2004 (2) TMI 727 - HC - Income Tax

Summary

Issues:
1. Additional depreciation allowed by Assistant Commissioner
2. Rectification of mistake under section 154 of the Income-tax Act
3. Appeal by the assessee before the Commissioner of Income-tax
4. Appeal by the department before the Income-tax Appellate Tribunal
5. Application filed by the department under section 256(1) of the Act
6. Rejection of the claim by the Tribunal
7. Interpretation of "mistake apparent on the face of the record"
8. Application under section 256(2) for calling a question of law
9. Rejection of the application

Analysis:
1. The judgment revolves around the additional depreciation of &8377; 33,899 allowed by the Assistant Commissioner of Income-tax to the assessee. The Assistant Commissioner rectified this allowance under section 154 of the Income-tax Act, withdrawing the investment allowance and depreciation on the computer and car. This action was challenged by the assessee before the Commissioner of Income-tax, who allowed the appeal on 17-6-1991.

2. Subsequently, the department filed an appeal before the Income-tax Appellate Tribunal, which was dismissed on 26-7-1996. Following this, the department filed an application under section 256(2) of the Act after the Tribunal dismissed the application filed under section 256(1) for calling a question of law. The Tribunal rejected the claim, stating that the question of investment allowance and depreciation was debatable and not an error apparent on the face of the record.

3. The Tribunal's decision was influenced by the interpretation of "mistake apparent on the face of the record" as discussed in the case of T.S. Balaram Income-tax Officer v. Volkart Bros. The judgment highlighted that a mistake must be obvious and patent, not a debatable point of law. Based on this precedent, the High Court concluded that the case did not warrant the calling of a question of law under section 256(2) of the Act.

4. Ultimately, the High Court rejected the application, aligning its decision with the principles outlined by the Apex Court regarding what constitutes a mistake apparent on the face of the record. The rejection was based on the understanding that the issue at hand was debatable and did not meet the criteria for invoking a question of law under the relevant provisions of the Income-tax Act.