9911796707
TMI Blog2006 (5) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... cer 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 the view that the following substantial question of law arises for determination by this court "Whether, on the facts and in the circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 hon'ble Supreme Court in T. S. Balaram, ITO v. Volkart Brothers [1971] 82 ITR 50 and CIT v. Hero Cycles P. Ltd. [1997] 228 ITR 463. 7. The order of rectificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction 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 goods is not allowed." 9 Learned counsel for the assessee submits that the issue whether the loss was to be adjusted while calculating the benefit under section 80HHC of the Act, has been the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se 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 be an error apparent on the face of the record. As the above discussion of the rival contentions show the alleged error in the present case is far from self-evident and if it can be established, it has to be established by lengthy and complicated arguments." 11. In a later ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld 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 and it requires proof that by such a mistake the final order fails to give proper effect of the law and its functions. Once the Tribunal or authority is able to predicate with certainty as to in what manner and how the order suffers by a mistake apparent on its record supported by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 possible if question is debatable". Both the cases are distinguishable The question whether the case for rectification was made out, has to decided from case to case. If it can be held that there was a "mistake apparent from the record", rectification is permissible. When an issue is debatable, it ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
