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TMI Blog2001 (8) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... this order is at annexure P-4 with the appeal. On April 4, 1989, a Division Bench of the Punjab and Haryana High Court decided the case of Soda Silicate and Chemical Works v. CIT [1989] 179 ITR 588. It was, inter alia, held that the: "contributions made to the chit fund could not be treated as revenue expenditure nor could the payment or receipt of any amount to and from the chit fund be treated as the business activity of the assessee. The transactions involved did not give rise to any income assessable to income-tax nor any revenue loss in respect of which any deduction could be claimed". Thus, the order of the Tribunal disallowing the assessee's claim for deduction on account of loss in the chit fund was upheld. After the above decision, the Assessing Officer issued a notice under section 154 of the Act to the assessee. She was asked to show cause as to why the deduction on account of loss in chit fund be not disallowed. Finally, vide order dated February 13, 1992, a copy of which has been produced as annexure P-3 with the petition, the order of assessment was rectified. The assessee's claim for deduction of Rs. 74,205 on account of loss in chit fund by debiting the amount t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after giving notice. By virtue of sub-section (7), no amendment in the order passed by the authority can be made "after the expiry of four years from the end of the financial year in which the order sought to be amended was passed." The power given to the authority is wide. It can correct "any mistake" provided it is "apparent from the record". The first question that arises for consideration is--when a mistake can be said to be apparent from the record ? The plain language of the provision suggests that the mistake should be apparent. It must be patent. It must appear ex facie from the record. It must not be a mere possible view. The issue should not be debatable. Mr. Sawhney contended that when the view taken by an authority is ex facie contrary to the decision of the jurisdictional High Court or a superior court, the case would fall within the mischief of section 154. However, Mr. Bansal submitted that while deciding a matter, an authority cannot anticipate the view that may be taken by the High Court or the Supreme Court on a subsequent date. If at the time of the passing of the order, the authority takes a particular view, which is not contrary to the existing interpreta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 143 or 144 has to be normally made within a period of one or two years, the mistake can be rectified at any time during the period of four years. The obvious intention of the Legislature is that if the mistake has come to the notice of the authority within the prescribed time, it should not be allowed to continue. It should be rectified. Regardless of the fact that the limitation for passing an order of assessment or filing an appeal has elapsed. Still further, the provision has inbuilt safeguards. It provides for the issue of notice. It ensures the grant of an opportunity. It limits the jurisdiction of the authority. The action can benefit the assessee as well as the Revenue. In this situation, there appears to be no ground for placing an unduly restricted interpretation on the provision. Mr. Bansal contended that a judgment of a court operates only prospectively and not retrospectively. Thus, a decided cause cannot be redecided. Is it so ? A court decides a dispute between the parties. The cause can involve decision on facts. It can also involve a decision on a point of law. Both may have bearing on the ultimate result of the case. When a court interprets a provision, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... till further, we have the authoritative pronouncement of their Lordships of the Supreme Court in ITO v. Asok Textiles Ltd. [1961] 41 ITR 732. It was held that the High Court had : "fallen into an error in equating the language and the scope of section 35 of the Act (Indian Income-tax Act, 1922), with that of Order 47, rule 1 of the Civil Procedure Code. The language of the two is different because according to section 35 of the Act which provides for rectification of mistakes the power is given to the various income-tax authorities within four years from the date of any assessment passed by them to rectify any mistake 'apparent from the record' and in the Code of Civil Procedure the words are 'an error apparent on the face of the record and the two provisions do not mean the same thing". As such, the contention raised by learned counsel cannot be accepted. Mr. Bansal also pointed out that in the case of Jiyajeerao Cotton Mills Ltd. v. ITO [1981] 130 ITR 710, a Division Bench of the Calcutta High Court had categorically taken the view that the judgment of the Supreme Court does not have retrospective effect. This decision was affirmed by their Lordships of the Supreme Court as SLP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the view expressed by a court. Law cannot move with the wind. It is not a weather cock. The citizen is entitled to act on the basis of the law declared by the court. Once he acts, he should not be told that this summer is very hot. Thus, the law has changed even though the Legislature has not intervened. The gnawing uncertainty has certainly to be avoided. It was then contended that in a case where the Income-tax Officer intimates the assessee that the return has been accepted under section 143(1), the provision of rectification cannot be invoked. Learned counsel placed reliance on the decision of their Lordships of the Supreme Court in CIT v. Hero Cycles Pvt. Ltd. [1997] 228 ITR 463, in support of his contention. On a perusal of section 154, we find that the provision does not provide for rectification only when a mistake in the order is detected. The mistake has to be on the record of the case. The record would include everything on the case file. The return, the evidence and the order are a part of the record. The mistake can be detected from anything on the file. Thus, even in the case of an assessment under section 143(1), it has not to be assumed that there can be no e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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