MAC CHARLES Vs. ASST COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assessee has filed this appeal under Section 260A of the Income -Tax Act, 1961 (for short 'the Act') challenging the order dated 3 -8 -2007 made in ITA No.296/2006 passed by the Income Tax Appellate Tribunal, Bangalore Bench 'A' (for short 'the Tribunal') whereby the Tribunal dismissed the appeal filed by the assessee while confirming the order passed by the Commissioner of Income Tax (Appeals) (for short 'the First Appellate Authority') and the Assessing Authority wherein the Assessing Authority rejected the application filed by the assessee under Section 154 of the Act for rectification of the assessment order dated 11 -08 -2004.

(2.) THE assessee is a Public Limited Company carrying on the hotel business. The appellant -assessee filed return of income for the assessment year 1997 -98 on 19 -11 -1997 declaring the total income comprising of income from business, capital gain and other sources. The said return was originally processed under Section 143(1)(a) subsequently, it was revised under Section 143(1)(b) to adjust the brought forward loss and depreciations of the earlier years. The said order was rectified under Section 154 of the Act by the Assessing Officer on 26 -10 -1998 by allowing deduction under Section 80HHD of the Act. On 23 -3 -1999, the assessee filed an application to rectify certain mistakes while calculating deduction under Section 80HHD of the Act. The said application was rejected by the Assessing Authority on 8 -9 -1999. In the meanwhile, the case of the appellant was selected for scrutiny and notices under Section 142(1) and 143(2) were issued to the assessee. The assessee produced necessary documents, thereafter an assessment order was passed on 30th March 2000 and a demand notice was issued to the assessee. The assessee being aggrieved by the said assessment order, preferred an appeal before the First Appellate Authority. Further, the appellant also filed an appeal challenging the order dated 8 -9 -1999 rejecting the application filed under Section 154 of the Act. The said appeal was allowed by the First Appellate Authority on 16 -11 -2000 and directed the Assessing Authority to re -compute the deduction in accordance with law. Further the appeal filed by the assessee challenging the assessment order dated 30 -3 -2000 was also partly allowed by the First Appellate Authority by its order dated 19 -2 -2001. The assessee being aggrieved by the order dated 19 -2 -2001 passed by the First Appellate Authority preferred an appeal before the Tribunal in appeal No.301/2001. The Appellate Tribunal by its order dated 27 -4 -2004, allowed the appeal directing the Assessing Officer to include the interest from Bill of Discount as income from business even for the purpose of computing deduction under Section 80HHD.

(3.) THE Assessing Officer in order to give effect to the order passed by the Tribunal as well as the First Appellate Authority, passed the revised assessment order on 11 -8 -2004 in accordance with the directions issued by the Tribunal. The assessee filed an application under Section 154 of the Act on 31 -12 -2004 for rectification of the revised assessment order dated 11 -08 -2004. After lapse of more than six months, the said application was rejected by the Assessing Authority on 20th October 2005. Being aggrieved by the said rejection order, the assessee preferred an appeal before the Commissioner of Income -Tax (Appeals) -III, Bangalore contending that the order passed by the Assessing Authority rejecting the application for rectification of mistake is contrary to law in view of nonpassing of order on the said application within a period of six months and the application is deemed to have been rectified. Hence, sought for allowing the appeal.