Ajit Kumar Sengupta, J. - (1.) This is a reference under Section 256(1) of the Income-tax Act, 1961, for the assessment year 1967-68. For that year, the assessee, the West Bengal State Warehousing Corporation, filed a return showing a total income of Rs. 92,578 and the assessment was made on a total income of Rs. 9,17,117. An appeal was preferred against the said assessment and the Appellate Assistant Commissioner partly allowed the appeal by an order dated May 19, 1972.
(2.) On October 1, 1973, the assessee made an application under Section 154 of the Income-tax Act, 1961, claiming amongst other matters that the income of the assessee was exempt from taxation. By an order dated November 2, 1973, the Income-tax Officer rejected the application holding that since the claim for exemption was not made in the course of assessment or even before the Appellate Assistant Commissioner, the claim for exemption cannot be considered.
(3.) The assessee came before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner by his order dated October 3, 1974, accepted the contention of the assessee by holding that there is a glaring and obvious mistake of law in this case as the income of the assessee from warehousing was exempt.;