Law:

Section:

Section 154 of the income-tax act, 1961-Rectification of mistakes-Apparent from record-Assessee did not claim relief under section 80J for assessment year 1967-68 since there were no profits-Profit was first earned only in assessment year 1970-71 and consequently ITO allowed relief for that year and carried forward deficiencies for assessment years 1968-69 and 1969-70-In 1973, assessee applied or rectification of assessment for 1970-71 so as to allow relief for assessment year 1967-68 as well-Whether right of assessee to claim relief under section 80J first arose only in assessment year 1970-71 so that its application for rectification was not barred by limitation-Held, on facts, yes-Whether point involved was mistake apparent from record and hence rectifiable-Held, on facts, yes Facts The assessee-company fulfilled all conditions for grant of relief under section 80J in the assessment year 1967-68, but made no claim in that behalf as it had made no profits in that year. It earned profits for the first time in the assessment year 1970-71 and, in the assessment for that year, it was granted relief under section 80J for that year as well as the carried forward deficiencies for the assessment years 1968-69 and 1969-70. In 1973, the assessee applied under section 154, seeking rectification of the assessment order for the assessment year 1970-71 so as to allow the relief for the assessment year 1967-68 also. The ITO rejected the application on the ground that the assessee had made no such claim in the assessment proceedings for the assessment year 1967-68 or 1970-71. The AAC dismissed the assessee's appeal, but the Tribunal allowed it. On reference: Held It is well settled: ( i) that the right of an assessee under section 80J(3) to carry forward the deficiencies of previous years is an absolute, unqualified right not made conditional upon any computation by the ITO or any notice issued by him; (ii) that relief under section 80J must be allowed if all the conditions necessary to allow it are satisfied; and (iii) that it is incumbent upon the ITO to draw the assessee's attention to the relief allowable under section 80J even if he has omitted to specify it in the…

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