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2007] 294 ITR 668 [2007] 161 TAXMAN 40 (KER.) HIGH COURT OF KERALA Commissioner of Income-tax, Central-I, Chennai* v. Janatha Steel Mills (P.) Ltd. C.N. RAMACHANDRAN NAIR AND K.M. JOSEPH, JJ. IT APPEAL NO. 16 OF 2000 NOVEMBER 7, 2006 Section 32AB of the Income-tax Act, 1961 - Investment deposit account - Assessment year 1990-91 - Whether where assessee, a limited company, engaged in steel production, claimed deduction under section 32AB of total income from business including share income received from three partnership firms, by virtue of proviso to section, assessee which was a company would not have been eligible for any deduction under section 32AB in respect of share income received from firms - Held, yes Section 154, read with section 32AB, of the Income-tax Act, 1961 - Rectification of mistakes - Apparent from records - Whether where Assessing Officer in original assessment overlooking proviso to section 32AB granted deduction to assessee under said section on share income of assessee from firms also along with its own eligible profit, in view of express provision contained in proviso to said section, original assessment completed under section 143(3) allowing relief in terms of claim was a mistake apparent and officer rightly rectified it later by invoking powers under section 154 - Held, yes FACTS The assessee was a partner in three firms besides being engaged in steel production in their factory. In the assessment for the assessment year 1990-91, the assessee was granted relief under section 32AB at 20 per cent of the total income from business including the share income received from the three partnership firms. However, the assessment so completed was later rectified under section 154 and the Assessing Officer withdrew the deduction granted on the share income. On appeal, the Commissioner (Appeals) allowed the assessee's claim on merits but did not consider the grounds raised by the assessee against the validity of rectification order. Thereafter, on revenue's appeal, the Tribunal while deciding the matter on merits in favour of the assessee, also held the rectification proceedings to be invalid as the issue was a debatable one and not an apparent…

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