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2008] 215 CTR 315 [2008] 215 CTR 315 (RAJ.) HIGH COURT OF RAJASTHAN Commissioner of Income-tax v. Bank of Rajasthan Ltd. N.P. GUPTA AND DEO NARAYAN THANVI, JJ. IT APPEAL NOS. 47 & 48 OF 2002 AND 63 OF 2004 JANUARY 23, 2008 Section 154 of the Income-tax Act, 1961 - Rectification of mistakes - Apparent from records The assessee had adopted the mercantile system of accounting wherein the assessee had shown interest income on "accrual basis". However, in the computation of the income made for the purpose of taxable income, the interest income was shown on the "receipt basis". Therefore, the revenue felt that the assessee was liable to tax and the amount of tax was required to be added, within the meaning of section 143(1)(a). The assessee, thereupon, filed application under section 154, contending that the tax may be levied on income actually earned, and not on any hypothetical income, and since the action under section 143(1)(a) attracted liability on hypothetical income, it was an error apparent on the face of the record. Held that the question as to whether the revenue could proceed against the assessee under section 143(1)(a) was very much a debatable question-as to whether the assessee could be held liable to tax on this count or not. If that were so, in view of the settled legal position, the provisions of section 143(1)(a) were not attracted, and since the action had been taken under section 143(1)(a), obviously, it rightly attracted the right of the assessee to move application under section 154 to rectify the mistake K.K. Bissa for the Revenue . Ramit Mehta for the Assessee. ORDER By the Court : These are four matters, closely interconnected with each other. Appeal Nos. 47 of 2002, 48 of 2002 and 63 of 2004 are by the revenue, seeking to challenge the order of the Tribunal, upholding the acceptance of the application of the assessee, filed under section154 of the Income Tax Act, while civil writ, being No. 2568 of 1993, is by the assessee. 2. First of all, we take up the appeals of the revenue. 3. The three appeals relate to the different assessment years, inasmuch as the Appeal No. 47 of 2002 relates to assessment year 1991-92, the Appeal No. 48 of…

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