2010 (8) TMI 633 - HC - Income Tax

Rectification of mistake - The very statutory provision prescribing a prohibition in respect of the deductions in relation to the profits and gains itself has not specifically included Section 80HHC - Apparently it therefore would only mean that there was no prohibition for claiming any deduction under Section 80HHC while applying the benefits provided under Section 10A of the Act -In any event having regard a statutory prescription available for the assessee to claim the benefit under Section 80HHC in respect of the profits earned from Section 10A of the Act there is absolutely no scope for the Assessing Authority to have invoked Section 154 of the Act - In order to state that that can be considered as an error apparent inasmuch as there was no error at all much less apparent error to be rectified by the Assessing Authority - Hence, do not find any scope to entertain this appeal inasmuch as we do not find any question of law - This appeal fails and the same is dismissed against of revenue.

Summary

Issues:
1. Challenge to Tribunal order by Revenue regarding rectification under Section 154 of the Income-tax Act.
2. Claim of double deduction under Section 80HHC of the Act by the assessee.
3. Interpretation of statutory provisions regarding deductions under Section 10A and Section 80HHC.

Analysis:
1. The appeal was filed by the Revenue against the Tribunal's order related to a rectification under Section 154 of the Income-tax Act for the assessment year 2003-04. The Assessing Authority rectified an apparent mistake in the assessee's claim under Section 80HHC for the remaining 10% of profits, which was deemed as a double deduction. The Tribunal, however, held that the Assessing Authority's view was a possible interpretation, not an error apparent on the face of the record, essentially reviewing the original assessment order.

2. The crucial point of contention was whether the assessee's claim under Section 80HHC for the remaining 10% of profits, in addition to benefits under Section 10A/10B, constituted a double deduction. The High Court analyzed Section 10A(6)(iii) of the Act, which prohibits certain deductions but does not specifically include Section 80HHC. As a result, the Court concluded that there was no prohibition for claiming a deduction under Section 80HHC while benefiting from Section 10A, making the assessment order allowing such deduction valid and not erroneous.

3. The Court emphasized that the statutory provisions did not restrict claiming benefits under Section 80HHC in relation to profits under Section 10A. Therefore, there was no basis for the Assessing Authority to invoke Section 154 of the Act to rectify an alleged error that did not exist. Additionally, the Court concurred with the Tribunal's view that the Assessing Authority's original assessment was a possible interpretation and not an error apparent on the face of the records. Consequently, the appeal was dismissed as no substantial question of law was found, and no costs were awarded.

This detailed analysis of the judgment highlights the key issues raised, the arguments presented, and the legal interpretation provided by the High Court in resolving the appeal challenging the Tribunal's order.