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TMI Blog2024 (1) TMI 947X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, the Ld. CIT-(A) was not justified and grossly erred in sustaining the order of Ld. AO without considering the fact that the issues raised are within the purview of powers of rectification u/s 154 of the Act. 3.1 That on the facts and in the circumstances of the case, the Ld. CIT-(A) ought to consider that as per proposition laid down by Hon'ble Apex Court about the nature of subsidy, the claim of the appellant that TUF subsidy is capital receipt and not chargeable to tax is as per law and fall within the ambit of section 154 of the Act. 3.2 That on the facts and in the circumstances of the case, the Ld. CIT-(A) ought to consider that as per proposition laid down by Hon'ble Apex Court and Hon'ble Jurisdictional High Court about the nature of subsidy, the claim of the appellant that subsidy under RIPS is capital receipt and not chargeable to tax is as per law and fall within the ambit of section 154 of the Act." Non-quantification of MAT Credit: 3. It was submitted before us that rectification application u/s 154 of the Act was filed which has been disposed off without considering appellant's submission. The AO is directed to modify the order accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of mistake for the purposes of Section 154 of the Act. The ld. CIT(A) held that for the purpose of Section 154, a mistake is not something which has to be established by a long drawn process of reasoning or where two opinions are possible or which are debatable in nature or which are not obvious. 8. Before us, the ld. AR argued and submitted the arguments in written form which are as under: Gr. No.3 Claim of Interest Subsidy received under Technology Upgradation Fund Scheme (TUFS) and Electricity duty subsidy under Rajasthan Investment Promotion Scheme (RIPS) as capital receipt while computing the Total Income. Brief Facts The appellant received Interest subsidy under TUF scheme amounting to Rs. 1,04,37,640/- and Electricity duty subsidy under Rajasthan Investment Promotion Scheme (RIPS) amounting Rs. 18,08,454/-. The appellant while filing the return of income included the aforesaid subsidies in its total income and paid tax on the same. The Ld. AO completed the assessment by passing the order u/s 143(3) of the Act dated 02-06-2014. However, the Ld. AO failed to acknowledge the fact that the amount offered to tax by the appellant included certain incomes in the nature of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /Jodh/2018). (Kindly refer page no. 48 to 68 of PB). PCTT vs. M/s Nitin Spinners Limited (116 taxmann.com 26) Jurisdiction High court (Kindly refer page no. 69 to 71 of PB). Further your Honour would appreciate the fact that SLP filed against the aforesaid order was dismissed by the Hon'ble Supreme court. (Kindly refer page no. 72 to 73 of PB). Order of Hon'ble Mumbai ITAT in the case of M/s Vinati Organics Limited vs. ACIT (ΙΤΑ Νο. 1667 to 1669/Mum/2021). In view of the above judicial pronouncement, the respondent humbly state that, interest subsidy under TUF / RIPS as capital receipt and not chargeable to tax. 9. On the other hand, the ld. DR argued that rectification cannot be carried at this juncture and assessee has already filed return u/s 139(1) and there is no mistake of the AO and the same cannot be rectified. 10. Heard the arguments of both the parties and perused the material available on record. 11. We have gone through the CBDT Circular No. 68 dated 17.11.1971 which is reproduced below: "SECTION 154 OF THE INCOME-TAX ACT, 1961 - RECTIFICATION OF MISTAKE - APPARENT FROM RECORDS - MISTAKES APPARENT FROM RECORDS - WHETHER CAN BE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctifying any such mistake which has been brought to its notice by the assessee or by the deductor or by the collector, and where the authority concerned is [the Joint Commissioner (Appeals) or] the Commissioner (Appeals), by the Assessing Officer also. (3) An amendment, which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee or the deductor or the collector, shall not be made under this section unless the authority concerned has given notice to the assessee or the deductor or the collector of its intention so to do and has allowed the assessee or the deductor or the collector a reasonable opportunity of being heard. (4) Where an amendment is made under this section, an order shall be passed in writing by the income-tax authority concerned. (5) Where any such amendment has the effect of reducing the assessment or otherwise reducing the liability of the assessee or the deductor or the collector, the Assessing Officer shall make any refund which may be due to such assessee or the deductor or the collector. (6) Where any such amendment has the effect of enhancing the assessment or reducing a refund already made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Haryana High Court (FB) in the case of CIT vs. Smt. Aruna Luthra (supra), where the facts and the decision of the Hon'ble High Court are reproduced for the sake of convenience herein below: "The power given to the authority under section 154 of the Income-tax Act, 1961, is very wide. It can correct "any mistake" provided it is "apparent from the record". Section 154 does not provide that the error has to be seen in the order with reference to the date which it was passed. 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. Thus, even in the case of an assessment u/s 143(1), it cannot be assumed that there can be no error apparent from the record. Section 154 has been enacted to enable the authority to rectify the mistake. The legislative intent is not to allow it to continue. This purpose has to be promoted. The legislature's will has to be carried out. By placing a narrow construction, the object of the legislation would be defeated. Parliament has prescribed a period of four years for correction of mistake. While an assessment u/s 143 or 144 has to be normally ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interprets the law and states what the law has always been and must be understood to have been Where an order is made by an authority, on the basis of a particular decision, the reversal of such decision in further proceedings will justify a rectification of the order based on that decision. A binding decision rendered by a court is always retrospective and the decision which is overruled was never the law. The overruling decision should be deemed to have been in force even on the day when the order sought to be rectified was passed. A subsequent binding decision of the Supreme Court or of the High Court has retrospective operation as in the case of subsequent legislation and overruling is always retrospective. Section 254(2) and section 154 of the Income-tax Act enable the concerned authorities to rectify any mistake apparent from the record. The said expression has a wider content than the expression error apparent on the face of the record" occurring in Order 47, rule 1 of the Civil Procedure Code The restrictions on the power of review under Order 47, rule 1, Civil Procedure Code, 1908. The restrictions on the power of review u/s 47, rule 1, I do not hold good in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Ker.), disclosed a mistake apparent from the record, in the light of the subsequent overruling of the very decision relied on by the Appellant Tribunal, by a Division Bench in the decision reported in Santha S. Shenoy's case (1982) 135 ITR 39 (Ker). When the Bench of the High Court overruled the decision of the single judge in Sethumadhavan's case (1980) 122 ITR 587 (Ker.), the earlier decision was never the law. The law on the point at all times was as stated by the Bench in the decision reported in Santha S. Shenoy's case (1982) 135 ITR 39 (Ker.) The application for rectification, dated June 17, 1982 was within four years from the date of the order of the Tribunal, and was one filed within the time allowed by law. The order passed by the Appellate Tribunal in the appeal disclosed a mistake apparent from the record, as it held that the assessee was not entitled to interest on the advance-tax paid beyond the due date, which had to be rectified. This should have been done by the Appellate Tribunal in exercise of the powers vested in it u/s 254(2) read with section 154 of the Income-tax Act. The Appellate Tribunal was directed to dispose of the application for rectification in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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