Commissioner of Income Tax Vs. Gayatri Glass Works - Court Judgment

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head note: income tax act, 1961 . assessment - limitation assessment whether barred by limitation--question referred was whether tribunal was legally correct in holding that assessment made by ao on 13-3-1975 was barred by limitation. held: limitation for assessment is eight years in cases where ao is satisfied that assesse has concealed some income. because the notice under section 271(1)(c) was issued on 13-3-1975, i.e., after the limitation for final assessment had elapsed for normal cases, therefore, it cannot be said that ao was satisfied on the date on which normal limitation for assessment expired that assessee had concealed his income. in fact it appears that it was upon actual completion of assessment, i.e., 13-3-1975, that ao felt that assessee had concealed some income and, therefore, he issued the notice under section 271(1)(c). thus, assessment limitation was not saved by the provisions of section 153(1)(b). [paras 8 & 9] income tax act, 1961 section 153 rectification - mistake apparent issue of penalty notice under section 271(1)(c) because of difference between income assessed and returned and certain items of concealment--tribunal in its order had stated that ao had mentioned that because of the difference between the income assessed and the returned income and certain items of concealment, penalty notice under section 271(1)(c) had been issued. therefore, if this was, what cit relied upon to make an order of amendment so as to cancel his earlier order, it cannot be said that there is a mistake apparent from record because it was in fact the evidence before him, to which he had applied his mind and in the garb of amendment under section 154, cit, in fact was making an attempt to review his order, for which he had not been vested with powers under statute. held: where a decision has been arrived at after considering the relevant material and after appropriate reasoning, although the reasoning and consequently the conclusion may be mistaken on facts or on law; and where to demonstrate the mistake of fact or of law it requires a process of detailed reasoning, it would not be a case of an error apparent on record capable of rectification under section 154, but would virtually amount to review of the order. present was not a case where rectification was permissible. conclusion of tribunal that there was no apparent mistake of law and facts in cit(a)'s order was legally correct. income tax act, 1961 section 154 - - 8. so far as the third question above is concerned, the limitation for assessment is eight years in cases where the assessing officer is satisfied that the assessee has concealed some income. , after the limitation for final assessment had elapsed for normal cases, therefore, it cannot be said that the assessing officer was satisfied on the date on which normal limitation for assessment expired that the assessee had concealed his income.1. the following questions have been referred in this case:1. whether on the facts and in the circumstances of the case, the tribunal was legally correct in coming to the conclusion that there was no apparent mistake of law and facts in the order of the learned cit (a) dated 3.2.1983 which could be rectified under section 154(1)(b) and 154(2)(b) of the income tax act, 1961?2. whether the observations of the hon'ble tribunal that there is a presumption embedded in the order of the cit (appeals) that when he made the earlier order there was no evidence before him to show from the record that the assessment was saved by limitation because of the concealment by the assessee are based on correct appreciation of evidence on record?3. whether on the facts and in the circumstances of the case, the tribunal was legally correct in holding that the assessment made by the income tax officer on 13.3.1975 was barred by limitation.2. in short, the first two questions above indicate the doubt (a) whether the order of the cit (a) dated 3.2.1983 contained an error apparent on record which was capable of rectification under section 154(1)(b) and 154(2)(b) of the income tax act 1961; or (b) whether in the garb of rectification, the cit (a) had actually resorted to exercise of a power of review, which obviously he does not possess under the statute.3. apparently, where a decision has been arrived at after considering the relevant material and after appropriate reasoning, although the reasoning and consequently the conclusion may be mistaken on facts or on law; and where, to demonstrate the mistake of fact or of law it requires a process of detailed reasoning, it would not be a case of an error apparent on record capable of rectification under section 154, but would virtually amount to review of the order.4. in the case of c.i.t. v. hero cycles private limited : [1997]228itr463(sc) the supreme court held as follows:rectification under section 154 can only be made when a glaring mistake of fact or law committed by the officer passing the order becomes apparent from the record. rectification is not possible if the question is debatable. moreover a point which was not examined on facts or in law cannot be dealt with as a mistake apparent from the record.5. thus the power of the income tax authorities has been confined by the supreme court to the above type of limited cases, where rectification under section 154 is permissible, and for other mistakes, correction has been left to the higher forums.6. having examined the facts set out in the statement of case and more importantly in paragraph no. 6 of the order of the tribunal dated 13.6.1986, relevant words of which are quoted below, we are of the opinion that the present was not a case where rectification was permissible. the relevant words in the tribunal's order aforesaid are as follows:in the asstt. order, as we have projected supra, the ito had mentioned that because of the difference between the income assessed and the returned income and certain items of concealment, penalty notice under section 271(1)(c) has been issued. therefore, if this is, what the commissioner relied upon to make an order of amendment so as to cancel his earlier order, it cannot be said that there is a mistake apparent from record because it was in fact the evidence before him, to which he had applied his mind and in the garb of amendment under section 154, the commissioner, in fact was making an attempt to review his order, for which he has not been vested with powers under the statue.7. therefore, our answer to question no. 1 is that the conclusion of the tribunal was legally correct. our answer to question no. 2 is that the observation of the tribunal is correct.8. so far as the third question above is concerned, the limitation for assessment is eight years in cases where the assessing officer is satisfied that the assessee has concealed some income.9. our answer to question no. 3 is that because the notice under section 271(1)(c) was issued on 13.3.1975 i.e., after the limitation for final assessment had elapsed for normal cases, therefore, it cannot be said that the assessing officer was satisfied on the date on which normal limitation for assessment expired that the assessee had concealed his income. in fact it appears that it was upon actual completion of assessment i.e. 13.3.1975 that the assessing officer felt that the assessee had concealed some income and therefore he issued the notice under section 271(10)(c). thus the assessment limitation was not saved by the provisions of section 153(1)(b) of the income tax act. this conclusion is also supported by the decision of the gauhati high court in the case of smt. savitri rani malik v. commissioner of income tax .10. the question no. 3 is answered accordingly.11. reference disposed of.