D.K.Sen, J. - (1.) Pilani Investment Corporation Ltd., the assessee, was assessed to income-tax for the assessment years 1966-67 and 1967-68. During the said assessment years, the assessee had income from dividend. The Income-tax Officer allowed relief under Section 85A of the Income-tax Act, 1961 (" the Act "), as it then stood, not on the gross dividend income but on the net dividend income after ascertaining the same by deducting from the gross dividend proportionate expenditure and bank interest which was relatahle to the earning of such dividend income : The assessee thereafter applied before the Income-tax Officer under Section 154 of the Act for rectification of the assessments claiming allowance of the relief under Section 85A on the gross dividend. The Income-tax Officer rejected the said application of the assessee holding that the relief under Section 85A had been granted according to law and there is no mistake apparent from the records.
(2.) Aggrieved by the order of the Income-tax Officer, the assessee preferred appeal from the same before the Appellate Assistant Commissioner. Before the Appellate Assistant Commissioner, the assessee relied on the decision of this court in the case of CIT v. Darbhanga Marketing Co. Ltd. [1971] 80 ITR 72. The Appellate Assistant Commissioner noted that there was a conflicting judgment of the Gujarat High Court in Addl. CIT v. Cloth Traders (P.) Ltd. [1974] 97 ITR 140. It was held that as the issue was debatable, the alleged mistake in the original assessment could not be considered to be a mistake apparent from records and the same could not be rectified under Section 154. The Appellate Assistant Commissioner upheld the assessment of the Income-tax Officer.
(3.) Being aggrieved, the assessee went up in further appeal before the Tribunal. It was held by the Tribunal that in Darbhanga Marketing Co. Lld.'s case the High Court had occasion only to interpret Section 99(1)(iv) of the Act. The Gujarat High Court in Cloth Traders (P.) Ltd.'s case [1974] 97 ITR 140, had specifically considered Section 85A and had held that relief under the said section could be allowed only on the net dividend income. The Tribunal held that the case of the assessee could not be supported by the decision in Darbhanga Marketing Co, Ltd.'s case in any manner and that the Income-tax Officer was justified in rejecting the assessee's prayer for rectification of the assessment by reason of the principles laid down in Cloth Traders (P.) Ltd.'s case [1974] 97 ITR 340 (Guj). The Tribunal upheld the orders of the Income-tax Officer and the Appellate Assistant Commissioner but for reasons different from those of the Appellate Assistant Commissioner. The Tribunal specifically held that Section 85A contemplated relief only on the net dividend income and not on the gross dividend income and, therefore, there was no mistake in the orders of assessment which could be rectified.;