May 2008
S. 154 r.w. S. 43B: Relief entitled can not be denied merely because omitted by mistake
By C. N. Vaze, Shailesh Kamdar, Chartered Accountants
Reading Time 2 mins
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6 (2007) 109 TTJ (Jp.) 794
Lustre Tiles Ltd. v. Addl. CIT
ITA No. 489 (Jp.) 2003
A.Y. 1995-96. Dated : 28-7-2006
S. 154 read with S. 43B of the Income-tax Act, 1961 — If on
the basis of material on record, the assessee is entitled to a relief which has
remained to be allowed, then it would constitute mistake apparent from record
and, consequently, such relief cannot be denied merely because the assessee, by
oversight, had omitted to make the claim.
The assessee’s application for rectification u/s.154 for
allowing claim u/s.43B was rejected by the Assessing Officer and the CIT(A), on
the ground that no such claim was made in the return of income, nor in
subsequent proceedings.
The Tribunal allowed the assessee’s claim and observed as
under :
(1) In a Note in Schedule 1 to the balance sheet, it has
been clearly mentioned in the balance sheet that Rs.53 lacs being interest on
the term loan has been converted into equity shares of equal value.
(2) CBDT Circular No. 669, dated 25th October 1993,
allowing entertainment of rectification application in such matters, is
binding on the Department.
(3) ‘Record’ for purposes of S. 154 would include all
documents available at the time of passing of order subjected to rectification
proceedings and the claim was clearly reflected in the Note appended to
Schedule 1 of the balance sheet.
(4) The Supreme Court in the case of Anchor Pressings P.
Ltd. v. CIT, (1986) 58 CTR 126 held that the jurisdiction u/s.154 to
rectify a mistake is very wide and relief could be allowed in the
rectification proceedings if all factual materials necessary for allowing the
relief were available on record and such relief could not be denied merely
because the assessee had omitted to claim the same.
The Tribunal relied on the following further decisions :
(1) CIT v. K. N. Oil Industries, (1982) 30 CTR (MP)
137; (1983) 142 ITR 13 (MP)
(2) West Bengal Warehousing Corpn. v. CIT, (1986) 54
CTR (Cal.) 21; (1986) 157 ITR 149 (Cal.)
(3) CIT v. Smt. Aruna Luthra, (2001) 170 CTR (P&H) (FB)
73; (2001) 252 ITR 76 (P&H) (FB)
