2018 (9) TMI 1249 - HC - Income Tax

Rectification of mistake u/s 154 - whether the issue of exclusion of export incentive from total turnover for the purpose of deduction under Section 80HHC is not a debatable issue and is rectifiable under Section 154? - Held that - In the instant case, it is only a computation error and it is not an omission to make a claim for deduction. Furthermore, the identical relief was granted in respect of the assessment year 2000-2001 at the stage, when an appeal was filed against the assessment order before the Commissioner (Appeals) and additional ground was raised by the Assessee, which was permitted by the Commissioner (Appeals) and accordingly, the original claim made under Section 80HHC of the Act was modified by the Assessee. Thus, we are of the considered view that the Commissioner (Appeals) as well as the Tribunal rightly held that the Assessee was entitled to file an application under Section 154 of the Act to amend the intimation issued under Section 143(1) of the Act. - Decided in favour of assessee

Summary

Issues:
- Maintainability of application under Section 154 of the Income Tax Act, 1961 for rectification of intimation dated 21.11.2005 regarding exclusion of export incentives from total turnover for deduction under Section 80HHC.

Analysis:
1. The appeals by the Revenue challenged the order of the Income Tax Appellate Tribunal regarding the exclusion of export incentives from total turnover for deduction under Section 80HHC for Assessment Years 2001-2002 and 2002-2003.

2. The main issue was whether the Assessee's application under Section 154 to rectify the mistake in not excluding export incentives from total turnover was maintainable. The Assessing Officer initially rejected the application, but the Commissioner (Appeals) allowed it based on a similar case from a previous assessment year.

3. The Tribunal upheld the Commissioner's decision, stating that the error was a computation error, not an omission to claim deduction. The Assessee had rectified a similar mistake in a previous assessment year, which supported their case for rectification under Section 154.

4. The High Court analyzed the provisions of Section 143(1)(a) of the Act and referred to a relevant decision to support the Assessee's case. It was concluded that the Assessee was entitled to rectify the intimation under Section 154 due to a computation error, not a failure to claim deduction.

5. Ultimately, the High Court dismissed the Revenue's appeals, affirming the decisions of the Commissioner (Appeals) and the Tribunal in favor of the Assessee. The Court held that the Assessee had the right to file an application under Section 154 to amend the intimation issued under Section 143(1) of the Act.