1987 (12) TMI 72 - AT - Income Tax

Appellate Orders, Assessment Year, Capital Employed, Computation Of Capital, High Court, Mistake Apparent From Record

Summary

Issues:
- Rectification under section 154 for relief under section 80J for the entire year based on Karnataka and Madras High Court decisions and CBDT Circular.
- Whether the ITO's order on relief under section 80J merged with appellate orders.
- Applicability of Circular of the CBDT No. 378, dated 3-3-1984.
- Mistake apparent from the record in not following Circular and High Court decisions.
- Interpretation of relief under section 80J based on the period of working of the Unit.
- Application of section 154(1A) for rectification of mistakes in the ITO's order.

Analysis:
The appeal concerns the assessee's request for rectification under section 154 for relief under section 80J for the entire year, citing decisions of the Karnataka and Madras High Courts and a CBDT Circular. The ITO had rejected the request, stating that the matter had merged with appellate orders. The CIT (Appeals) upheld this decision, leading to the appeal before the Tribunal. The assessee argued that the relief under section 80J was not fully considered in earlier appeals, focusing only on capital employed. The Tribunal noted that the matter of relief under section 80J had various aspects, including the period of working of the Unit, and that the CIT (Appeals) could have addressed the quantum of deduction based on this period. The Tribunal held that section 154(1A) did not apply as the matter had been considered and decided by the appellate authorities, ultimately dismissing the appeal.

The Circular of the CBDT No. 378, dated 3-3-1984, was brought into question by the assessee, who claimed that the ITO had not followed it. However, the Tribunal noted that the Circular postdated the assessment order, and the High Court decisions were not raised during the assessment proceedings. The Tribunal emphasized that a mistake apparent from the record must be obvious and patent, not a debatable legal point. The issue of relief under section 80J based on the period of working of the Unit was deemed highly debatable, as evidenced by decisions of various High Courts. Therefore, the Tribunal concluded that this issue did not constitute a rectifiable mistake under section 154.

The Tribunal further highlighted the applicability of section 154(1A) in rectifying mistakes in the ITO's order. It was noted that the matter of relief under section 80J had already been considered and decided by the appellate authorities, making the ITO's rectification unnecessary. Citing the powers of the CIT (Appeals) to delve into the quantum of deduction based on the working period of the Unit, the Tribunal found no merit in the assessee's case. The decision was supported by a precedent from the Madras High Court, ultimately leading to the dismissal of the appeal.