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2015 (10) TMI 1870 - AT - Income TaxRectification application u/s. 154 - whether subsequent amendment to the Income-tax Act, 1961 does not constitute mistake apparent from record - disallowance u/s. 40(a)(ia) on account of Contract payments - Held that - The undisputed fact is that the assessee has not deposited the tax deducted at source within the stipulated time. It is also an undisputed fact that Finance Act, 2010 has amended the provisions of Sec. 40(a)(ia) of the Act whereby making the provision that if the tax deducted at source is deposited with the Government on or before the due date of filing the return, the same will be allowed in the year of claim. This amendment was first considered by the Tribunal Special Bench in the case of Bharati Shipyard Ltd. Vs DCIT 2011 (9) TMI 258 - ITAT MUMBAI wherein held that amendment to Sec. 40(a)(ia) by the Finance Act 2010 is effective from 1.4.2010 and does not have retrospective effect. Subsequent to this the Hon ble Calcutta High Court in the case of CIT Vs Virgin Creators 2011 (11) TMI 348 - CALCUTTA HIGH COURT has held that the amendment by the Finance Act 2010 is retrospective with effect from 1.4.2005. Subsequent to this decision of the Hon ble Calcutta High Court, the Bombay Tribunal in the case of Piyush Mehta Vs ACIT 2012 (4) TMI 349 - ITAT MUMBAI has held that the judgement of Calcutta High Court being the only judgement of any High Court on this subject shall prevail. As decided in ACIT Vs Saurashtra Kutch Stock Exchange Ltd. 2008 (9) TMI 11 - SUPREME COURT an error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opinions can hardly be said to be an error apparent on the face of the record. As the above discussion of the rival contentions show the alleged error in the present case is far from self evident and if it can be established, it has to be established by lengthy and complicated arguments. We do not think such an error can be cured by a writ of certiorari according to the rule governing the powers of the superior court to issue such a writ - Decided against assessee.
Issues:
1. Rejection of rectification application under section 154 based on subsequent amendment to the Income-tax Act, 1961. 2. Applicability of the amendment to Section 40(a)(ia) retrospectively. 3. Interpretation of "mistake apparent from record" under section 154. 4. Judicial precedents regarding the retrospective effect of amendments. Analysis: Issue 1: The appeal was against the rejection of the rectification application under section 154 by the Ld. CIT(A) based on the subsequent amendment to the Income-tax Act, 1961. The assessee contended that the amendment made to Section 40(a)(ia) by the Finance Act, 2010 was retrospective in effect and should be applicable for the relevant assessment year. However, the AO rejected the rectification application citing that only a mistake apparent from the record can be rectified under section 154, which must be an obvious and patent mistake. The AO believed that the issue raised by the assessee was a debatable point of law and not a clear mistake for rectification. Issue 2: The core contention revolved around the retrospective applicability of the amendment to Section 40(a)(ia). The Tribunal noted that the Finance Act, 2010 had amended the provisions of Section 40(a)(ia), stating that if the tax deducted at source is deposited with the Government before the due date of filing the return, it would be allowed in the year of claim. The Tribunal referred to various judicial decisions, including a Special Bench ruling and a judgment by the Calcutta High Court, which held conflicting views on the retrospective effect of the amendment. The Bombay Tribunal ultimately gave precedence to the Calcutta High Court's decision, considering it as the only judgment by any High Court on the subject. Issue 3: The Tribunal analyzed the concept of "mistake apparent from record" under section 154 in light of legal principles laid down by the Hon'ble Supreme Court. Referring to the case law, the Tribunal emphasized that an error apparent on the face of the record should be self-evident and not require a lengthy process of reasoning or consideration of multiple opinions. Applying this standard to the facts of the case, the Tribunal found no merit in the rectification application, as the alleged error was not self-evident and required complex arguments to establish. Issue 4: The Tribunal extensively discussed judicial precedents, including the observations of the Hon'ble Supreme Court in ACIT Vs Saurashtra Kutch Stock Exchange Ltd., regarding the rectification of orders and the nature of errors that can be considered apparent from the record. By referencing legal principles and past judgments, the Tribunal concluded that the rectification application of the assessee was rightly rejected by the AO and upheld by the Ld. CIT(A), leading to the dismissal of the appeal. In conclusion, the Tribunal dismissed the appeal, emphasizing the legal principles governing the rectification of orders and the retrospective applicability of amendments to tax laws, based on the interpretation of "mistake apparent from record" under section 154 and relevant judicial precedents.
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