Law:

Section:

Section 154, read with section 80HHC, of the Income-tax Act, 1961 - Rectification of mistakes - Apparent from records - Assessment year 1995-96 - For assessment year 1995-96, Assessing Officer granted deduction under section 80HHC without adjusting loss from export of trading goods - Subsequently, Assessing Officer rectified said order under section 154 on basis of assessment order for subsequent year and adjusted loss suffered from export of trading goods against deduction admissible under section 80HHC - Whether, on facts, there was any error in jurisdiction exercised by Assessing Officer under section 154 - Held, no FACTS For the assessment year 1995-96, the Assessing Officer allowed the deduction under section 80HHC without adjusting loss from the export of trading goods. Subsequently, the Assessing Officer issued notices for rectification of mistakes under section 154 by indicating error in calculation. Thereafter, the Assessing Officer, on the basis of assessment order for subsequent year, rectified the said mistake by adjusting loss suffered from export of trading goods against deduction admissible under section 80HHC. On appeal, the Tribunal held that the Assessing Officer was not justified in exercising the power under section 154 adjusting the loss suffered from the export of the trading goods against the deduction admissible under section 80HHC. On revenue's appeal : HELD If mistake is apparent from the record, the same can be corrected subject to other requirements such as limitation, etc. [Para 12] In the instant case, as was evident from the record, the Assessing Officer noticed the mistake apparent from the record on the basis of the assessment order for the subsequent year. Even the case of the assessee in the reply to notice under section 154 was not that the issue sought to be raised was debatable and there was divergence of judicial opinion on the same expressed by different High Courts. There was no error in jurisdiction exercised by the authority under section 154 in the facts and circumstances of instant case. [Para 15] Therefore, the Assessing Officer was justified in exercising the power under section 154 adjusting loss suffered from…

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