Law:

Section:

Granting benefit to an assessee in ignorance of a statutory requirement is a mistake attracting rigour of section 154 Section 154, read with section 80HHA, of the Income-tax Act, 1961 - Rectification of mistakes - Apparent from record - Assessment year 1992-93 - Whether granting benefit to an assessee in ignorance of a statutory requirement is a mistake attracting rigour of section 154 - Held, yes - Whether in order to claim any benefit under section 80HHA, it is necessary for assessee to prove conditions specified in Explanation appended to said section, which involves inquiry and scrutiny of papers submitted by assessee and in absence of any such inquiry and satisfaction of proof, no benefit can be granted and if granted, it has to be recalled either by Appellate Court or Commissioner under section 263 or by taking recourse to provisions of section 154 or 254 - Held, yes - Whether a mistake once committed cannot be allowed to be repeated for next year, rather it needs to be rectified even in respect of year in which it was granted - Held, yes Circulars and notifications - Notification No. SO 1953, dated 23-6-1992 FACTS The assessee-company, engaged in the business of manufacture and sale of industrial gas, claimed deduction under section 80HHA. The Assessing Officer declined to grant that deduction and rejected the claim. On appeal, the Commissioner (Appeals), on finding that in the earlier years the benefit was granted to the assessee, allowed the appeal and granted benefit to the assessee for the relevant assessment year. The Assessing Officer filed an application under section 154 and contended that assessee had not fulfilled the requirement of Explanation (ii) to section 80HHA. According to the Assessing Officer, the Commissioner (Appeals) while granting the benefit under section 80HHA did not record any factual finding as contemplated byExplanation (ii) nor took note of its requirement, hence, it amounted to an error apparent on the face of order within the meaning of section 154. The Commissioner (Appeals) allowed the application under section 154 and as a result, the benefit granted under section 80HHA was withdrawn. On appeal, the Tribunal upheld the…

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