Law:

Section:

Section 154 of Income- tax Act, 1961 - Rectification of mistake - Apparent from records Issue whether deduction of interest and salary paid to partners could be disallowed or not in a case where assessment was completed under section 144 and more particularly where such claim of deduction had specifically been allowed by Tribunal, was highly debatable issue which fell outside scope of provisions of section 154. [A.Y. 1996-97]. The assessee filed the original return of income in the status of a registered firm. However, while completing the assessment under section 144 the Assessing Officer did not allow the deduction of interest and salary paid to the partners. The Commissioner of (Appeals) partly allowed the claim of the assessee for deduction of interest and salary paid to the partners. The Tribunal upheld the order of the Commissioner (Appeals). Subsequently, the Assessing Officer noted that since the assessment was completed under section 144, the status of the firm was required to be taken as an association of persons within the meaning of sub-section (5) of section 184. The Assessing Officer observed that it was a mistake apparent from the record and he rectified it. The Tribunal quashed the rectification order. Held that in the instant case, the Assessing Officer was not competent to rectify the assessment order. At the time of completing the assessment under section 144 the Assessing Officer did not take into account the provisions of section 184(5) in a case where the assessment was made under section 144 may be for the reason that even on the merits he did not allow the deduction of interest and salary paid to the partners. Nevertheless, he completed the assessment in the status of a registered firm. Even otherwise, as per the provisions of sub-section (5) of section 184, then existing in the statute for the relevant assessment year, the Assessing Officer could assess the firm in the same manner as an association of persons as there was no specific provision for disallowing salary and interest paid to the partners. The specific provision for disallowing salary and interest paid to the partners in a case where the assessment has been completed under…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492