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TMI Blog2010 (11) TMI 351X X X X Extracts X X X X X X X X Extracts X X X X ..... 19-11-2010 - D. Manmohan, R.K. Panda, JJ. C. Naresh for the Appellant Jitendra Yadav/DR for the Respondent ORDER R.K. Panda: The above two Miscellaneous Applications filed by the revenue and the Cross Objections against such Miscellaneous Applications filed by the assessee are arising out of the consolidated order dated 9.5.2008 passed by the Tribunal in ITA Nos 5104/Mum/2008 and 5105/Mum/2008 for the assessment years 1999- 00 and 2000-01 respectively. 2. In this case, the Assessing Officer in both the years had disallowed the claim of provisions for bad and doubtful debts while computing book profit u/s 115JA by following the decision of the Hon'ble Madras High Court in the case of Beardsel Ltd reported in 244 ITR 256 on the ground that it was only provision towards an unascertained liability and hence was covered under clause (c) of Explanation to sec. 115JA (2) of the Act. 2.1 In appeal, the CIT(A) upheld the action of the Assessing Officer. On further appeal by the assessee, the Tribunal vide order dated 9.5.2008 allowed the claim of the assessee based on the decision of the Special Bench of the Tribunal in the case of JCIT vs Usha Martine I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld DR referring to the order of the Supreme Court in the case of M K Venkatachalam vs ITO and another reported in 34 ITR 143(SC) submitted that order which was proper and valid when it was made can be said to disclose a mistake apparent from record if it becomes erroneous by virtue of subsequent retrospective amendment of law. Since in the instant case, the Tribunal has directed the Assessing Officer not to add provision for bad and doubtful debts and provision for rural advances for the purpose of sec. 115JA and since there is subsequent amendment by Finance Act, 2009 with retrospective effect from 1.4.1998, therefore, in view of the decision of Hon'ble Supreme Court cited supra, the order of the Tribunal contains a mistake apparent from record, which needs to be rectified. He, accordingly, submitted that the order of the Tribunal may be set aside and that of the order of the Assessing Officer be restored. 5.1 The ld counsel for the assessee, on the other hand submitted that the Tribunal had allowed the claim of the assessee based on the decision of the Special Bench in the case of Usha Matine Industries Ltd (supra). The issue was also subsequently decided in favour of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e High Court in the said decision has been held that any irrecoverable debt written off is allowable in computing the book profits. He accordingly submitted that the Miscellaneous Application filed by the revenue should be dismissed. 7. We have considered the rival submissions made by both the parties. Undisputedly, the Tribunal in the instant case following the decision of the Special Bench of the Tribunal in the case of Usha Matine Industries Ltd (supra). has directed the Assessing Officer not to add bad and doubtful debts and provision for rural advances for the purpose of sec. 115JA of the I T Act. The order of the Tribunal is dated 9.5.2008. The provisions of sec. 115JA were amended by the Finance (No.2) Act 2009 with retrospective effect from 1.4.1998. Therefore, the question that arises is whether the order of the Tribunal, which was passed prior to the insertion of the provisions with retrospective effect can be rectified or not. 7.1 We find an identical issue had come up before the Hon'ble Supreme Court in the case of ITO vs Bombay Dyeingand Mfg Company Ltd reported in 34 ITR 143(SC): The facts in that case are as under: "The assessment was completed on the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence the Legislature may have thoughts it necessary to confer on the ITO specific and express power to revise his order to give effect to the amendments in question. But, it was pointed out, the distinction in the language of both the provisions is not available to hold that the retrospective operation given to the provisions in question was not intended to affect concluded assessments. Then the Supreme Court addressed itself to the scope and effect of the expression "mistake apparent from the record ", in the context of the effect and meaning of retrospectively of a statute. It observed at pp. 149 and 150 as under: "At the time when the Income-tax Officer applied his mind to the question of rectifying the alleged mistake, there can be no doubt that he has to read the principal Act as containing the inserted proviso as from April 1, 1952. If that be the true position, then the order which he made giving credit to the respondent for Rs.50,603-15-0 is plainly and obviously inconsistent with a specific and clear provision of the statute and that must inevitably be treated as a mistake of law apparent from the record. If a mistake of fact apparent from the record of the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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