High Court Of Allahabad
CIT vs. Shiv Narain Karmendra Narain
Section 154
Asst. Years 1977-78, 1979-80
R.K. Agrawal & Prakash Krishna, JJ.
IT Ref. No. 108 of 1988
22nd December, 2004
Counsel Appeared
Shambhu Chopra, for the Applicant : None, for the Respondent
JUDGMENT
Prakash Krishna, J. :
The Tribunal, Delhi, at the instance of Revenue has referred the following two questions of law under s. 256(2) of the IT Act, 1961 (hereinafter referred to as ‘the Act’) for opinion of this Court :
“(i) Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that the rectification of mistake relating to incorrect depreciation @ 20 per cent on electric installations and generator and bringing it to 10 per cent was not correct as it relates to a debatable point and does not come within the purview of s. 154 of the IT Act, 1961 ?
(ii) Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that depreciation on electrical installations and generator was allowable @ 20 per cent instead of 10 per cent under the IT Rules?”
The facts giving rise to the present reference are as follows. The asst. yrs. 1977-78 and 1979-80 are involved. The IAC (Asst.) during the course of original assessment proceeding allowed depreciation of 20 per cent on electric installation and generator. Subsequently, the IAC (Asst.) initiated proceeding for rectification of the assessment order under s. 154 of the Act on the ground that depreciation of generator is allowable at 10 per cent and it was wrongly allowed at 20 per cent. After serving the notice under s. 154 of the Act the assessing authority rectified the earlier assessment order by allowing depreciation on generator at 10 per cent in place of 20 per cent. In appeal, the CIT(A) set aside the order passed under s. 154 of the Act on the ground that it was debatable question as to whether depreciation is to be granted on generator at 10 per cent or at 20 per cent. The Tribunal has confirmed the order passed by CIT(A). Heard Sri Shambhu Chopra, learned standing counsel for the Department. None appeared on behalf of the assessee.
Learned counsel for the Department submitted that finding of the Tribunal about the rate of applicability of depreciation on generator was not at all debatable. It was the case of apparent mistake on record. He submitted that this Court has recently held that on generator depreciation is allowable at the rate of 10 per cent. We have given careful consideration to the submission of learned standing counsel. For the applicability of s. 154 of the Act it is well established that there should be a mistake apparent from the record. Firstly, there should be mistake and secondly, it should be apparent from the record. The power conferred under s. 154 is not power of review. An assessing authority cannot be permitted to revise or review his earlier order. The question as to whether the generator is electrical installation and, therefore, depreciation at the rate of 20 per cent is allowable or not, is certainly question of debate. Any question which is to be examined by allowing process of reasoning or debate is not the matter, which can be rectified under s. 154 of the Act. We find that in the case of this very assessee, the Tribunal had allowed the depreciation on “generator” @ 20 per cent in the asst. yr. 1981-82 and, therefore, the issue is debatable one. In view of the above, mistake in the original assessment order was not a mistake which could be rectified by invoking s. 154 of the Act. It was not a mistake apparent on the face of record. At the most it was a case of error in the judgment or order. In the result, we are of the opinion that mistake could not be rectified by invoking provisions of s. 154 of the Act by the assessing authority. In view of the above, we answer question No. 1 in affirmative i.e., in favour of the assessee and against the Department. In view of our finding on question No. 1, the question No. 2 does not arise out of the order of the Tribunal. There shall be however no order as to costs.
[Citation : 280 ITR 355]
