Suhas chandra sen, J. - (1.) THE Tribunal has referred the following questions of law under s. 256(1) of the IT Act, 1961 to this Court: "(1) whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that non-allowance of carry forward of the assessed loss was a mistake apparent from the record within the meaning of s. 154 of the IT Act ? (2) Whether, on the facts and in the circumstance of the case, the Tribunal was justified in law in holding that the assessee was entitled to the benefit of carry forward of the loss although its return was filed beyond the time allowed under s. 139(1)/139(3) of the IT Act ?"
(2.) IN this proceeding the assessment year involved is 1977-78. The facts found by the Tribunal have been narrated in the statement of case, which are as under : "The assessee is a private limited company. The assessee filed a petition dt. 6th Aug., 1981 under s. 154 of the Act and claimed that the assessee should be allowed the benefit of carry forward of loss of Rs. 45,419. The assessee stated that Form No. 6 was filed seeking time upto September, 1977. The return was filed on 19th Sept., 1977. The time was allowed by the ITO upto 15th Aug., 1977 and the intimation was saved upon the assessee on 2nd Aug., 1977. The ITO, therefore, was of the opinion that the return was not filed in time and hence the loss could not have been carried forward to the subsequent year. He rejected the petition of the assessee under s. 154 of the Act." On appeal the CIT(A) accepted the contention of the assessee and held that "the ITO's non- carry forward of loss is a mistake apparent from the record. Such a mistake can be rectified under s. 154. The ITO is directed to accept the assessee's application for rectification under s. 154 and thereby allow the carry forward of the loss claimed by the assessee." On further appeal the Tribunal held that "the assessee has claimed the benefit of carry forward of loss under s. 154 of the Act. The mistake, legal or factual, can be rectified under s. 154 provided the same is apparent and glaring. First the assessee sought time upto September, 1977 and the time was granted by the ITO only upto 15th Aug., 1977 and the same was duly intimated to the assessee. The return was filed on 19th Sept., 1977. As such it could not be said that the return was filed by the assessee within the extended period. However, the assessee's case is that the return was filed under s. 139(4) and, therefore, the assessee was entitled to the benefit of carry forward of loss. The Hon'ble Calcutta High Court in Presidency Medical Centre vs. CIT (1977) 108 ITR 838 (Cal) decided the issue in favour of the assessee. The decision of the Calcutta High Court is binding and the law pronounced by the Hon'ble High Court is applicable to all the cases unless the same is reversed by the superior Court. Therefore, the officers working under the jurisdiction of the Hon'ble Calcutta High Court are bound to follow the law laid down by them. If the matter is considered from this angle, there was a legal mistake in the order of the ITO. The mistake was glaring in view of the decision in (1977) 108 ITR 838 (Cal) (supra). Under the circumstances, the CIT(A) was correct in allowing the benefit of carry forward of loss to the assessee."
(3.) IT is well settled that an obvious glaring mistake can be corrected under the provisions of s. 154 of the IT Act, 1961. In the instant case the point of law in dispute was settled by a judgment of this Court. IT was not the case of the Department that the judgment was under appeal or that the judgment had been set aside or that even a contrary view had been taken in some other case on this point. The Department was bound to apply the principles of law laid down by the Calcutta High Court. Since the point of law had already been decided by the Calcutta High Court the ITO had to follow the law laid down by this Court. If that was not done then an obvious and glaring mistake of law had been committed. Such mistake can be rectified under s. 154 of the Act. Therefore, question No. 1 is answered in the affirmative and in favour of the assessee. Question No. 2 is concluded by a judgment of this Court in the case of Presidency Medical Centre (P) Ltd. vs. CIT (supra). Question No. 2 is answered in the affirmative and in favour of the assessee. There will be no order as to costs.;