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TMI Blog1979 (1) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... development rebate relating to assets installed prior to 1st January, 1958, by Hind Mills Ltd., was not liable to rectification under section 154 of the Act as it was not a mistake apparent from the record ? " The following facts leading to this reference are as, follows : The assessee before us is a limited company. With effect from July 1, 1962, another limited company, Messrs. Hind Mills Ltd., was amalgamated with the assessee-company. Messrs. Hind Mills Ltd. had certain development rebate which was unabsorbed and carried forward as per the order in that company's case for the assessment year 1962-63. We are concerned in the instant case with assessment year 1963-64. The ITO in the original order passed in the case of the assessee-comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plant had to be allowed to the successor in accordance with certain provisions of law. The Tribunal observed that they did not like to give a final decision whether on amalgamation an amalgamated company was entitled to development rebate prior to January 1, 1958, which was outstanding in the predecessor company but the only purpose of reference to s. 33(1) and s. 33(3) as it stood in 1963 was to indicate that there was scope for interpreting that the entire unabsorbed development rebate even relating to a period prior to January 1, 1958, would qualify for allowance in the case of the amalgamated company. Even if there was a mistake, in the view of the Tribunal, this was not a mistake apparent from the record which could be rectified under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by way of development rebate for that year under this clause shall be only such amount as is sufficient to reduce the said total income to nil ; and (ii) the amount of the development rebate, to the extent to which it has not been allowed, shall be carried forward to the following year, and the development rebate to be allowed for the following year shall be such amount as is sufficient to reduce the total income of the assessee for that year, computed in the manner aforesaid, to nil, and the balance of the development rebate, if any, still outstanding shall be carried forward to the following year and so on, so, however, that no portion of the development rebate shall be carried forward for more than eight years. Thus, there is a clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act as " the predecessor " sold or otherwise transferred to the amalgamated company referred to as " the successor ", any ship, machinery or plant in respect of which development rebate has been allowed to the predecessor under sub-s. (1), the successor shall continue to fulfil the conditions mentioned in sub-s. (3) of s. 34 in respect of the reserve created by the predecessor and under cl. (b) of s. 33(3), the balance of development rebate, if any, still outstanding to the predecessor in respect of such ship, machinery or plant shall be allowed to the successor in accordance with the provisions of sub-s (2), so, however, that the total period for which the balance of development rebate shall be carried forward in the assessments of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uary 1, 1958, had been allowed though under the Expln. 1 to s. 10(2)(vib) of the 1922 Act and under s. 33(2) of the 1961 Act no carry forward of unabsorbed development rebate was permissible in respect of machinery installed prior to January 1, 1958. This was clearly an error apparent on the face of the record. No controversy or no debate was open so far as these dates and clear-cut legal provisions are concerned. Under these circumstances, the Tribunal was in error when it held that the power of rectification under s. 154 was wrongly exercised by the ITO as, in the view of the Tribunal there was scope for debate and scope for interpretation. In our view, once the whole history of the legislation on this point and the legislation as it stoo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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