9911796707
TMI Blog2025 (3) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... AY 1992-93, was not so unequivocal that the assessee could claim relief solely based on such directions - We agree. However, the appellant has not rested its claim solely on those observations but has been proactive in moving an application seeking rectification of Return for AY 1997-98. It was hence incumbent upon the assessing officer, while disposing the application u/s 154, to have looked into the plea for rectification on the merits thereof. If at all the AO wished to test the claim of the assessee and verify whether the amounts had actually been paid, necessary documentary evidence could well have been sought. Tribunal states that the Assessing Authority has not tested whether the amounts were actually paid at the time of original assessment proceedings - This statement is again misconceived for the reason that there could be no verification of a claim that was never made by the assessee in the return of income. In fact, this is the very reason why the assessee has filed a petition for rectification. The object of Section 154 cannot be defeated by reason of such mechanical and technical objections. As to what constitutes 'record' for the purposes of Section 154, un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... late payment, and referred to as hereinafter as 'surcharge'). 3. The assessee had remitted 1/3rd of the demand raised and the remaining had been disputed before the High Court. The assessee had also obtained interim protection from the High Court. Before the Assessing Officer, the assessee took the stand that since the matter was pending in litigation and the claim had been made on accrual basis, seeing as the assessee followed mercantile system of accounting, the claim of expenditure should be allowed in AY 1992-93. 4. The Assessing Authority, however, disagreed with the assessee, taking the stand that only a claim in respect of amounts actually paid was liable to be allowed. The dispute that had been raised before the High Court ultimately culminated in an order passed in 1997 confirming the levy of surcharge. 5. Hence, according to the assessing authority, the claim, if at all, would crystallize only in 1997 and hence the assessee would not be entitled for its claim for surcharge in AY 1992-93. An order of assessment in respect of AY 1992-93 came to be passed along the aforesaid lines on 28.03.1995. 6. The assessment was challenged and was confirmed in appeal by the Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the mercantile system of accounting. 9. Taking a cue from the observations of the Tribunal, the assessee filed a petition under Section 154 of the Act in respect of AY 1998-99, seeking rectification of what it believed, was a mistake apparent on record. Inter alia, the assessee makes the position clear before the Assessing Authority that the demand arose on a contractual liability and that the dispute had, in fact, been settled in the financial year relevant to AY 1998-99. The facts have been captured in that petition as follows: 8. Rs. 65,22,000/- paid as additional charges to APSES (Andhra Pradesh State Electricity Board) has been disallowed in the assessment year 1992-93 vide your order dated 19-1-2006 made u/s. l54 rw 254. This was in pursuance of the order of the Income Tax Appellate Tribunal dated 26th July 1995 in ITA No.l871/Mds/1995 for the assessment year 1992-93. The Income Tax Appellate Tribunal had remanded the issue of deduction of additional charges with the direction in para 18 in page 6 of the ITAT order (copy enclosed) that if the liability is an accrued liability, it shall be deducted in the year of accrual, irrespective of whether the matter is in dispute a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ects the claim is three fold. Firstly, the Tribunal states that if at all the assessee was of the opinion that the contractual liability had been settled in the previous year relevant to AY 1998-99, it ought to have been made the claim in the return itself. This conclusion does not appeal to us as the petition under Section 154 has been filed solely for the reason that the claim was not made in the return of income. 15. The application of Section 154 would extend to situations such as the present where legitimate claims have been omitted to have been made, for a variety of reasons. Hence, the observations of the Tribunal rejecting the claim of the assessee on this ground are completely misconceived. 16. The second ground is that, the directions of the Tribunal in order dated 26.07.2005 in the appeal filed for AY 1992-93, was not so unequivocal that the assessee could claim relief solely based on such directions. We agree. However, the appellant has not rested its claim solely on those observations but has been proactive in moving an application seeking rectification of Return for AY 1997-98. It was hence incumbent upon the assessing officer, while disposing the application under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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