9911796707
TMI Blog1989 (9) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs. It is necessary to detail the facts leading to the controversy. They are not in dispute. In the return of income filed on 30-6-1979 the assessee made a claim for Rs. 75,209 during the assessment year 1979-80 in question representing expenditure on scientific research allowable under sec. 35. In the draft assessment order prepared by the Income-tax Officer on 20-4-1982 the claim was proposed to be disallowed on the ground that the business of the company had not been set up and had not commenced. Along with this claim, the Income-tax Officer also proposed to disallow three other claims raised by the assessee company namely, relating to investment allowance, deduction under sec. 80J and provision for bonus in the books of Head Office (ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8-79, whether revenue or capital, were eligible for deduction in the A.Y. 1979-80 as expenses incurred within 3 years immediately preceding the commencement of business. It was also said that in the assessee's case the business of the unit commenced definitely on 3-1-1978 with the start of manufacturing operations and hence the whole of the expenditure was admissible. Lastly, it was said that the Income-tax Officer disallowed the same without assigning any reasons. In para 11 of his directions under sec. 144B the IAC (Asst.) observed that the I.T.O. was justified in holding that the business had not commenced. No specific directions were given regarding the claim under sec. 35. The I.T.O. while completing the assessment on 9-7-1982, in acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditure during the relevant previous year. It appears that against the aforesaid order of the learned CIT(A) though the assessee did not file any appeal, the department had preferred an appeal before the Appellate Tribunal, which vide its order dated 9-5-1985 confirmed the order of the learned CIT(A). Thereafter the assessee moved an application dated 7-11-1985 under sec. 154 before the IAC(Asst.). In that application it was said that the learned CIT(A) had already held in, his order dated 18-1-1984 that the manufacturing activity in the factory had already commenced but that neither the assessing I.T.O. nor the IAC (Asst.) while passing the order dated 15-3-1984 under sec. 250 giving effect to the order of the CIT (A), had allowed the expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee was entitled to the claim of deduction under sec. 35 was a debatable issue where more than one opinion was possible and therefore, the provisions of sec. 154 were not attracted in this situation. The order of the Income-tax Officer was, therefore upheld. 4. Before us on behalf of the assessee Shri S.R. Kharbanda, the learned counsel, firstly submitted that since the I.T.O. while passing the order under sec. 154 had not hold that the application did not lie under sec. 154 but had rejected it on merits after assuming jurisdiction, it was not for the learned CIT(A) to have observed that section 154 was not attracted in such a case and that the learned CIT(A) had not actually applied his mind to the merits of the assessee's claim unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f an error of judgment. This section does not confer on the assessing officer the power to review its own order. The power under sec. 154 is undoubtedly a limited power ; it is not a power of revision or review but is limited to the correction of only those mistakes which are apparent from the record. We have given the facts in detail in a chronological order only to emphasise the sequence of events in order to evaluate whether it could be said to be a case where it could be said that there was an error apparent on the face of the record. The directions contained in the order dated 23-9-1981 of the Appellate Tribunal for the A.Y. 1976-77 were, only to the effect that the allowability of the expenditure claimed under sec. 35 should be consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee could, properly speaking lie within the four corners of section 154. When it comes to the question of jurisdiction, it is by now well settled that no amount of acquiescence and consent can confer jurisdiction where none can be there. It is also true that the learned CIT(Appeals) did not discuss in his impugned order the nature of the various items of expenditure claimed by the assessee to be expenditures on Scientific Research as done by the IAC (Asst.). But he did say that the question whether the assessee was entitled to the claim of deduction under sec. 35 was a debatable issue. From the mere finding of the learned CIT(Appeals) that the business commenced during the year, the allowance of expenditure claimed under sec. 35 could not au ..... X X X X Extracts X X X X X X X X Extracts X X X X
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