Commissioner Of Income Taxchennai v. M/S. Ambatture Clothing Ltd.86-E/2, Industrial Estateambattur, Chennai 600 058

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 02.08.2010 CORAM :- THE HON'BLE MR.JUSTICE F.M.IBRAHIM KALIFULLAANDTHE HON'BLE MR.JUSTICE M.M.SUNDRESH TAX CASE (APPEAL) NO.695 OF 2010 Commissioner of Income TaxChennai. .. Appellant vs. M/s. Ambatture Clothing Ltd.86-E/2, Industrial EstateAmbattur, Chennai 600 058. .. Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act,1961, against the order of the Income Tax Appellate Tribunal, Madras'A' Bench, dated 18.12.2009 passed in I.T.A.No.1363/Mds/2008 againstthe order dated 31.03.2008 on the file of Commissioner of Income Tax(A) VIII Chennai passed in ITA.No.59/2007-08, against the order dated11.06.2007 on the file of the Assistant Commissioner of Income TaxCompany Circle-I (1) Chennai passed in G.I.R.No.AX1-091, 2003-2004. For Appellant : Mr.K.Subramanian Sr. Standing Counsel for Income-taxFor Respondent : Mr.R.Venkatanarayan for M/s.Subbaraya Aiyar Padmanabhan Judgment (Judgment of the Court was delivered by F.M.IBRAHIM KALIFULLA,J.) The Revenue has come forward with this appeal challenging theorder of the Tribunal dated 18.12.2009 passed in ITA.No.1363 of 2008.The assessment year pertains to 2003-04. The issue arose out ofrectification order passed by the Assessing Authority by order dated11.06.2007 invoking his power under Section 154 of the Income-taxAct. 2. According to the Assessing Authority, the assessee, which isan export concern, claimed the benefits under Section 10A/10B of theAct, apart from claiming deduction under Section 80HHC of the Act,for the remaining 10% of the profits, which was to suffer tax, after https://hcservices.ecourts.gov.in/hcservices/ applying Section 10A/10B of the Act. According to the AssessingAuthority, such a claim made under Section 80HHC in respect of theremaining 10% of the profits amounted to a claim of double deduction,which was not permissible. On the said basis, the AssessingAuthority took the view that the said issue was an apparent mistakeon the face of the record, which he rectified by passing his orderdated 11.06.2007. 3. The Commissioner of Income-tax (Appeals) having partlyallowed the appeal, the respondent approached the Tribunal. TheTribunal held that such a claim made under Section 80HHC of the Actfor the remaining 10% of the profits cannot be held to be a mistakeapparent on the face of the record, inasmuch as the view taken by theAssessing Authority in the assessment order was a possible view. Inother words, the Tribunal held that it cannot be said that there wasany error apparent on the face of the record in order to invokeSection 154 of the Act and by passing a rectification order,virtually passed an order of review of Assessing Authority's originalorder of assessment. 4. When we examine the issue raised in this appeal, at the veryoutset, it will have to be pointed out that even under Section 10A(6)(iii) of the Act, there is a specific provision, which reads as under:"No deduction shall be allowed under section 80HHor section 80HHA or section 80-I or section 80-IA orsection 80-IB in relation to the profits and gains ofthe undertaking; and" 4. When we examine the issue raised in this appeal, at the veryoutset, it will have to be pointed out that even under Section 10A(6)(iii) of the Act, there is a specific provision, which reads as under:"No deduction shall be allowed under section 80HHor section 80HHA or section 80-I or section 80-IA orsection 80-IB in relation to the profits and gains ofthe undertaking; and" 5. The very statutory provision prescribing a prohibition inrespect of the deductions in relation to the profits and gainsitself, has not specifically included Section 80HHC. Apparently, ittherefore would only mean that there was no prohibition for claimingany deduction under Section 80HHC while applying the benefitsprovided under Section 10A of the Act. If that is the statutoryprescription, by which the assessee was entitled to claim a benefitunder Section 80HHC in relation to the profits and gains whileinvoking Section 10A, it will have to be concluded that theassessment order in having allowed such a deduction of the remaining10% of the profits earned by the assessee, was not erroneous. In anyevent, having regard to such a statutory prescription available forthe assessee to claim the benefit under Section 80HHC in respect ofthe profits earned from Section 10A of the Act, there is absolutelyno scope for the Assessing Authority to have invoked Section 154 ofthe Act, in order to state that, that can be considered as an errorapparent, inasmuch as, there was no error at all, much less, apparenterror to be rectified by the Assessing Authority. 6. This conclusion of ours is apart from the conclusion of theTribunal in having held that in that situation what was held by theAssessing Authority in the original assessment order was a possible https://hcservices.ecourts.gov.in/hcservices/ view and that cannot be considered as an error apparent on the faceof the records. 7. We, therefore, do not find any scope to entertain thisappeal, inasmuch as we do not find any question of law, much lesssubstantial question of law. This appeal fails and the same isdismissed. No costs. Sd/Asst.Registrar /true copy/Sub Asst.RegistrarATRTo1. The Secretary Central Board of Direct Taxes New Delhi.2. The Assistant Registrar, Income-Tax Appellate Tribunal Rajaji Bhavan, III Floor, Besant Nagar, Madras 'A' Bench Madras.90.3. The Commissioner of Income Tax (Appeals)-VIII No.121, M.G.Road, Chennai 600034.4. The Assistant Commissioner of Income Tax Company Circle-I(1), Chennai.1 cc To Mr.K.Subramanian, Advocate, SR.56271.1 cc To Mr.R.Venkatanarayanan, Advocate, SR.56137. TC (A) No.695 of 2010 BS(CO)RVL 11.08.2010