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TMI Blog1988 (8) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... h April, 1983, stating, inter alia, as below :— "In connection with the above case, it is submitted that the amount of Rs. 75,000 was seized on 15th Jan., 1977 from my residence. Because the above seized cash and other items had been considered in the asst. yr. 1977-78, it is requested the above amount of Rs. 75,000 should be treated as advance tax in the same asst. yr. 1977-78." 5. The ITO appears to have given effect to the order of the CIT(A). A copy of the said order has not been placed on record by the assessee, but a tax computation sheet has been placed before us at p. 24 of the assessee's paper books, wherefrom it appears that, after relief given by the CIT(A), the total income determined was Rs. 1,83,045 which, after deduction of agricultural income and relief under s. 80C, came to Rs. 1,77,420. Tax on the above income was worked out at Rs. 1,00,509. From the above figure, the ITO, according to the assessee's version, reduced Rs. 92,000 as advance tax, containing two items, one of Rs. 17,000 and another of Rs. 75,000. After reducing the above advance tax from the tax payable, the net tax payable came to Rs. 8,509. To this amount, the ITO added three more sums of inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the said amount of Rs. 75,000 which was seized from the custody of the assessee during the course of search could not have been regarded as payment of advance tax by the assessee in respect of asst. yr. 1977-78, and thereby a mistake in the computation of interest had taken place. 10. Against the aforesaid order of the ITO, the assessee went in appeal to the CIT(A) and put forward before him, the following arguments : "(1) The notice issued by the ITO under s. 154(3) mentions only s. 217 and not s. 139 and, therefore, the rectification was not valid in as much as it related to interest under s. 139(8). (2) The case of the appellant was not covered under s. 217(1A) as the appellant was covered under s. 209A(1)(a) being an old assessee. In the case of the appellant, a notice under s. 210 had been issued and actually the appellant had filed an estimate which was lower than the advance tax demanded from, the s. 217(1A), were not applicable. (3) Interest can be charged only on completion of 'regular' assessment. In this case, the assessment had been completed by issuing a notice under s. 148 and, therefore, this assessment was not a regular assessment. My attention was dra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ked after the perusal thereof, that in the original assessment order, "there was no direction from the ITO to charge any interest either under s. 139(8) or under s. 217(1A)." He, further conceded that "the learned Authorised Representative is right in principle when he says that in the absence of any directions from the ITO on interest could be charged." But he pointed out that, in the present case, interest had been charged under the aforesaid sections, vide order of the ITO dt. 29th April, 1983; and that, in this order of the ITO, a mistake had definitely crept in. He noted that the aforementioned order of the ITO dt. 29th April, 1983, taking Rs. 75,000 as "advance tax," had been passed by him on the face of the assessee's application dt. 18th April, 1983, in which the assessee had prayed that the said sum be regarded as advanced tax payment. In view of these facts, the learned CIT(A) observed that the arguments of the assessee based on the original assessment order dt. 14th July, 1982 were not valid, because rectification was not done to that order, what was being done was to rectify the order dt. 29th April, 1983, in which the alleged mistake was stated to have crept in. Accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 139, the CIT pointed out that the said allegation is not borne out from record, as "the office copy of the notice mentions both the sections". In the event, he upheld the order under s. 154 passed by the ITO. 16. It is the above order of the learned CIT(A) which is vehementally assailed as erroneous by the learned counsel for the assessee. His reasoning before us is more or less on the same lines as before the learned CIT(A). In addition, it is pointed out to us that the ITO had, vide his letter dt. 30th Aug., 1983, replied to the audit objection raised with regard to the aforesaid subject, that in his opinion, there was no mistake apparent from record as was suggested by the audit and that, therefore, the order of the ITO was against his own judgment and was, accordingly, vitiated and should be quashed Our attention was also invited to the decision of the Tribunal Delhi Bench 'D' in the case of Bharat Commercial Corpn., New Delhi vs. ITO in ITA No. 5207/Del/95 dt. 30th Oct., 1987 wherein, according to the assessee, an amount seized in a search was held by the Tribunal to be a payment towards advance tax and, therefore, according to him, the view presently taken by the CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a payment of advance tax for asst. yr. 1977-78. Inasmuch as the ITO had treated Rs. 75,000 as advance tax payment in his order dt. 29th April, 1983, it was a mistake apparent from record, according to the ITO. 18A. The effective point for determination in the present appeal, therefore, is as to whether the aforesaid mistake could be regarded as a mistake apparent from record. The mistake apparent from record should be one about which no debate is possible. It can be of fact as well as of law and merely because it is a mistake of law, it cannot be said that it would not be a mistake apparent from record. If interpretation of the statute is required to be done to find out as to whether or not the view taken by the ITO was correct, a debate may be possible, and, in such a case, it may not be correct to hold such a mistake as one apparent from record. But merely taking note of the provisions of the law, about which two opinions are not possible, would not give rise to a debate, and the mistake in question would be one apparent from record. 19. Let us, therefore, first determine as to what 'advance tax' is. This term has been defined vide s. 207 of the IT Act, 1961. The two sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch, 1977. 24. In the setting of the above facts, the question for determination is whether the appropriation of the said sum of Rs. 75,000 by the ITO towards the tax on 29th April, 1983 could be regarded as payment of advance tax by the assessee within the financial year ending on 31st March, 1977. The answer to the above question is, an our opinion, self evident. It could not have been regarded as the payment of advance tax on or before 31st March, 1977. In fact, its appropriation towards regular tax was done only on 29th April, 1983. Only on this date, the character of this sum changed and it seized to belong to the assessee from this date onwards. Prior to this date, it was the money of the assessee in the possession of the Department. It was not 'tax'-advance or otherwise. 25. The orders of the authorities below were, thus, entirely correct in holding that the seizure of Rs. 75,000 on 27th Jan., 1977 from the assessee did not amount to payment of advance tax by the assessee on or before 31st March, 1977. This was a mistake, which was apparent from record, and even if the ITO tentatively thought, to begin with, that it was not a mistake, it would not vitiate his order beca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ak, The order of the ITO, B-Ward, Rohtak also incorporated the submission made by Haryana Papers that they had no objection if the amount of Rs. 60,000 to be returned to them was remitted to the ITO Delhi, to be adjusted against a demand of tax, if any, outstanding or credited against the two firms, which were allied concerns. The ITO acted accordingly, directed that the amount of Rs. 60,000 be remitted to the ITO, Delhi to be adjusted against the demand of tax outstanding or to be credited against these two firms. Bharat Commercial Corpn., which was the other allied concern, wrote a letter to the Asstt. Director of Inspection, Income-tax, New Delhi on 14th March, 1980 that the aforesaid amount of Rs. 60,000 which was lying with the ITO, B-Ward, Rohtak, may be summoned from the said ITO and adjusted against the tax liability of Bharat Commercial Corpn., New Delhi. The said amount was received later on from the ITO, B-Ward, Rohtak and adjustment of Rs. 30,000 was made by the IT Department to the credit of the appellant on 26th March, 1980. In the setting of the aforesaid facts, it was stated by Bharta Commercial Corpn., New Delhi before the Tribunal that the aforesaid amount should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings. 28. That brings us to the question as to whether the notice under s.154 issued by the ITO was only with regard to the interest under s. 217 or whether it was with regard to the payment of interest under s. 139(8) also. The copy of the notice, which has been placed in the paper book, mentions interest under s. 217 only. But the CIT(A) has sated in his order that he called for the record and perused it himself and had found that, in the original notice there was reference both to s. 217 and s. 139(8). The original file of the ITO was not before us and, therefore, it has not been possible for us to verify as to which of the two factual situations is correct. Normally, we would have accepted the finding of fact as given by the CIT(A) in the present case, but one thing is weighing on our mind, i.e., the reply of the assessee dt. 26th Nov., 1983. In it, the assessee refers only to the charging of interest under s. 217 and not to the charging of interest under s. 139(8). The assessee's version, therefore, appears to us to be equally plausible, namely, that he was given notice under s. 154 only with regard to the charging of interest under s. 217 and that no notice was given to h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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