COMMISSIONER OF INCOME TAX Vs. GANGA IRON INDUSTRIES

JUDGEMENT

(1.) THIS is a reference made by the Tribunal at the instance of the revenue for answering the following question. For the year 1972-73 the question is :

(2.) THE facts stated by the Tribunal are : For the asst. yr. 1972-73 : THE assessee is a registered firm earning income from running two industrial undertakings. In the return filed, the assessee claimed deduction under section 80J of the Act on the capital employed in the industrial undertakings. THE ITO while allowing deduction under s. 80J excluded the debits as per sub r. (4) of r. 19A of the IT rules, 1962. Thus, he allowed a relief of Rs. 7,16,000 only. In appeal before the AAC the assessee took this ground with respect to relief under s. 80J as ground No. 2 of the memo of appeal but as per the order of the AAC this ground was not pressed by the assessee. Later on the assessee filed an application under s. 154 of the Act for rectification of the said order praying that his claim under s. 80J should be considered in the light of the subsequent decision declaring r. 19A of the IT Rules ultra vires s. 80J of the Act, but the AAC rejected this application of the assessee on the ground that as the assessee had not pressed the issue at the appeal stage, there was no mistake apparent in the order which needed rectification. THE set the order passed by the AAC with the following observations :

(3.) LEARNED counsel for the parties contended that this reference is concluded in view of the decision of the Supreme Court. So far as the first question in respect of the asst. yr. 1972-73 is concerned, counsel for the assessee contended that as the matter has been sent back to the AAC for consideration of the application for rectification in view of the two decision in (1977) 107 ITR 909 (Cal) (supra) and (1977) 110 ITR 256 (Mad) (supra), the AAC will have to follow the decision of their Lordships of the Supreme Court in (1985) 152 ITR 308 (SC) (supra) and, therefore, even if the question is not answered, it will make no difference. LEARNED counsel for the revenue, however, contended that the Tribunal took the view that there was an error apparent on the face of the record and therefore directed the AAC to consider the application for rectification in view of the two decisions, but these decisions now have been overruled by their Lordships of the Supreme Court and in this view of the matter the question has to be answered against the assessee by saying that the Tribunal was not justified in law in directing the AAC to reconsider the application for rectification.