COMMISSIONER OF INCOME TAX Vs. AGYA WANTI

JUDGEMENT

(1.) BY this reference under Section 256(1) of the Income-tax Act, 1961 ("the Act"), the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar ("the Tribunal"), has referred the following questions of law to this court for opinion at the instance of the Revenue :

(2.) THE material facts of the case, briefly stated, are as follows. THE assessee submitted the return of its income under the Income-tax Act for the assessment year 1975-76. In the return, the assessee did not claim depreciation on the truck owned by him and used for the purpose of his business. THE Income-tax Officer assessed the income of the assessee on the basis of the return under Section 143(1) of the Act and determined the taxable income at Rs. 19,067. Later, the Income-tax Officer rectified the order under Section 154 of the Act as he found that the depreciation had not been allowed in the assessment on truck No. 127 even though the particulars were available on the file. THE Income-tax Officer, therefore, allowed depreciation of Rs. 16,170 on that truck and redetermined the taxable income of Ihe asses-see at Rs. 2,900. Aggrieved by the order of rectification of the Income-tax Officer by which he allowed depreciation in respect of the truck which he did not claim in his return, the assessee appealed to the Appellate Assistant Commissioner of Income-tax. THE case of the assessee before the Appellate Assistant Commissioner was that no depreciation having been claimed by him in his return in respect of the truck in question, the Income-tax Officer had no power to rectify the assessment order under Section 154 of the Act and grant the same. It was also contended by the assessee that the rectification having been made without affording an opportunity to the assessee as contemplated by Section 154 of the Act, the order of rectification was illegal. THE Appellate Assistant Commissioner accepted the latter contention of the assessee and held that the order of the Income-tax Officer was illegal because it had the effect of increasing the liability of the assessee in the next assessment year, viz., assessment year 197G-77, and hence it could not have been passed without issuing any notice to the assessee of his intention to do so and allowing the assessee a reasonable opportunity of being heard. THE Appellate Assistant Commissioner, therefore, set aside the order of rectification of the Income-tax Officer under Section 154 of the Act. THE Revenue appealed to the Tribunal. THE Tribunal was of the view that the question of grant of depreciation in a case where the assessee does not claim the same was a debatable point and, that being so, the power under Section 154 of the Act could not have been exercised by the Income-tax Officer. THE Tribunal, therefore, upheld the order of the Appellate Assistant Commissioner, though on a different ground. Aggrieved by the above order of the Tribunal, the Revenue applied for reference of the question of law set out in question No. 1 above to this court for opinion. THE Tribunal has, accordingly, referred question No. 1 to this court for opinion.

(3.) WE have given our careful consideration to the questions referred to us. Section 154 of the Act provides for rectification of mistake apparent from the record. The power under Section 154 of the Act, therefore, can be exercised only if there is a mistake in the order and the mistake is apparent from the record. Law is well settled that only a glaring and obvious mistake of law can be corrected under Section 154 of the Act. A decision on a debatable point of law cannot be corrected by way of rectification. If the rectification was made at a time when the issue was debatable, it cannot be supported by reference to the Supreme Court's decision settling the issue which is rendered after the rectification.