Law:

Section:

Section 154 of the Income-tax Act, 1961 - Rectification of Mistake - Apparent from record - Assessee, a state warehousing corporation, did not make claim for exemption of its income derived from warehousing under section 83 [now section 10(29)] before ITO or AAC - Later it moved an application under section 154 for claiming such exemption - All material for purposes of determining the question was before ITO and in subsequent assessment year assessee had been allowed exemption - Whether assessee's assessment had to be rectified under section 154 to allow it exemption claimed - Held, on facts, yes Facts The assessee, a State Warehousing Corporation, did not claim exemption under section 83 [now section 10(29)] in the original assessment nor in its appeal before the AAC. Subsequently, the assessee made an application under section 154 claiming that its income was exempt from taxation under section 83, but the ITO rejected the application holding that since the claim for exemption was not made in the course of assessment or even before the AAC, the claim for exemption could not be considered in an application made under section 154. On appeal, the AAC upheld the assessee's claim. On appeal by the revenue, the Tribunal held that apart from the receipt of Rs. 5,72,323 from warehousing charges, there were other receipts which could not be said to be obviously for the letting of godowns, etc., in respect of which exemption would automatically be available under section 83 without the possibility of any dispute or difference of opinion on this point and as such the assessee's application under section 154 could not be entertained. On reference: Held In the instant case, it was undisputed that the assessee was warehousing corporation established by the State of West Bengal and performed the functions under the Warehousing Corporation Act, 1962. Again from the record it appeared that for all the subsequent years the exemption was allowed to the assessee. It was true that the records of the subsequent years might not be relevant for determining the question for the relevant assessment year, but the same would show that there was no dispute that the assessee was entitled…

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