Commissioner of Income Tax vs Lilasons Breweries (P) Limited

G.G. Sohani, Actg. C.J.

This is an application u/s 256(2) of the Income Tax Act, 1961 (hereinafter referred to as "the Act")

The material facts giving rise to this application, briefly, are as follows :

While framing the assessment for the assessment year 1974-75, the Income Tax Officer had upheld the claim of the assessee for deduction of Rs. 1,86,965 from its total income u/s 80J of the Act. Thereafter, the Income Tax Officer rectified the order of assessment on the ground that there was a mistake apparent on the face of the record inasmuch as in the computation of the allowable deduction u/s 80J of the Act, the Income Tax Officer had taken the value of the assets and liabilities as on December 31, 1973, which was the last day of the computation period whereas the Income Tax Officer should have taken the value of such assets and liabilities as on January 1, 1973. Aggrieved by the order of rectification, the assessee filed an appeal before the Commissioner of Income Tax (Appeals). That appeal was dismissed. The assessee then preferred a second appeal before the Tribunal. The Tribunal held that the Income Tax Officer could not have rectified the order of assessment u/s 154 of the Act. In this view of the matter, the Tribunal allowed the appeal. Aggrieved by the order passed by the Tribunal, the Revenue sought reference, but the application made by the Revenue in that behalf was rejected. Hence, the Revenue has filed this application.

Having heard learned counsel for the parties, we have come to the conclusion that the following question of law does arise out of the order passed by the Tribunal:

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that there was no mistake apparent on the face of the record and the Income Tax Officer was not right in rectifying the order of assessment u/s 154 of the Income Tax Act, 1961 ?"

The application is, therefore, allowed. The Tribunal is directed to state the case and to refer the aforesaid question of law to this court for its opinion. In the circumstances of the case, parties shall bear their own costs of this application.