Law:

Section:

Section 154, read with section 141A [omitted with effect from 1-4-1989] of the Income-tax Act, 1961 - Rectification of mistakes - Apparent from record - Assessment year 1963-64 - Whether question of assessee's entitlement to rebate under section 141A on payment of tax made prior to 1-1-1964, is a debatable one - Held, yes - Whether assessee can claim said relief by invoking provisions of section 154 - Held, no FACTS For the assessment year 1963-64, the assessee filed its return prior to 31-12-1963. A provisional assessment was made by the ITO whereupon 50 per cent of the demand raised was paid by the assessee on 20-11-1963, and the balance amount was paid in two instalments, as agreed to by the department, on 21-1-1964 and 22-2-1964. The ITO charged interest at the rate of 2 per cent on 50 per cent of the demand paid after 1-1-1964. After the regular assessment was made, the assessee filed an application under section 154, praying that it was entitled to a rebate of 1 per cent on 50 per cent of the tax paid before 31-12-1963, under the provisions of sub-section (1) of section 141A. The ITO rejected the assessee's application under section 154 holding that in order to be entitled to the said rebate, the assessee was required to pay the full amount of tax as quantified by the provisional assessment. The Tribunal, however, allowed the assessee's claim. On reference : HELD Section 141A was inserted for only one year, viz., 1963-64. None of the three sub-sections (1) to (3) of section 141A categorically dealt with a case where part of the tax due was paid before 31st December and part thereafter. It was by interpreting section 141A that the Tribunal had sought to give relief to the assessee. The answer to the question whether a rebate of 1 per cent was due to the assessee or not. was not easy to find from a bare reading of the section. The issue involved was not free from doubt. Under these circumstances, it was not possible to accept that an application under section 154 could be filed. In the instant case, it was open to the assessee to have filed an appeal against the assessment order. This relief could not be sought by seeking to invoke the provisions of section…

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