J U D G M E N T v. Cit, Reported In(2002) 258 Itr 770

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED :: 31-01-2007 CORAM THE HONOURABLE MR.JUSTICE P.D.DINAKARANANDTHE HONOURABLE MRS.JUSTICE CHITRA VENKATARAMAN TAX CASE (APPEAL) No.144 OF 2003 Commissioner of Income Tax,Chennai....Appellant-vs- M/s.TTK Pharma Limited,Chennai. ...Respondent Appeal against the order of the Income Tax Appellate Tribunal,Madras 'B' Bench, dated 18.03.2003, in ITA No.718/Mds/1995 against ITAppeal No. 197/94-95 dated 6.2.95 on the file of the Commissioner ofincome Tax (A) I Madras-34 against PAN/GIR.No 47-oo40cZ-6934/11-T on thefile of the Deputy Commissioner of Income tax Special Range III, Madras-34. For appellant : Mr.J.NarayanaswamyFor respondent : Mr.R.Vijayaraghavan for M/s.Subbaraya Ayyar J U D G M E N T (Judgment of the Court was delivered by CHITRA VENKATARAMAN,J.) This appeal is by the revenue, challenging the order of theTribunal, rejecting the plea on question of rectification, on the basis ofthe decision of the Supreme Court delivered subsequently in KarnatakaSmall Scale Industries Development Corporation Ltd. v. CIT, reported in(2002) 258 ITR 770. 2. This appeal relates to the assessment year 1989-90. Thetotal income of the assessee was assessed under Section 115 J of theIncome Tax Act, finding that the correct loss was to be assessed atRs.16,02,388/- as against the relief granted at Rs.41,71,492/-, theAssessing Authority issued notice under Section 154 of the Act, to pass anorder thereby rectifying the error pertaining to the loss carried forward.The order passed was set aside originally in appeal, directing a remand togive a reasonable opportunity to the assessee to state its objection.Thereafter, the Officer passed an order once again to hold that the https://hcservices.ecourts.gov.in/hcservices/ assessee was not entitled to carry forward the amounts assessed underSection 115 J for set off for the subsequent years and hence the amount ofRs.21.00 lakhs and odd alone would be carried forward as unabsorbeddepreciation to be set off in the subsequent years. The first appellateauthority came to the conclusion that the view of the assessing authoritywas justified by the provisions of Section 115 J, sub-section (2) and,consequently, it confirmed the order of the authority. 3. On appeal by the assessee, the Tribunal noted that admittedlyAssessing Officer in his original assessment allowed a sum ofRs.25,77,404/- being the amount of loss to be carried forward that in theproceedings under Section 154, the assessing authority sought to withdrawthe benefit. Noting the fact that the judgment of the Supreme Court on theissue was settled only in the year 2002 reported in 258 ITR 770, and hencesaw a debatable issue on it when 154 proceedings were taken, the Tribunalrejected the stand of the revenue on the question of jurisdiction only, touphold the claim of the assessee. Aggrieved of this, the revenue is onappeal before this Court. 4. It may be seen that the proceedings for rectification wasmade as early as 1993. Admittedly, on the date when the proceedings weretaken, the views of the Courts in the country were not uniform. Given thescope of Section 154 that an arguable issue would not come forrectification of a mistake, the appellant herein cannot go forrectification of an error, which is arguable issue, hence, the proceedingsare totally unsustainable. 5. A perusal of Section 154 shows that the intervention or anassumption of jurisdiction under Section 154 only to correct an error wasa mistake, which was apparent and not where a debatable issue could beconsidered. Considering the admitted position that the issue itself wassettled long thereafter, the question of accepting the assumption ofjurisdiction does not arise. 5. A perusal of Section 154 shows that the intervention or anassumption of jurisdiction under Section 154 only to correct an error wasa mistake, which was apparent and not where a debatable issue could beconsidered. Considering the admitted position that the issue itself wassettled long thereafter, the question of accepting the assumption ofjurisdiction does not arise. 6. Given the scope of Section 154 and on the admitted facts, wedo not find any reason to interfere with the order of the Tribunal.Consequently, the appeal fails and the same is dismissed. No costs. dixit Sub Assistant Registrar. To 1. THE ASSISTANT REGISTRARINCOME TAX APPELLATE TRIBUNAL, CHENNAI-90. MADRAS BENCH B RAJAJI BHAVAN BESANT NAGAR, 2. THE COMMISSIONER OF INCOME TAXAPPEALS I CHENNAI -034 3. THE DEPUTY COMMISSIONER OFINCOME TAX, SPECIAL RANGE -III, MADRAS -34 4. THE COMMISSIONER OF INCOME TAXCHENNAI+ ONE CC TO MR. R. VIJAYARAGHAVAN SR NO. 5591+ ONE CC TO M/S. PUSYA SITARAMAN SENIOR STANDING COUNSEL (SR 6170)RL (co)sg 1/3/07 T.C.(A).No.144 OF 200331/01/2007