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TMI Blog2006 (5) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... ised is as under : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the Assessing Officer w not justified in exercising the power under section 154 adjusting the loss suffered from export of trading goods against the deduction admissible under section 80HHC being a debatable issue without appreciating the facts that the subsequent decision of the hon'ble Bombay High Court in the case of IPCA Laboratories Ltd. v. Deputy CIT (No. 1) [2001] 251 ITR 401 and its endorsement by the hon'ble Supreme Court does not bring it within the ambit of an apparent mistake of law rectifiable under section 154 of the Income-tax Act ?" 3. However, after hearing counsel for the parties, we are of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... require no discussion or argument. The Assessing Officer proceeded to rectify the mistake vide order dated March 3, 1999, with the observation that vide order dated January 25, 1999, for the assessment year 1996-97 it was held that if there was loss from the export of trading goods, deduction foe loss was not admissible. 6. The assessee preferred an appeal, relying upon the decision of the Income-tax Appellate Tribunal Chandigarh Bench, Chandigarh in the case of Avon Cycles Limited to the effect that the loss suffered from trading is to be ignored. The appeal of the assessee was accepted. This view has been affirmed by the Tribunal on the ground that since two views were possible, the rectification was not justified as held by the ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ither on law or on facts, which required no discussions or arguments". "5. Relevant discussion in the order of rectification .—. . . The argument made by the assessee for claiming this deduction is that the loss arising from export of trading goods is to be considered for determining the deduction under section 80HHC as per the proviso to section 80HHC(1). Similar argument was made by the assessee for subsequent year, i.e., assessment year 1996-97 for which the assessment was completed vide order dated January 25, 1999, where it was held that no further deduction is to be allowed under the proviso to section 80HHC(1) if there is loss from the export of trading goods. In view of this fact, the deduction for loss from export of trading g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Supreme Court in IPCA Laboratory Ltd. v. Deputy CIT [2004] 266 ITR 521. A bare perusal of the citation shows that the judgments/orders taking a different view on the issue were delivered after the order under section 154 of the Act had been passed in the case of the assessee. 10 Section 154 of the Act provides for rectification of any mistake apparent from the record. The expression "mistake apparent from the record" has been interpreted in several decisions. In Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tirumale, AIR 1960 SC 137 at page 141, it was observed "An error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opinions can hardly be said to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it could be discerned with some precision after a fair probe into the assessment records and a reasonable and probable conclusion can be arrived at, that the court's conscience has been shaken, in that there appears an error on record which has to be certainly corrected, then it would appear that the jurisdiction of the Tribunal vesting with power to rectify such mistakes arises. As has been repeatedly pointed out, it is very difficult to state where the jurisdiction begins and where it ends. One thing, however, emerges from the discussion above. The essence of rectification is to bring the order which was expressed and intended to be in pursuance of the existing law, into harmony with such law. It presupposes a particular state of affairs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontext, it was observed (page 53) : "A mistake apparent on the record must be an obvious and pate mistake and not something which can be established by a long draw' process of reasoning on points on which there may conceivably be two opinions. As seen earlier, the High Court of Bombay opined that the original assessments were in accordance with law though in our opinion the High Court was not justified in going into that question. 15. In Hero Cycles P. Ltd. [1997] 228 ITR 463 (SC), claim for weight deduction in respect of export sales commission, etc., was disallowed. On appeal, the said claim was partly allowed. Thereafter, the Assessing Officer allowed the claim by way of rectification. It was held that the "rectification is not p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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