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TMI Blog2004 (10) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... reversed or modified by the subsequent decision of a superior court in another case that cannot be made a ground for review under Order 47, rule 1 of the Civil Procedure Code then it necessarily follows that the same cannot be made basis for claiming rectification under section 154 of the Income-tax Act - Tribunal was right in holding that the Assessing Officer had no jurisdiction to invoke the powers under section 154 - - - - - Dated:- 4-10-2004 - Judge(s) : A. M. SAPRE., ASHOK KUMAR TIWARI. JUDGMENT The judgment of the court was delivered by A.M. Sapre J. - This is a reference made under section 256(1) of the Income-tax Act, 1961, at the instance of the Revenue (Commissioner of Income-tax) to answer the following questions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer allowed to be set off against the income of the assessment years 1988-89 and 1989-90 by his order passed on March 31, 1989. The Assessing Officer later realised that the investment allowance could not have been claimed by the assessee on the drilling machine or in other words, it was noticed that the same was wrongly granted, a notice for rectification under section 154 of the Act was issued to the assessee to show cause as to why the relief of investment allowance be not withdrawn. The assessee contested the issue. However, by order dated October 19, 1992 (annexure A) the Assessing Officer withdrew the benefit of investment allowance by taking recourse to provisions of rectification namely, section 154 ibid. In the opinion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal assessment order could always be withdrawn. In reply, learned counsel for the assessee placing reliance on the decisions reported in Geo Miller and Co. Ltd. v. Deputy CIT [2003] 262 ITR 237 (Cal) ; CIT v. K. Venkateswar Rao [1988] 169 ITR 330 (AP) ; [1983] 143 ITR 961 (MP) ; CIT v. Agya Wanti [2001] 248 ITR 641 (J K) contended that in this case the Assessing Officer had no jurisdiction to invoke powers under section 154 of the Act. According to learned counsel, the law laid down by the Supreme Court in the case of N.C. Budharaja and Co. [1993] 204 ITR 412 being much subsequent to the order passed by the Assessing Officer in assessment and hence, the same cannot be made the basis to seek rectification under section 154 ibid. In other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] 204 ITR 412 (SC) for invoking the powers under section 154 of the Act seeking rectification. In other words, on the date when the rectification was done (October 19, 1992) by the Assessing Officer, the decision of N.C. Budharaja and Co. [1993] 204 ITR 412 (SC) was not made the basis nor could it have been made. It is for the simple reason that it had not been rendered till that date. It is not in dispute that on the date when the assessee claimed the benefit of investment allowance i.e., on March 31, 1989 the issue in regard to its claim was a debatable one. In other words, on that date, there was cleavage of judicial opinion between the several High Courts. Some had taken a view in favour of the assessee and some in favour of the Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 47, rule 1 can always be taken into consideration while construing section 154 of the Act. It was held that when a decision on a question of law on which the impugned judgment of the court is based has been reversed or modified by the subsequent decision of a superior court in another case that cannot be made a ground for review under Order 47, rule 1 of the Civil Procedure Code then it necessarily follows that the same cannot be made basis for claiming rectification under section 154 of the Income-tax Act. In the case in hand, the decision of N.C. Budharaja and Co. [1993] 204 ITR 412 (SC) was not even delivered on the date when the order for rectification was passed. It was rendered much thereafter. We, therefore, respectfully concur with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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