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2021 (10) TMI 171 - HC - Income TaxRectification of mistake u/s 154 - Disallowance of set off of unabsorbed depreciation - notice u/s 154 of the Act was served on the assessee by which it was proposed to disallow the unabsorbed depreciation - HELD THAT - Section 154 of the Act, twin conditions are required to be satisfied namely that there has to be a mistake and such a mistake has to be apparent on record. It is settled in law that the detection of such a mistake does not require a search or thorough application of mind and there cannot be a mistake in respect of an issue which admits of two plausible opinion. In the instant case, the Tribunal has dealt with the contention of the revenue in paragraph 6 and has held that for the reasons assigned therein, in the case of 'PEERLESS GENERAL FINANCE INVESTMENT CO. LTD. Vs. CIT' 2016 (5) TMI 109 - SC ORDER does not apply to the case of the assessee and has recorded a finding that the miscellaneous petition filed by the revenue is liable to be dismissed as the revenue has failed to show any error apparent on the face of the record in the order dated 06.07.2017 passed by the Tribunal. The order dated 06.07.2017 is based on the decision of the High Court of Gujarat in M/s. GENERAL MOTORS INDIA 2012 (8) TMI 714 - GUJARAT HIGH COURT . The aforesaid order does not suffer from any mistake apparent on the face of the record warranting invocation of power under Section 144.
Issues:
1. Disallowance of set off of unabsorbed depreciation. 2. Validity of invoking Section 154 of the Income Tax Act. 3. Applicability of the amendment to Section 32(2) of the Act. 4. Mistake apparent on the face of the record. 5. Adjudication by the Income Tax Appellate Tribunal. Analysis: 1. The appeal involved the disallowance of set off of unabsorbed depreciation by the Income Tax Appellate Tribunal for the Assessment Year 2008-09. The Tribunal dismissed the appeal by relying on the decision of the Gujarat High Court in a specific case. The revenue contended that the amendment to Section 32(2) of the Act, removing the cap of 8 years for set off of unabsorbed depreciation, is prospective from 01.04.2002. However, the Tribunal upheld the order of the Commissioner of Income Tax (Appeals) allowing the unabsorbed depreciation, which was not challenged by the revenue. 2. The validity of invoking Section 154 of the Income Tax Act was questioned by the assessee. It was argued that for invoking Section 154, there must be a mistake apparent on the record. The Tribunal found that the revenue failed to demonstrate any error apparent on the face of the record in the order dated 06.07.2017, and therefore dismissed the application filed by the revenue under Section 154. 3. The applicability of the amendment to Section 32(2) of the Act was a crucial point of contention. The revenue argued that the amendment, removing the 8-year cap for set off of unabsorbed depreciation, is prospective from 01.04.2002. However, the Tribunal, based on the decision of the Gujarat High Court, upheld the allowance of unabsorbed depreciation for the assessee. 4. The concept of a mistake apparent on the face of the record was analyzed. It was emphasized that the detection of such a mistake does not require an extensive search or application of mind. The Tribunal found that the revenue failed to establish any error apparent on the face of the record in the order dated 06.07.2017, and therefore, the application under Section 154 was rightfully dismissed. 5. The Income Tax Appellate Tribunal's adjudication was crucial in this case. The Tribunal had dismissed the appeal preferred by the revenue and upheld the order of the Commissioner of Income Tax (Appeals) allowing the unabsorbed depreciation for the assessee. The Tribunal's decision was based on legal precedents and the absence of any demonstrated error apparent on the record. As a result, the appeal was dismissed by the High Court.
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