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TMI Blog2021 (6) TMI 593X X X X Extracts X X X X X X X X Extracts X X X X ..... reference to Section 154 of the Income Tax Act. Contrarily, this Court cannot go into those facts and circumstances regarding the mistake apparent from record. The respondent is clear in their terms that they are not intended to go beyond the scope of Section 154 and the notice was issued specifically stating that the mistake apparent from record alone is to be created. Even impugned notice reveals that the nature of mistake proposed to be rectified is clear that the respondent has not taken any steps to adjudicate the disputable issues. In TS BALARAM, INCOME-TAX OFFICER, COMPANY CIRCLE IV, BOMBAY [ 1971 (8) TMI 3 - SUPREME COURT] held that the authorities competent cannot go beyond the scope of Section 154 of the Income Tax Act in the said case. The issue adjudicated was considered as disputable by Apex Court. However, the precedent laid down is that the Authorities Competent are empowered to invoke Section 154 of the Income Tax Act only if they find any mistake apparent on record and such a mistake is sought to be rectified. In the present writ petition, the respondent has established that they have not gone beyond the scope of Section 154 and they have taken steps to rect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d order states that specific reply is given to the each of the queries and furnish details. Item 19 and 20 reveals that as per Provisional Statement of Total Income, it is noticed that the petitioner has claimed deductions in respect of provision for bad and doubtful debts under Section 36 (1) (viia). Item 20 states that the nature and basis for claiming exemption of ₹ 13,03,558.90 as TN Govt.Waiver u/s.36 (1) (viia) and further it states that explain whether this outstanding amount belongs to any rural branch. If so, which branch? 5. It is contended that the assessee clarified all these queries and substantially submitted materials to prove their claims in the order passed under Section 143 (3) read with Section 147 of Income Tax Act, dated 27.02.2015. The assessee claimed deductions in their return of income under Section 36 (1) (viia). In the said order, the Authorities considered all these facts and finally accepted the return of assessed income and thereafter the petitioner filed a petition under Section 154 of the Income tax Act, 1961 on 12.03.2015. Even in that petition, all these factors were brought to the notice of the Income Tax Authorities. The Authorities i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax Act, 1961 corresponded to S. 17(1) of the Indian Income-tax Act, 1922, but that section has now been omitted with effect from April 1, 1965 as a result of the Finance Act, 1965. From what has been said above, it is clear that the question whether S. 17(1) of the Indian Income-tax Act, 1922, was applicable to the case of the first respondent is not free from doubt. Therefore the Income-tax Officer was not justified in thinking that on that question there can be no two opinions. It was not open to the Income-tax Officer to go into the true scope of the relevant provisions of the Act in a proceeding under S. 154 of the Income-tax Act, 1961. A mistake apparent on the record must be an obvious and patent mistake and not, something which can be established by a long drawn 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. In Satyanarayan Laxminarayan Hegde and ors. v. Millikarjun Bhavanappa Tirumale(1) this Court while Spelling out the scope of the power of a High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts have held that both under Section 143 (1) (a) and Section 154, the Assessing Officer has power to act only when there is no dispute as to fact and law. The very matter which was sought to be rectified under Section 154 was pending decision before the Commissioner (Appeals). There was thus a live dispute on the subject-matter of Section 154, a dispute which could not be dismissed out of hand. Apart form no notice under Section 154 being permissible in the circumstances of the case, the Assessing Officer himself could not have decided any debatable issue under Section 143 (1) (a). By the impugned notice under Section 154, the Deputy Commissioner was seeking to correct the intimation under Section 143 (1) (a) by introducing a matter which he could not have decided under Section 143 (1) (a). 10. Citing all these judgments, the learned counsel for the petitioner reiterated that a case on hand is not a case of mistake apparent on record and it is a case of disputable issue which is sought to be adjudicated by the respondent and, therefore, the impugned notice is beyond the scope of Section 154 of the Income Tax Act and thus, the writ petition is to be allowed. 11. The le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and doubtful debts account and the deduction admissible u/s.36 (1) (vii) is limited to the amount by which such debt or part thereof exceeds the credit balance in the provision for bad and doubtful debts account. The language and intention of the legislature is clear and unambiguous and therefore the mistake in this case is apparent from record and thus issue of notice under section 154 is within ambit of section 154 of the Income Tax Act, it is mistake apparent from record. 13. The scope of Section 154 is also elaborated by the learned Senior Standing Counsel by stating that with a view to rectify, the Income Tax Authority referred to Section 116 may also be a ground to invoke Section 154 of the Act. Thus, it is a definite case of mistake apparent on record and, therefore, there is no error on the part of the respondent for invoking Section 154 of the Act. If at all, the contrary opinion is raised by the petitioner, it is left open to him to avail the opportunity provided and place all the grounds before the Authorities Competent enabling them to consider on merits and in accordance with law. 14. The principles to be adopted for the purpose of entertaining a writ petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is of the considered opinion that Section 154 cannot be converted as an appeal for entertaining a ground for adjudication of merits or disputable issues. Thus, the scope of Section 154 is undoubtedly limited with reference to the circumstances narrated under the provision itself. Section 154 unambiguously enumerates that mistake apparent from record. Thus, the Authority Competent must be able to identify the mistake apparent from record, then he can issue notice under Section 154 providing opportunity to the assessee and pass an order. 19. In the present case, the respondent has stated clearly that the provision for bad and doubtful debts is under Section 36 (1) (viia). Unless amount of bad and doubtful debts is debited to the provision for bad and doubtful debts account and the deduction admissible u/s.36 (1) (vii) is limited to the amount by which such debt or part thereof exceeds the credit balance in the provision for bad and doubtful debts account. The language and intention of the legislature is clear and unambiguous and therefore the mistake in this case is apparent from record and thus issue of notice under section 154 is within the ambit of section 154 of the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 71 of the Income Tax Act, was applicable to the case of the respondent is not free from doubt. Therefore, the Income Tax Officer was not justified in thinking that on that questions there could be no two opinions which was not proved the scope of relevant provisions of the Act under Section 154 of the Income Tax. Thus, the Supreme Court in unambiguous terms held that the authorities competent cannot go beyond the scope of Section 154 of the Income Tax Act in the said case. The issue adjudicated was considered as disputable by Apex Court. However, the precedent laid down is that the Authorities Competent are empowered to invoke Section 154 of the Income Tax Act only if they find any mistake apparent on record and such a mistake is sought to be rectified. As far as the other two judgments of the Calcutta High Court are concerned, the facts are also dissimilar and further the proposition mooted by the learned counsel for the petitioner cannot be disputed as scope of Section 154 of the Income Tax Act is limited and the Authorities are empowered to invoke Section 154 only by adhering to the grounds contemplated under the said provision. 23. In the present writ petition, the respond ..... X X X X Extracts X X X X X X X X Extracts X X X X
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