9911796707
TMI Blog1980 (2) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... which year the claim actually related ? " The facts leading to the reference are as follows: " M/s. Mattoo Worsted Spinning and Weaving Mills (hereinafter called 'the assessee') is a private company engaged in the manufacture of spinning and weaving of worsted wool. The assessee moved an application under s. 154 of the I.T. Act on January 15, 1973, to the ITO seeking rectification of the mistake in the order of assessment in respect of the assessment year 1967-68. The assessee sought set off of allowance under s. 80J for the assessment year 1967-68. The ITO had already concluded the income of the assessee for the assessment year 1970-71. After examination of the accounts, the ITO deducted both claims, depreciation and development rebate, brought forward, from the previous assessment years and also deduction for relief under s. 80J, both for the year 1970-71, as well as sums brought forward and due for the assessment years 1968-69 and 1969-70. The figures of deductions allowed by the ITO were Rs. 46,900, Rs. 43,140 and Rs. 59,613 for the assessment years 1968-69, 1969-70 and 1970-71, respectively. This assessment, as stated above, was made on February 17, 1971. An application un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of an income to income-tax is not dependent upon the declaration thereof in the return, in the same way no claim for a relief which is, otherwise, permissible under the Act, and which is not claimed, cannot disentitle a taxpayer from obtaining the relief due. All that s. 80J requires for claiming the set-off is that the business must have started functioning on or after April 1, 1961, and that the business was not formed by splitting it up or it should not be a case of reconstruction of a business already in existence by the transfer of any machinery or plant previously used for any purpose. In the present case, these conditions indisputably exist. It is further urged that when the assessee was afforded relief in respect of the later three years, there was no point in refusing the same in respect of the assessment year 1967-68. The mandate of law required that the ITO ought to have notified this to the assessee and should have afforded the relief for the said assessment year and allowed deduction according to the provisions of the section. Our attention is also invited to the Circular issued by the Central Board of Revenue in 1955 which is binding upon the I.T. authorities an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment year 1970-71. Without making any claim no relief under s. 80J could be afforded to the assessee. There was no obligation cast on the ITO to afford the relief to the assessee, when no such relief was claimed and the return filed did not seek any deduction. The relevant column of the return showed the word " Nil ". As regards the circular issued by the Central Board, it is submitted that, this would not apply to those reliefs where calculations were to be made merely by ministerial act but by the application of mind by examining whether the conditions as required by s. 80J were satisfied. Whether the conditions that entitled the assessee to carry forward the claim were satisfied or not, required a proper adjudication. Therefore, it was not a case of a mistake apparent on the face of the record. Relying upon the two decisions of the Allahabad High Court in Anchor Pressings P. Ltd. v. CIT [1975] 100 ITR 347 and Sharda Prasad v. CIT [1975] 100 ITR 373, learned counsel has submitted that s. 154 would not come to the aid of an assessee who has failed or has omitted to prefer a claim in the assessment proceedings. The section could operate only on the facts which were clearly on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt on the face of the record in order to justify the invoking of s. 154 in the present case. I agree with the learned counsel for the Revenue that a mistake cannot be said to be apparent on the face of the record, if it involves going deeply into the matter or the matter is decided after a long drawn debate. A mistake must appear on the face of the document. In the present case, as stated above, the conditions as set out in s. 80J are satisfied. There is no gainsaying the fact that the assessee was afforded relief under the above-mentioned section in respect of the three later assessment years, viz., 1968-69, 1969-70 and 1970-71. Therefore, when the I.T. authorities themselves were satisfied that a case for claiming the deduction and the carry forward was made out in respect of the above-mentioned three assessment years, there was no point in refusing the relief in respect of the assessment year 1967-68. The argument that applies for claiming the deduction in respect of the three later assessment years would equally apply for claiming the deductions in respect of the assessment year 1967-68. It is true that the assessee had not specifically claimed the relief for the above-mentione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for resolving it. It was a case of a mistake, which was quite apparent on the face of the record. The ITO should have, therefore, allowed the relief by making the necessary calculations, which in the words of the Tribunal, was only a ministerial act to be performed. This brings us to the question as to whether the assessee had lost the right to move the ITO under s. 154, because the matter related to the assessment year 1967-68, when the right to claim the deduction had accrued to him In my opinion, the view taken by the Tribunal appears to be quite correct. It is admitted that in the assessment year 1967-68, and also for the subsequent years, the assessee did not show any profits. It was only in the year, 1970-71, that the profits were shown for the first time. Therefore, the right to claim deductions and set off could be only in this year and not in the preceding years. The assessee could, therefore, carry forward the losses which he had incurred for the year 1967-68 to the assessment year 1970-71, when profits were first made. In this year, set off was allowed for the years 1968-69, 1969-70 and 1970-71, but not for the year 1967-68. Therefore, the right to claim accrued to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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