COMMISSIONER OF INCOME TAX Vs. STEEL STRIPS LTD

JUDGEMENT

(1.) This reference has been made at the instance of revenue by the Income-tax Appellate Tribunal, Chandigarh in pursuance of order of this Court dated 16-9-2003 in ITC No. 9 of 1998. The referred question has arisen from theorder of the Tribunal dated 13-12-1996 in ITA No. 314/Chd./ 1991 for the assessment year 1985-86 and is as under:

(2.) Assessment of the Assessee for the assessment year 1985-86 was completed on 29-3-1988. There after, the Assessee sought rectification under Section 154 of the Act to claim depreciation. The application was allowed vide order dated 30-6-1988 and in come was recomputed on that basis. Thereafter, the Assessing Officer noticed that while recomputing the income, provision of Section 80VVA was overlooked and deduction allowed was in excess of limit stipulated in the said provision. Accordingly, notice dated 28-8-1989 was issued. The objection of the Assessee was that the said provision stood omitted with effect from 1-4-1988 and the issue being debatable, was outside the scope of Section 154 of the Act. On merits, it could not be disputed that deductions allowed were beyond the specified limit. The Assessing Officer rejected the objection and allowed the rectification as per the statutory limit. On appeal, the CIT(A) set aside the order of the Assessing Officer on the ground that the rectification did not relate to a 'mistake apparent on record', as is required for invoking Section 154 of the Act and was on a debatable issue and was thus, not permissible in view of law laid down by the Hon'ble Supreme Court in T.S. Balaram, ITO v. Volkart Bros., 1971 82 ITR 50.

(3.) The findings recorded by the Assessing Officer, CIT(A) and the Tribunal on the issue are as under: