1984 (10) TMI 91 - AT - Income Tax

Assessment Order, Mistake Apparent From Record, Original Assessment, Purchase Price, Written Down Value

Summary

Issues:
Rectification of assessment order, rectification of mistakes, limitation period for rectification orders, interpretation of Section 154(1)(a), rectification of earlier rectification orders.

Analysis:
1. The appeal and cross-objection pertain to the assessment year 1967-68, involving rectification orders related to the depreciation of tractors owned by the assessee. The first rectification order added interest to the Written Down Value (WDV) of the tractors, allowing depreciation at 25%. Subsequently, a second rectification order corrected the mistake of adding interest to a tractor where no interest was paid, reducing the WDV accordingly.

2. The assessee challenged the second rectification order on grounds of limitation and debatability of the issue. The Commissioner (Appeals) rejected the limitation argument but accepted the debatability claim, canceling the second rectification order. The department contested this decision, arguing that the error corrected was apparent from the records and not debatable.

3. The department questioned the Commissioner's finding that the issue was debatable, emphasizing that the mistake in the rectification order was evident. The Tribunal agreed, stating that rectification orders have independent existence and can rectify mistakes in earlier rectification orders. The Tribunal dismissed the contention that rectifying a mistake in a rectification order equates to rectifying the original assessment order.

4. Referring to legal precedents, the Tribunal clarified that rectifying a mistake in an earlier rectification order falls within the ambit of Section 154(1)(a) and is subject to a separate limitation period. The Tribunal upheld the rectification order under appeal as being within the stipulated timeframe, allowing the appeal and dismissing the cross-objection.

In conclusion, the Tribunal's decision upheld the rectification order correcting the mistake in the earlier rectification order, emphasizing the independent existence of rectification orders and the distinct limitation period for rectifying such errors. The Tribunal's interpretation of Section 154(1)(a) allowed for rectification of mistakes in rectification orders, ensuring timely correction of errors without undue hardship to either party.