1983 (6) TMI 72 - AT - Income Tax

Summary

Issues:
1. Rectification of order under section 132(5) of the Income-tax Act, 1961.
2. Competency of the Commissioner (Appeals) to dismiss the appeal.
3. Interpretation of provisions under section 154 for rectification of mistakes apparent from the record.
4. Right of the assessee to appeal against an order under section 154.

Analysis:

1. The case involved a dispute regarding the rectification of an order passed under section 132(5) of the Income-tax Act, 1961. The Income Tax Officer (ITO) had estimated incomes for various assessment years based on searches conducted at the assessee's premises. The assessee filed a petition under section 154, claiming mistakes in the order passed by the ITO. The ITO, however, rejected the request for rectification, leading to an appeal by the assessee to the Commissioner (Appeals).

2. The Commissioner (Appeals) dismissed the appeal, citing that the order under section 132(5) was not appealable before him as a different authority was designated for such appeals under section 132(11). The Commissioner (Appeals) held that the appeal for rectification under section 154 should also be addressed to the authority specified under section 132(11), making the present appeal incompetent.

3. The Tribunal analyzed the provisions of section 154, emphasizing that any mistake apparent from the record in an order passed by the ITO could be rectified under this section. The Tribunal highlighted that mistakes could include not only arithmetical errors but also obvious mistakes of law. It was noted that the assessee had the right to seek rectification under section 154, regardless of the availability of alternative remedies like an appeal under section 132(11) for orders under section 132(5).

4. The Tribunal disagreed with the Commissioner (Appeals) and held that the assessee rightly filed the application under section 154 with the ITO who passed the order under section 132(5). The Tribunal further clarified that the Commissioner (Appeals) was obligated to entertain the appeal under section 246(1)(f) against an order under section 154. Consequently, the Tribunal allowed the appeal, setting aside the Commissioner (Appeals)'s decision and directing a fresh consideration of the appeal on its merits.

5. The Tribunal also urged expeditious disposal of the matter due to the prolonged pendency and the assets being seized. Ultimately, the Tribunal allowed the appeal, emphasizing the assessee's right to seek rectification under section 154 and appeal against adverse decisions, ensuring a fair consideration of the matter on its merits.