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TMI Blog2010 (4) TMI 682X X X X Extracts X X X X X X X X Extracts X X X X ..... tain additional claims and denying the liability under section 115JB of the Income-tax Act. However, it is to be noted that the revised plea was categorically rejected by the Assessing Officer in his assessment completed on 30-3-2004. - Though the assessee had filed grounds before the CIT(A) with regard to rejection of recast profit and loss account and revised Form 29B, the CIT(A) had not decided the issue as regards to MAT liability in favour of assessee. Therefore, we are of the view that the finding of the CIT(A) in his order dated 12-5-2009 that “I am of the opinion that the issue relating to tax payable under section 115JB at Rs. 38,26,607 in the original return has been decided in favour of the appellant by the CIT(A)” is erroneous. In case the action of the Assessing Officer is not sustained, the assessed income would fall below the returned income under section 115JB of the Act, which is not permissible as per the dictum laid down by the Hon’ble Supreme Court in the case of CIT v. Shelly Products (2003 -TMI - 6120 - SUPREME Court) – Appeal is allowed - ITA No. 724(Bang.) of 2009 & C.O. No. 44 of 2009 - - - Dated:- 12-4-2010 - George George K., Judicial Member J, A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said point did not affect the computation of liability to tax under section 115JB. 3. Facts in brief are as follows : The assessee has filed return of income on31-10-2001showing total loss of Rs. 3,68,30,330. In addition, calculation under section 115JB has been made in the return of income filed and tax payable has been worked out at Rs. 38,26,607, which has been paid by the assessee himself as self-assessment tax. This has been recorded by Assessing Officer at para 1 page 1 of his assessment order. During the course of assessment (on18-3-2004), after expiry of time allowed under section 139(5), the assessee has filed a revised claim making certain additional claims and denying liability under section 115JB. Assessment under section 143(3) has been completed on30-3-2004without accepting the claim of the assessee made in the revised statement. Computation of income under the normal provisions of the income-tax has been made after making some additions at Rs. 19,14,87,470. The Assessing Officer at para 9.1 on page 21 of his assessment order has mentioned that revised estimate filed by assessee reducing the taxable income under section 115JB is rejected. The relevant finding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 115JB is Rs. NIL . ( ii ) There is no reference to MAT, either in the order passed under section 143(3) nor in the orders dated13-1-2005,15-4-2005 and13-9-2006 rejecting the above which clearly prove that our stand has been accepted by the officer. ( iii ) The officer had not agreed with our submission an order under section 115JB would have been passed quantifying the MAT. 5. The contentions raised by the assessee were rejected and order under section 154 was passed on25-6-2007 wherein, the tax payable under section 115JB was determined at Rs. 38,26,607 (as disclosed by the assessee in the original return dated31-10-2001). The relevant finding of the Assessing Officer reads as follows : The above contention of the assessee is not correct, as a detailed finding has been given in the order under section 143(3) at para No. 9.1 rejecting the submission made by the assessee with regard to section 115JB. As regards to point three of assessee s submissions above, the Assessing Officer in the order under section 143(3) dated30-3-2004has not computed the income under section 115JB as the income computed under normal provisions was more than the book profit under section 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly reason for rectifying the order under section 154 is that the assessee has a book profit of Rs. 4,93,42,945 which was omitted under section 115JB of the Act. Notice under section 154 was issued but the appellant objected the proposed rectification on the ground that recast profit and loss account for the year ended on31-3-2001and revised report in Form No. 29B filed during the assessment proceedings under section 143(3) has shown no tax payable under section 115JB. There was no MAT computation in order under section 143(3) nor in orders dated13-1-2005,15-4-2005and13-9-2006, which means the Assessing Officer accepted the stand of the appellant. It is seen that the Assessing Officer noted the filing of recasted statement of income. No income was offered under section 115JB whereas in the original return, the assessee declared income under MAT at Rs. 38,26,607. Since the assessee is not complying to the statutory provisions under section 139(5), revised statement filed by the assessee reducing the taxable income under section 115JB is rejected. The assessee in a letter dated19-3-2004stated that the letter filed on15-3-2004is not a revised return but a revised statement. This lette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tified under section 154. Hence, order under section 154 is bad in law. It is a well known principle that an issue which is debatable question cannot be subject-matter of rectification as held in Balaram, ITO v. Volkart Brothers [1971] 82 ITR 50 (SC). Even if the Assessing Officer is of the view that the Assessing Officer has not computed MAT as payable under section 143(3), he can initiate proceedings under section 147 and not to restrict himself from rectification under section 154. In view of the above, I am of the opinion that the issue relating to tax payable under section 115JB at Rs. 38,26,607 in the original return has been decided in favour of the appellant by the CIT(A). The question of levying tax under MAT under section 154 does not arise. It is not out of place to mention that the CIT(A) s order has been accepted by the Assessing Officer and rectification under section 154 is bad in law and not justified. The issue being a debatable one, the same cannot be rectified under section 154. There is no mistake apparent from the order under section 143(3) of the Assessing Officer nor from the order of the CIT(A). I, therefore, direct the Assessing Officer to delete the bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs of the CIT(A). 11. We have heard the rival submissions and perused the material on record. It is an undisputed fact that subsequent to the order of the ITAT, when the same was given effect vide order dated 13-9-2006, the income determined under the regular provisions fell short of MAT calculation made by the assessee in the return of income filed on 31-10-2001. At this stage, the Assessing Officer was required to bring back the calculation under section 115JB made by the assessee in the return of income, which was mentioned in the original assessment order dated 30-3-2004 while rejecting the revised claim. This mistake committed by the Assessing Officer at the stage of giving effect to the ITAT order has been made good by passing the order under section 154 dated 25-6-2007. It is clear that this is a mistake apparent from record and covered by the provisions of section 154 of the Act. It is true that in the course of assessment proceedings on 18-3-2004, after the expiry of time allowed under section 139(5), the assessee had filed a revised plea making certain additional claims and denying the liability under section 115JB of the Income-tax Act. However, it is to be noted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income and accepted the loss as Rs. 41,50,280. At the time of recomputing the income, the Assessing Officer did not invoke section 115J of the Act or make an assessment based on that section. Subsequently, the assessing authority noticed that the assessee had not arrived at the book profit in terms of Schedule XIV to the Companies Act, 1956, for assessment under section 115J of the Act and, accordingly, he computed the book profit under section 115J at Rs. 17,26,617 by adopting the rate of depreciation provided under the Companies Act as against the rate of depreciation adopted by the assessee under the Income-tax Rules, 1962. The assessee questioned the validity of the assessment under section 115J before the Commissioner (Appeals) and contended that the Assessing Officer was not entitled to invoke section 154 of the Act on the facts. The Commissioner (Appeals) held that the Assessing Officer had jurisdiction to proceed to assess the assessee under section 115J of the Act. The Tribunal rejected the contention of the assessee and held that the income was determined finally after giving effect to the order of the Commissioner (Appeals) and if at that stage it was found that section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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