Decided on March 16,1982



U.T. Shah, Judicial Member - (1.) THIS is an appeal against the order of the A AC wherein he has dismissed the appeal preferred by the assessee against the order of the ITO made under Section 154 of the Income-tax Act, 1961, wherein he had refused to accede to the rectification of the mistakes pointed out by the assessee.
(2.) The assessee is a firm. The assessment year is 1975-76 and the relevant previous year is the financial year ended 30-5-1975. Inspired by the following observation made by the AAC, while disposing of the appeal for the assessment year 1976-77, The next contention of the appellant relates to the addition of Rs. 4,644 out of law charges claimed at Rs. 10,285. A sum of Rs. 1,800, which relates to the preceding year, is obviously to be disallowed and with regard to the other item debited in this account, the expenses are vouched and verifiable. The addition in this behalf will, therefore, be limited to Rs. 1,800 only and a reduction of Rs. 2,844 is allowed here. the assessee moved an application under Section 154 of the Act before the ITO, the relevant contents of which read as under- We beg to invite your kind attention to para 2 of the appellate order dated 3-8-1978 passed by the Commissioner of Income-tax (Appeals), Allahabad, for the assessment year 1976-77 wherein it was held that a sum of Rs. 1,800, out of law charges claimed in that year, obviously relates to the preceding year. Accordingly, our assessed income for assessment year 1975-76 is liable to be reduced by Rs. 1,800. Since the mistake is apparent from record, it is requested that it may be rectified under Section 154 of the 1961 Act. The ITO, however, rejected the assessee's claim with the remarks that "from the perusal of the record it appears that that is not a mistake apparent on record". In appeal, the AAC upheld the action of the ITO.
(3.) BEING aggrieved by the order of the AAC, the assessee has come up in appeal before us. Relying on the decisions of the Hon'ble Supreme Court in the cases of S. Sankappa v. ITO [1968] 68 ITR 760, Mahendra Mills Ltd. v. P.B. Desai, AAC [1975] 99 ITR 135 and Maharana Mills (P.) Ltd. v. ITO [1959] 36 ITR 350 the learned counsel for the assessee vehemently argued that the income-tax authorities ought to have accepted the assessee's application made under Section 154 of the Act. According to him, the subsequent event in the assessment year 1976-77 was sufficient for the assessee to make an application under Section 154 requesting the ITO to allow deduction of Rs. 1,800. On a query raised by us, the learned counsel for the assessee was fair enough to state that in the original assessment proceedings for the year under appeal, the assessee had neither claimed deduction of Rs. 1,800 nor had he placed any material on record in this regard. Me, however, hastened to state that this fact by itself would not prevent the assessee to request the ITO to pass a suitable order under Section 154.;

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