Rajesh Sharma, Kullu V. ITO, Kullu

ITA 259/CHANDI/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68500 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-12-2012
• Assessment Year: 1999-2000
• Appeal Filed On: 27-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Depreciation; Period of limitation; Assessment record; Time period of passing order; Reason to believe; Unabsorbed depreciation
• Section: 143(3); 32; 148; 263; 154; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD ACCOUNTANT MEMBER ITA NO.259/CHD/2012 ASSESSMENT YEAR : 1999-2000 SHRI RAJESH SHARMA, VS THE ITO, L/H OF LATE SHRI BHAG CHAND SHARMA, KULLU. VPO : JAGAT SUKH, DISTT. KULLU (HP). PAN : AWGPS-1731E (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI TEJ MOHAN S INGH RESPONDENT BY : SHRI AKHILESH GUPTA DATE OF HEARING : 11.09.2013 DATE OF PRONOUNCEMENT : 13.09.2013 O R D E R PER T.R.SOOD, AM THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER DATED 22.11.2011, PASSED BY THE LD. CIT(APPEALS) SH IMLA U/S 250(6) OF THE INCOME-TAX ACT,1961 ( IN SHORT THE A CT ). 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUND OF APPEAL : 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN LAW IN UPHOLDING THE PROCEEDINGS INITIATED AND THEREAFTER ORDER PASSED UNDER SECTION 154 OF THE ACT PASSED BY THE ASSESSING OFFICER IN AS MU CH AS THERE WAS NO MISTAKE APPARENT FROM RECORD WARRANTING ACTION U/S 154 AN D AS SUCH THE ORDER IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS FAILED TO APPRECIATE THAT THE ISSUES SOUGHT TO BE RECTIFIED BEING SET OF F OF UNABSORBED DEPRECIATION AGAINST CAPITAL GAINS WAS ALREADY CONSIDERED UNDER SECTION 143(3) AND THEREAFTER UNDER SECTION 147/143(3) AND AS SUCH THE PROCEEDING S INITIATED WAS ON A DEBATABLE ISSUE BEYOND THE SCOPE AND REALM OF SECTION 154 OF THE ACT WHICH IS ARBITRARY AND UNJUSTIFIED. 2 3. THAT WITHOUT PREJUDICE TO THE ABOVE LEGAL POSITION, THE LD. CIT(APPEALS) HAS FURTHER ERRED IN UPHOLDING THE DISALLOWANCE OF SET OFF OF UNABSORBED DEPRECIATION OF RS.5,20,294/- AND RS.347,410/- PERTAINING TO ASSESS MENT YEARS 1997-98 AND 1998-99 RESPECTIVELY AGAINST CAPITAL GAINS WHICH IS ARBITRA RY AND UNJUSTIFIED. 3. AFTER HEARING BOTH THE PARTIES, WE FIND THAT A N OTICE UNDER SECTION 154 OF THE ACT WAS ISSUED TO THE ASSESSEE. THE ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143(3)/148 V IDE ORDER DATED 25.03.2003 AT A BUSINESS LOSS OF RS.11,59,290 /- AND LONG TERM CAPITAL GAINS AMOUNTING TO RS. 15,48,077/- AND AFTER COMPUTATION OF TAXABLE INCOME NET LONG TERM CAPITAL GAINS WAS ASSESSED AT RS. 3,88,787/-. THEREAFTER, ASSESSMENT WAS AGAIN COMPLETED UNDER SECTION 147/143(3) VIDE ORDER DATED 29.12.2006 ON THE SAME INCOME ALREADY ASSESSED VIDE ORDER UNDER SECTION 143(3) DATED 25.03.2003. SUBSEQUENTL Y, ON PERUSAL OF ASSESSMENT RECORDS, IT IS NOTICED THAT S ET OFF OF UNABSORBED DEPRECIATION TO THE TUNE OF RS.520,294/- AND RS. 347,410/- FOR THE ASSESSMENT YEAR 1997-98 AND 1998- 99 RESPECTIVELY HAD INADVERTENTLY BEEN ALLOWED TO THE ASSESSEE WHILE COMPUTING THE INCOME AND ACCORDINGLY A NOTICE UNDER SECTION 154 OF THE ACT WAS ISSUED TO ASSESSEE FOR D ENYING SET OFF OF UNABSORBED DEPRECIATION. 