21. Piramal Investment Opportunities
Fund vs. ACIT; [2019]
111 taxmann.com 5 (Bom.) Date
of order: 4th September, 2019 A.Y.:
2015-16
Rectification of mistakes – Section 154 of ITA, 1961 –
Section 154(1A) places an embargo on power of rectification of assessment order in cases where matter had been considered
and decided in appeal or revision – However, there is no embargo on power of amendment if
an appeal or revision is merely pending since such pending appeal / revision
does not assume character of a subjudice matter
For the A.Y. 2015-16, the assessee had paid advance tax of Rs. 16.80
crores. In the original return, the assessee had computed total income at Rs.
65.66 crores. In the revised return the total income was computed at Nil. The
AO completed the assessment u/s 143(3) of the Income-tax Act, 1961. The
assessee filed an appeal before the Commissioner (Appeals) on the ground that
the AO did not give credit for the advance tax of Rs.16.80 crores. The assessee
also made an application u/s 154 to the AO for rectification of the mistake.
The assessee stated that by a mistake apparent on record, the credit of payment
of advance tax of Rs.16.80 crores had not been given and the assessee was
entitled to a refund. The AO rejected the rectification application stating
that the assessee did not inform that an appeal was filed on the same issue for
which rectification was sought. Since the assessee was agitating on similar
ground before the appellate authority, it was not proper on the part of the AO,
following the doctrine of judicial discipline, to adjudicate on the same issue
pending before the appellate authority; therefore, the rectification
application assumed the character of a subjudice matter.
Thereafter, the assessee filed a writ petition challenging the order of
the AO. The Bombay High Court allowed the writ petition and held as under:
‘(i) Section 154(1A) provides
that where any matter has been considered and decided in any proceeding by way
of appeal or revision, contained in any law for the time being in force, such
order shall not be amended. Section 154(1A), thus, places an embargo on the
power of rectification in cases where the matter has been considered and
decided in appeal or revision. It is of importance that the legislature has
used the phrase “considered and decided” in the past tense.
(ii) The phrase “considered
and decided” cannot be read as “pending consideration in appeal or revision”.
To do so would be adding and changing the plain language of the statute. By
modifying and adding the words in this manner, which is not permissible, the
Assistant Commissioner has divested himself of the power of amendment. In view
of the plain language of section 154, there is no embargo on the power of
amendment if an appeal or revision is merely pending.
(iii) The rejection of the
rectification application on this ground was unwarranted. The appeal is still
pending. The Assistant Commissioner has failed to exercise the jurisdiction
vested in him and, thus, the impugned order will have to be set aside and the
application will have to be decided.
(iv) The Writ Petition succeeds.
The impugned order is to be quashed and set aside. The rectification
application filed by the petitioner u/s 154 stands restored to the file of
Assistant Commissioner to be disposed of on its own merits.’
