Law:

Section:

Section 154, read with section 139, of the Income-tax Act, 1961 - Rectification of mistakes - Apparent from records - Assessment years 1962-63 to 1967-68 - Assessee filed application under section 154 seeking rectification of demand notices which included certain amounts by way of interest for delay in filing return on ground that these was no indication in assessment order that assessee was liable to be charged to interest for delay in filing return - Assessee had not applied for extension of time - Question as to whether where assessee had not applied for extension of time for filing return, interest under section 139(1) could be charged or not, was debatable issue in view of difference of opinion between various High Courts - Whether since issue was debatable, it could not be said that there was error apparent from record and, therefore, matter of charging interest under section 139(1) did not come within purview of section 154 - Held, yes FACTS For the assessment years in question, the assessee filed his return of income on 25-6-1968. For all these years, a consolidated assessment order was passed on 13-3-1969. In the normal course, the assessee received demand notices for each assessment year. The demand notices included certain amounts charged by way of interest for the delay in filing the return. The assessee filed an application for rectification under section 154, on the ground that in the assessment order, there was no indication that the assessee was liable to be charged interest for the delay in filing the return, and consequently the inclusion of any amount under this head in the demand notice was an error apparent from the record, and liable to rectification. The ITO, however, repelled the contention and rejected the application. The AAC allowed the appeal holding that as the assessee had not applied for extension of time, the ITO had no jurisdiction to charge interest. The Tribunal held that on the question as to whether interest was chargeable under the third provision of section 139(1) in case the assessee had not applied for extension of time, there was serious difference of opinion between the various High Courts and thus it was a debatable…

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