4. FEW ADJOURNMENTS WERE TAKEN DURING THE PROCEEDIN GS UNDER SECTION 154 OF THE ACT BUT ULTIMATELY NO EXPL ANATION WAS GIVEN. THEREFORE, ASSESSING OFFICER WENT ON TO DEC IDE THE ISSUE BY PRESUMING THAT ASSESSEE HAS NO OBJECTION FOR PRO POSED RECTIFICATION. AFTER QUOTING THE PROVISIONS OF SEC TION 32(2) OF THE ACT, IT WAS HELD THAT AFTER THE AMENDMENT IN SE CTION 32(2) OF THE ACT, UNABSORBED DEPRECIATION FOR ASSESSMENT YEAR 1997-98 WAS NOT ALLOWABLE AGAINST OTHER HEADS OF IN COME AS THE ASSESSEE HAS ALREADY DISCONTINUED BUSINESS. 3 5. ON APPEAL, THE ORDER OF ASSESSING OFFICER WAS CO NFIRMED BY THE LD. CIT(APPEALS). 6. BEFORE US, LD. COUNSEL FOR THE ASSESSEE REFERRED TO PAGE 3 TO 5 OF THE PAPER BOOK WHICH IS COPY OF THE FIRST A SSESSMENT ORDER DATED 25.03.2003. HE REFERRED TO THE LAST PAG E OF THE ASSESSMENT ORDER AND POINTED OUT THAT ASSESSING OFF ICER HAS SPECIFICALLY ALLOWED THE UNABSORBED DEPRECIATION. T HEN HE REFERRED TO PAGE 7 OF THE PAPER BOOK WHICH IS COPY OF THE REASONS RECORDED FOR ISSUANCE OF NOTICE UNDER SECTI ON 148 OF THE ACT. HE POINTED OUT THAT ASSESSMENT WAS SPECIF ICALLY REOPENED FOR THE REASON THAT UNABSORBED DEPRECIATIO N HAD BEEN WRONGLY ALLOWED. HOWEVER, IN THE ASSESSMENT ORDER DATED 29.12.2006 (COPY OF WHICH IS FILED AT PAGE 10-16 OF THE PAPER BOOK ) THIS UNABSORBED DEPRECIATION WAS AGAIN ALLOW ED AFTER ELABORATE DISCUSSION. ONCE, AN ISSUE HAS BEEN DECI DED BY TAKING A PARTICULAR VIEW, THEN IT CANNOT BE SAID TH AT THERE IS A MISTAKE APPARENT FROM THE RECORD. THE ASSESSING OF FICER HAS CONSIDERED THE ISSUE IN DETAIL AND IN FACT, FOLLOWE D THE DECISION OF CHANDIGARH BENCH OF TRIBUNAL IN CASE OF ITO VS M /S KESHWA ENTERPRISES (P) LTD. 102 TTJ (CHD) 446. THEREFORE, NO MISTAKE WAS COMMITTED BECAUSE IT WAS A DELIBERATE DECISION AFTER CONSIDERING THE PROVISIONS OF SECTION 32(2) OF THE ACT AND DECISION OF THE TRIBUNAL. HE FURTHER SUBMITTED THA T SOME CONTROVERSY WAS GOING ON IN RESPECT OF THE ISSUE OF ALLOWANCE OF UNABSORBED DEPRECIATION AGAINST THE CAPITAL GAIN ET C. AND CONTRARY DECISIONS WERE AVAILABLE WHICH MEANS THE I SSUE BEFORE ASSESSING OFFICER WAS TOTALLY DEBATABLE AND HE HAS TAKEN A PARTICULAR VIEW. EVEN HON'BLE MADRAS HIGH COURT IN CASE OF CIT 4 V POINEER ASIA PACKING P.LTD. 310 ITR 198 HAS TAKEN THE VIEW THAT SUCH UNABSORBED DEPRECIATION WAS ALLOWABLE EVE N AGAINST THE INCOME FROM OTHER THAN BUSINESS AND THIS DECISI ON WAS LATER ON FOLLOWED BY THE SAME HON'BLE MADRAS HIGH C OURT IN CASE OF CIT V RPIL SIGNALLING SYSTEMS LTD. 328 ITR 283. 7. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT A MISTAKE CAN BE RECTIFIED UNDER THE PROVISIONS OF SECTION 15 4 OF THE ACT ONLY IF THE SAME IS APPARENT FROM RECORD. HE REFERR ED TO THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF BA LARAM, INCOME TAX OFFICER V VOLKAT BROTHERS & OTHERS 82 IT R 50 WHEREIN IT WAS CLEARLY HELD THAT IF SOME MISTAKE IS TO BE DETECTED BY ELABORATE PROCESS OF ARGUMENT AND REASO NING, THEN SUCH MISTAKE CANNOT BE CALLED A MISTAKE APPARENT FR OM THE RECORD. THE MISTAKE HAS TO BE VERY CLEAR/DISCERNIB LE FROM THE FACE OF THE ORDER. HE ALSO RELIED ON THE DECISIONO F HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT V TTK PREST IGE LTD. 322 ITR 390. 