per the above provisions and also from the aspect of the natural justice, the assessee should have been provided with a notice of hearing which has not been done in this case and he relied on a number of judgments on this issue that any exercise where right or interests of the assessee are being affected, reasonable opportunity to defend should be allowed to the assessee and in the instant case since no opportunity to defend has been allowed (no notice u/s 154(3) has been served )the order is violative of the principles of natural justice and should be quashed. 19. In support of his contention he relied on the following decisions: ....
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....e without a fresh notice for that specific purpose, which has not been done in this case, rendering the proceeding legally unacceptable being violative of the principles of natural justice, because both sections operate in different perspective. 25. On this issue we rely on the decision of the Hon'ble Calcutta High court in the case of Arun Kumar Bose Vs ITO (supra) the relevant paragraph reproduced: "25. Upon a conjoint reading of subsection (1), (2), (3) and (4) of Section 154, this Court holds that the authority has the power to make an amendment under Section 154(1) of its own motion but if such amendment has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, the authority concerned is under a statutory obligation to issue a notice upon the assessee and give a reasonable opportunity of hearing before passing an order of amendment for rectification of any mistake apparent from the record. 26. In the case on hand, the assessing officer made the amendment of its own motion. It is not in dispute that notice in terms of Section 154(3) of the Income Tax Act was not served upon the petitioner. No oppor....