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TMI Blog2011 (7) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... the notional basis which is not permissible - in the present case, the Assessing Officer exceeded his authority in invoking Section 154 of the Act and the Tribunal below committed substantial error of law in affirming the unauthorised act of the Assessing Officer - Decided in favour of the assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that the action taken by the Assessing Officer was not permissible under Section 154 of the Act. e) Being dissatisfied, the Revenue preferred an appeal before the Incometax Appellate Tribunal and by the order impugned in this appeal, the Tribunal held that the Assessing Officer was bound to follow the judgment of the Hon'ble Supreme Court in the case of CIT Vs. United General Trust Ltd., reported in (1993) 200 ITR 488 while making the rectification. According to the Tribunal, it could not be held that no expenses were incurred for earning the dividend and thus, set aside the order of the Commissioner of Income-tax (Appeals). f) Being dissatisfied, the appellant has come up with the present appeal. 3. A Division Bench of this Court at the time of admission of this appeal formulated the following substantial questions of law: "i) Whether the question as to whether any expenditure was incurred for earning dividend income and if so, the quantum thereof could be gone into and decided in proceedings under Section 154 of the Income Tax Act, 1961 and the Tribunal was justified in law in upholding the order dated June 30, 2000 passed by the Assessing Officer under Section 154. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Khaitan, therefore, prays for setting aside the order passed by the Tribunal below. 6. Mr. Nizamuddin, the learned Advocate appearing on behalf of the Revenue, on the other hand, supported the order passed by the Tribunal below and has contended that this Court within the narrow scope of Section 260A should not interfere with the discretion exercised by the Assessing Officer and affirmed by the Tribunal below. Mr. Nizamuddin, thus, prays for dismissal of the appeal. 7. Therefore, the only question that falls for determination in this appeal is whether the Tribunal below was justified in approving the order of rectification of the assessment notwithstanding the fact that no materials was available to indicate the actual expenditure of the appellant in getting the net dividend and the consequent benefit of deduction under Section 80 M of the Act and the order of rectification was not based on actual expenditure. 8. After hearing the learned counsel for the parties and after going through the materials on record we find that in the original return filed by the appellant there was no mention of any expenditure in getting the dividend. It was stated that the interim dividend to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ributors (Baroda) P. Ltd. (supra), the five-judge-bench of the Supreme Court laid down the following proposition for computing the deduction under Section 80M of the Act: "Now when in computing the total income of the assessee, a deduction has to be made from "such income by way of dividends", it is elementary that "such income by way of dividends" from which deduction has to be made must be part of gross total income. It is difficult to see how the language of this part of sub-sec. (1) of S. 80M can possibly fit in if "such income by way of dividends" were interpreted to mean the full amount of dividend received by the assessee. The full amount of dividend received by the assessee would not be included in the gross total income: what would be included would only be-the amount of dividend as computed in accordance with the provisions of the Act. If that be so it is difficult to appreciate how for the purpose of computing the total income from the gross total income any deduction should be required to be made from the full amount of the dividend. The deduction required to be made for computing the total income from the gross total income can only be from the amount of dividend compu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o deal with the scope of Section 22 of the U. P. Trade Tax Act, 1948 conferring similar power of rectification as indicated in Section 154 of the Act. The said provision of Section 22 is quoted below: "22. Rectification of mistakes.--(1) Any officer or authority, or the Tribunal or the High Court may, on its own motion or on the application of the dealer or any other interested person rectify any mistake in any order passed by him or it under this Act apparent on the record within three years from the date of the order sought to be rectified: Provided that where an application under this sub-section has been made within such period of three years, it may be disposed of even beyond such period: Provided further that no such rectification as has the effect of enhancing the assessment, penalty, fees or other dues shall be made unless reasonable opportunity of being heard has been given to the dealer or other person likely to be affected by such enhancement. (2) Where such rectification has the effect of enhancing the assessment, the assessing authority concerned shall serve on the dealer a revised notice of demand in the prescribed form and there from all the provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seen; obvious; plain. It means "open to view, visible, evident, appears, appearing as real and true, conspicuous, manifest, obvious, seeming". A mistake which can be rectified under Section 22 is one which is patent, which is obvious and whose discovery is not dependent on argument or elaboration. "13. In our view rectification of an order does not mean obliteration of the order originally passed and its substitution by a new order. What the Revenue intends to do in the present case is precisely the substitution of the order which according to us is not permissible under the provisions of Section 22 and, therefore, the High Court was not justified in holding that there was mistake apparent on the face of the record. In order to bring an application under Section 22, the mistake must be "apparent" from the record. Section 22 does not enable an order to be reversed by revision or by review, but permits only some error which is apparent on the face of the record to be corrected. Where an error is far from self-evident, it ceases to be an apparent error. It is, no doubt, true that a mistake capable of being rectified under Section 22 is not confined to clerical or arithmetical mistak ..... X X X X Extracts X X X X X X X X Extracts X X X X
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