- (1.) This reference has been made at the instance of revenue by the Income-tax Appellate Tribunal, Chandigarh in pursuance of order of this Court dated 16-9-2003 in ITC No. 9 of 1998. The referred question has arisen from theorder of the Tribunal dated 13-12-1996 in ITA No. 314/Chd./ 1991 for the assessment year 1985-86 and is as under: Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that provisions of Section 154 are not applicable to rectify the mistake of law and that provisions of Section 80VVA are not applicable
(2.) Assessment of the Assessee for the assessment year 1985-86 was completed on 29-3-1988. There after, the Assessee sought rectification under Section 154 of the Act to claim depreciation. The application was allowed vide order dated 30-6-1988 and in come was recomputed on that basis. Thereafter, the Assessing Officer noticed that while recomputing the income, provision of Section 80VVA was overlooked and deduction allowed was in excess of limit stipulated in the said provision. Accordingly, notice dated 28-8-1989 was issued. The objection of the Assessee was that the said provision stood omitted with effect from 1-4-1988 and the issue being debatable, was outside the scope of Section 154 of the Act. On merits, it could not be disputed that deductions allowed were beyond the specified limit. The Assessing Officer rejected the objection and allowed the rectification as per the statutory limit. On appeal, the CIT(A) set aside the order of the Assessing Officer on the ground that the rectification did not relate to a 'mistake apparent on record', as is required for invoking Section 154 of the Act and was on a debatable issue and was thus, not permissible in view of law laid down by the Hon'ble Supreme Court in T.S. Balaram, ITO v. Volkart Bros., 1971 82 ITR 50.
(3.) The findings recorded by the Assessing Officer, CIT(A) and the Tribunal on the issue are as under: 2. Finding of the Assessing Officer.-The second objection by the Assessee is that the provisions of Section 80VVA were brought on the statute book by the Finance Act, 1983 with effect from 1-4-1984 therefore, all deductions admissible under the Act which were brought forward in a particular case on 1-4-1984 for setting off and which deduction pertained to any year upto assessment years 1983-84, are admissible without any limit thereon, to determine the total income in respect of assessment years 1984-85 to 1987-88, notwithstanding the fact that the provisions of Section 80VVA had been introduced with effect from 1-4-1984. The contention of the Assessee is clearly ill-conceived since if that were the interpretation and scope of Section 80VVA, the very existence of Section 80VVA is negated. In fact, the provisions of Section 80VVA were introduced only with a view to bring those companies within the tax brackets which were thenceforth avoiding the payment of taxes by reasons of claims under chapter VIA. Therefore, restriction imposed by Section 80VVA were applicable even in respect of the deductions brought forward from earlier assessment years. Finding of the CIT(A).-The succeeding Assessing Officer passed this order under Section 154 withdrawing the claim previously allowed, thereby entertaining another interpretation of the provisions of Section 80VVA. The mistake apparent on record which could be rectified by invoking provision of Section 154, must be an obvious and patent mistake and not something which can be established by along-drawn process of reasoning on points on which there may be conceivably two opinions. Thus a decision on a debatable point of law is not a mistake apparent on record which has been clearly laid down by the Hon'ble Supreme Court in the case of T.S. Balaram, ITO v. Volkart Brothers cited . 7. Finding of the Tribunal-We have considered the rival submissions. Section 154 of the Income-tax Act, 1961 empowers the ITO to amend any order passed by him under the provisions of the Act to rectify any mistake apparent from the record either suo motu or on an application. The jurisdiction of the Assessing Officer to amend his order thus depends on whether or not there is a mistake apparent from the record. If, in his order, there is no mistake which is patent and obvious on the face of the record, the exercise of the jurisdiction by the Assessing Officer under Section 154 will be illegal and improper. Section 154 does not empower an Assessing Officer to review the order passed by the predecessor Assessing Officer because the normal rule is the remedy by way of review is a creature of the statute and unless clothed with such power by the statute, no authority can exercise the power. From the order passed by the Assessing Officer as well as the first appellate authority, it is clear that the DCIT, Spl. Range, Chandigarh had passed an order under Section 154 on 30-6-1988 in which the Assessee company was given benefit of brought forward of investment allowance, depreciation etc., for earlier years. This benefit was allowed after due consideration by the Id. DCIT, Spl. Range, Chandigarh and thereafter the case was transferred to the Asstt. Commissioner, Central Circle, Chandigarh, who passed an order under Section 154 on 21-3-1990 and applied the provisions of Section 80VVA in respect of the brought forward investment allowance etc., by observing that "the provisions of Section 80VVA were not applied at the time of giving benefit of brought forward investment allowance for 1981-82.;