2009 (3) TMI 373 - HC - Income Tax

Whether Tribunal was justified in law in holding that a debatable issue which cannot be a subject-matter of rectification in proceedings under section 154 of the Act, without appreciating the fact that the assessee has not deducted depreciation from the eligible profit before claiming deduction under section 80-IB? - The very fact that this court itself is divided on the issue, whatever be the merits of the matter, the Assessing Officer at least had no jurisdiction to exercise his jurisdiction under section 154. As and when there is conflict of opinion amongst the Benches the same cannot amount to an error apparent on the face of the record. - in our opinion, there was no mistake apparent on the face of the record In the light of that the exercise of jurisdiction by the Assessing Officer was without jurisdiction. Consequently, we find no merits in this appeal, which is accordingly dismissed.

Summary

Issues involved:
Appeal on the question of jurisdiction under section 154 of the Income-tax Act, 1961 regarding the claim of depreciation by an assessee.

Analysis:
For the assessment year 2000-01, the Assessing Officer invoked jurisdiction under section 154 of the Income-tax Act, 1961 concerning the claim of depreciation by the assessee. The Commissioner of Income-tax (Appeals) ruled that section 154 applied only in cases of apparent errors on the record, which was not the situation here. The matter was then taken to the income-tax Appellate Tribunal, which also found the rectification application to be not maintainable.

During the appeal hearing, the counsel referred to a previous court order highlighting a conflict between Division Benches, leading to a referral to a larger Bench. The High Court noted that when there is a division of opinion among Benches, it does not constitute an error apparent on the face of the record. Citing a Supreme Court judgment, the High Court emphasized that an error apparent should be so clear that no court would allow it to remain on record without correction.

Based on the above discussion, the High Court concluded that there was no apparent mistake on the record. Therefore, the Assessing Officer's exercise of jurisdiction under section 154 was deemed invalid. Consequently, the appeal was dismissed for lack of merit.