9911796707
TMI Blog1987 (1) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... inment expenditure, whereas by a retrospective amendment made to section 37(2A) of the Income-tax Act, 1961 ('the Act') with effect from 1-4-1976 by introduction of Explanation 2, the 'entertainment expenditure' would include expenditure on provision of hospitality of every kind by the assessee to any person, whether by way of provision of food or beverages or in any other manner whatsoever and whether or not such provision is made by reason of any express or implied contract or custom or usage of trade, but does not include expenditure on food or beverages provided by the assessee to its employees in office, factory or other place of their work. In view of the above retrospective amendment, it is claimed that the deduction allowed is a mis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Tribunal holding that the assessee is entitled to deduction of Rs. 1,30,682 suffers from a mistake apparent from record as it is directly opposed to the express provisions of law. As such, this mistake, which is apparent from record, requires to be rectified. The assessee's objection is that the Tribunal has followed the decision of the Bombay High Court in CIT v. Shah Nanji Nagsi [1979] 116 ITR 292, while allowing the relief to the assessee and his judgment of the High Court has not been overruled and as such, the proposed rectification is not correct. We do not agree. When the law is expressly amended with retrospective effect, the law on the date when the Tribunal's order is passed would have to be taken as it stood amended. Examin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act to make the rectification and when he had failed to do so, the High Court had power to issue a writ directing the ITO to make a rectification even though the period of four years fixed in section 35 had expired. In that case the assessee applied for rectification of the assessment within the period of four years, but due to the delay on the part of the ITO, such a rectification order had not been passed. While disposing the above matter, Allahabad High Court has noticed several authorities where it was held that it was an elementary principle of law that no reason can put forward his own default in defence to a right asserted by the other party--All India Groundnut Syndicate Ltd. v. CIT [1954] 25 ITR 90 (Bom.) A mandamus will lie to com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the same time would not promote the main object of the Legislature, such provisions should be construed as being directory only and not imperative." 5. In view of the above position of law explained by the Calcutta and Allahabad High Courts, we have to hold that the stipulation in section 254(2) that rectification of the order has to be made within a period of four years from the date of the order under section 254(1) is only directory and not mandatory. This will be specially so where the party concerned has filed an application for rectification within the period of limitation and for some reason or other no party to a suit should be allowed to suffer on account of the mistakes committed by the Court. If such mistakes are brought to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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