By K. B. Bhujle
Advocate
38.
Meteor Satellite Pvt. Ltd. vs. ITO; 408 ITR 99 (Guj): Date of order: 16th April, 2018 A. Y. 2010-11
Sections 115JB and 254 Rectification of
mistake – Tribunal accepting that assessee’s book profits to be computed after
giving effect to deduction u/s. 54EC – AO passing order giving effect to
directions issued by Tribunal – Notice of rectification issued thereafter on
ground that deduction u/s. 54EC wrongly allowed – Not permissible Notice
quashed
For the A. Y.
2010-11, the Tribunal accepted the assessee’s contention and held that the
assessee’s profits ought to be computed u/s. 115JB of the Act after carrying
out deduction u/s. 54EC. The Assessing Officer gave effect to the order and
recomputed the assessee’s book profits according to the directions of the
Tribunal and passed an order. Subsequently, he issued a notice u/s. 154 of the Act
to rectify the order passed by him for giving effect to the order of the
Tribunal on the ground that the book profits of the assessee had been wrongly
computed by allowing deduction u/s. 54EC in contravention of the law for
determining the book profits and that rectification of the order was to be
carried out.
The assessee filed
a writ petition and challenged the validity of the notice. The Gujarat High
Court allowed the writ petition and held as under:
“i) There was no error in the Assessing
Officer’s order implementing the Tribunal’s directions. The Tribunal had
directed the Assessing Officer to compute the assessee’s book profits in a
particular manner which was correctly understood and given effect by him.
ii) He had proposed to rectify his order giving
effect to the Tribunal’s decision on the ground that there had been an apparent error. However, as long as the
order of the Tribunal stood, the assessment order was required to be
implemented. Further, having implemented the order, it was not open for him to
exercise power of rectification which was meant for correcting any error
apparent on record.”
