Delhi High Court
Commissioner Of Income Tax vs Mechanical Movements (P) Ltd. on 4 August, 1993
Author: B.N. Kirpal
Bench: B.N. Kirpal
ORDER
The Court
1. The petitioner seeks reference of the following question of law to this Court "Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that provisions of s. 154 cannot be invoked for rectifying an apparent mistake of not disallowing the outstanding of sales-tax under s. 43B of the IT Act, 1961 ?"
2. In the instant case, the ITO had allowed the plea of the assessed for deduction of sales-tax liability. Subsequently the ITO passed an order on 12th Nov., 1987 under s. 154 of the Act purported to rectify the original assessment order. By this order the ITO came to the conclusion that in view of the provisions of s. 43B of the IT Act, 1961, the assessed was not entitled to claim deduction. We are informed by the counsel for the petitioner that for the previous year relevant to the asst. yr. 1985-86, the payment of sales-tax was actually made and deduction for the asst. yr. 1985- 86 had been allowed.
3. The assessed filed an appeal against the aforesaid order passed under s. 154 of the Act but the CIT(A) dismissed the same. Second appeal was filed and it was contended that the question whether s. 43B was applicable was not so debatable question of law and, therefore, the order could not be passed under s. 154 of the Act. This contention was accepted by the Tribunal and it observed that the Cuttack Bench of the Tribunal as well as Patna High Court had come to the conclusion that the provisions of s. 43B in the case like the present would not be attracted though this High Court in the case of Sanghi Motors vs. Union of India (1991) 187 ITR 703 (Del) and Escorts Ltd. vs. Union of India (1991) 189 ITR 81 (Del) had held in favor of the Department. This shows that as there were more than two opinions, the provisions of s. 154 of the Act, therefore, could not have been invoked.
4. Application under s. 256(1) having been rejected, the present petition has been filed.
5. It is contended by the learned counsel for the petitioner that the assessed will get a double benefit because for the asst. yr. 1985-86 disallowance has already been granted. This case pertains to the asst. yr. 1984-85 and the question which arises is whether the ITO could have invoked the provisions of s. 154 of the Act and revoked the order of assessment. The fact that in the subsequent year this amount has been allowed as a deduction it is, to our mind, irrelevant for the purpose of considering whether the ITO could invoke the jurisdiction under s. 154 of the Act.
6. It is now well settled by the decision of the Supreme Court in the case of T.S. Balaram, ITO vs. Volkart Brothers that when disputed question of law arises, provisions of s. 154 of the Act cannot be invoked. It cannot be said that there is a mistake apparent on the face of the record which can be corrected under s. 154 of the Act if conclusion has to be arrived at after considering a question of law regarding which more than one opinion is possible. In view of the aforesaid decision of the Supreme Court in the case of Volkart Brothers (supra) and the conclusion of the Tribunal, which are correct, the question which is sought to be raised by the petitioner is purely academic and the answer to the same is in the negative. For the reasons stated above, the petition is dismissed. There will be no order as to costs.