Law:

Section:

Section 154 of the Income-tax Act, 1961 - Rectification of mistakes - Apparent from records - Assessment year 1987-88 - Assessing Officer withdrew benefit of investment allowance granted to assessee by taking recourse to section 154 - Dy. Commissioner (Appeals) and Tribunal set aside order of Assessing Officer - On reference, revenue contended that once same issue was decided by Supreme Court in CIT v. N.C. Budharaja & Co. [1993] 204 ITR 412/ 70 Taxman 312 against an assessee, action on part of Assessing Officer in invoking section 154 rectifying mistake in wrongly granting benefit to assessee in original assessment order could always be withdrawn - Whether either on date of granting benefit or on date when same was withdrawn by taking recourse to section 154, decision of Supreme Court in N.C. Budharaja's case (supra) had not been delivered and, therefore, Assessing Officer had not relied upon nor he could have relied upon said decision by invoking powers under section 154 seeking rectification - Held, yes - Whether in a case where issue is debatable, one cannot claim rectification on ground of an error being apparent on face of record and, therefore, Assessing Officer had no jurisdiction to invoke section 154 and rectify order of assessment thereby withdrawing benefit granted to assessee - Held, yes FACTS The assessee-firm was engaged in the business of drilling tube well. The assessee claimed investment allowance on drilling machine which was allowed by the Assessing Officer by his order dated 31-03-1989. However, the Assessing Officer by his order dated 19-10-1992, withdrew the benefit of investment allowance by taking recourse to section 154. On appeal, the Dy. Commissioner (Appeals) set aside the order of the Assessing Officer. On further appeal, the Tribunal upheld the order of the Dy. Commissioner (Appeals). On reference, the revenue contended that once the same issue was decided by the Supreme Court in N.C. Budharaja's case (supra) against an assessee, the action on the part of the Assessing Officer in invoking section 154 rectifying the mistake in wrongly granting the benefit to assessee in the original assessment order could always be withdrawn.…

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