2005 (11) TMI 168 - AT - Income Tax

Summary

Issues Involved:
1. Mistake apparent from records regarding the Written Down Value (WDV) of the asset.
2. Rejection of the assessee's application under section 154 for higher depreciation.
3. Whether the total income can be reduced below the returned income without filing a revised return.

Detailed Analysis:

1. Mistake Apparent from Records Regarding the WDV of the Asset:
The appellant contended that the CIT(A) erred in holding that there was no mistake apparent from the records regarding the adoption of WDV of the asset. The appellant argued that the WDV should have been recalculated based on the revised computation of earlier years, citing decisions in Maharana Mills and Mahendra Mills. However, the CIT(A) upheld the Assessing Officer's rejection of the appellant's claim for higher depreciation, stating that any modification of income under section 154 is not permissible since the original order was passed under section 143(1).

2. Rejection of the Assessee's Application Under Section 154 for Higher Depreciation:
The appellant filed an application under section 154 to claim higher depreciation, which was rejected by the Assessing Officer. The original depreciation claimed was Rs. 6,45,841, and the revised claim was Rs. 7,20,154. The Assessing Officer rejected the application, reasoning that no further modification of income is allowable under section 154 since the original order was passed under section 143(1). Additionally, allowing the claim would reduce the revised income below the returned income, which is not permitted under section 154. The CIT(A) upheld this rejection, agreeing that the appellant's claim was not tenable in law.

3. Whether the Total Income Can Be Reduced Below the Returned Income Without Filing a Revised Return:
The appellant argued that the WDV should be recalculated for the year under consideration based on changes made in the depreciation claim for the assessment year 2001-02. However, the Assessing Officer and CIT(A) both held that the income could not be revised under section 154 to bring down the assessed income below the returned income. The Tribunal noted that under section 143(1), the Assessing Officer's powers are limited to processing the return as filed and cannot recompute the income or make adjustments beyond what is declared in the return. The Tribunal further observed that what cannot be done directly under section 143(1) cannot be done indirectly under section 154, citing the principle that what is prohibited by law cannot be achieved by indirect means.

Conclusion:
The Tribunal upheld the CIT(A)'s order, agreeing that the appellant's claim was not tenable in law. The Tribunal dismissed the appeal, stating that the Assessing Officer rightly declined to rectify the order under section 143(1) and that the appellant could not seek relief under section 154 or section 143(1) without filing a revised return. The Tribunal also noted that the case laws cited by the appellant were not applicable to the facts of the present case, as the powers of the Assessing Officer under section 143(1) are limited and do not allow for adjustments to the returned income.