8. ON THE OTHER HAND, LD. DR SUBMITTED THAT IN-FACT , THERE WERE TWO SPECIAL BENCH DECISIONS AGAINST THE ASSESS EE. IN THE FIRST CASE I.E. SOUTHERN TRAVELS V ACIT 103 ITD 198 , IT WAS CLEARLY HELD THAT UNABSORBED DEPRECIATION CANNOT BE ALLOWED AGAINST ANY OTHER HEAD OTHER THAN THE INCOME FROM B USINESS OR PROFESSION. SIMILAR VIEW WAS TAKEN IN ANOTHER SPEC IAL BENCH DECISION IN CASE OF DCIT V TIMES GUARANTY LTD. 131 TTJ 257. HE FURTHER SUBMITTED THAT CLEARLY A MISTAKE HAS CRE PT IN THE ORDER OF THE DECISION OF THE A.O. BECAUSE OF THESE DECISIONS WHICH WERE OF BINDING NATURE. 5 9. IN THE REJOINDER, LD. COUNSEL FOR THE ASSESSEE S TATED THAT TWO DECISIONS FROM SPECIAL BENCHES WERE NOT AVAILAB LE ON THE DATE WHEN NOTICE UNDER SECTION 154 WAS ISSUED ON 11 .5.2007 AND THEREFORE, IT CANNOT BE SAID THAT ON THE DATE O F NOTICE, THERE WAS ANY MISTAKE APPARENT FROM THE RECORD. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND FIND FO RCE IN THE SUBMISSION OF LD. COUNSEL FOR THE ASSESSEE. THE OR IGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF TH E ACT AND WHILE COMPUTING THE TOTAL INCOME OF THE ASSESSEE, U NABSORBED DEPRECIATION WAS REDUCED FROM SUCH INCOME BY THE AS SESSING OFFICER. THEREAFTER, REASONS WERE RECORDED FOR RE- OPENING OF THE ASSESSMENT. THE RELEVANT PORTION OF THE REASONS (C OPY OF WHICH IS PLACED AT PAGE 7 OF THE PAPER BOOK) READS AS UND ER : ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3)/1 48 VIDE ORDER DATED 25.03.2003 AT A BUSINESS LOSS OF RS . 11, 59, 29 0/- AND CAPITAL GAINS AMOUNTING TO RS .3,88,787/-. SUBSEQUENTLY, PER USAL OF REVISED COMPUTATION OF INCOME FILED BY THE ASSESSES REVEALE D THAT HE HAS SET OFF THE UNABSORBED BUSINESS LOSS AS WELL AS UNABSORBED DEPRECIATION AGAINST THE SHORT TERM CAPITAL GAINS AND LONG TERM CAPITAL GAINS, WHICH IS NOT CORRECT AS THE ASSESSEE HAS DISCONTINUED HIS BUSINE SS IN THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION. TH E BUSINESS IN WHICH THE LOSS WAS ORIGINALLY SUFFERED SHOULD CONTINUE TO BE CARRIED ON BY THE ASSESSEE. IN THIS CASE THE ASSESSEE HAS SOLD HIS HO TEL AND THEREAFTER HE DISCONTINUED HIS BUSINESS THEREFORE, SET OFF OF UNA BSORBED DEPRECIATION AND UNABSORBED LOSS AGAINST SHORT-TERM CAPITAL- GAI NS AND LONG-TERM CAPITAL GAINS HAS WRONGLY BEEN CLAIMED BY THE : ASSESSEE . FURTHER, ON PERUSAL OF AGREEMENT TO SALE REVEALED THAT THE ASSE SSEE HAD SOLD HIS HOTEL BUILDING (HOTEL DEVLOK, MANALI) AND KEMP COTTAGE BO TH CONSISTING OF 21 ROOMS TWO FAMILY SUITE, FOUR COTTAGES AND A TOURIST COTTAGE WHICH WERE CONSTRUCTED ON THE LAND FOR A CONSIDERATION OF RS.5 0 LAKH ON 31-10-1998. SINCE BOTH HOTEL AND KEMP COTTAGE IS CONSTRUCTED ON A SINGLE PIECE OF LAND AND BEING DEPRECIABLE ASSET AND CAPITAL GAINS ACCRUED ON SALE OF THAT ASSET WAS TO BE TAXED UNDER THE HEAD SHORT TER RA CAPITAL GAINS. THE SHORT TERM CAPITAL GAINS SHOULD BE COMPUTED IN THE FOLLOWING MANNER :- SALE CONSIDERATION RS.50,00,000-00 LESS: WDV OF HOTEL RS.17,03,345.00 SHORT TERM CAPITAL GAINS RS. 32,96,655.00 THEREFORE, I HAVE REASON TO BELIEVE THAT AN INCOME OF RS,32,96,655/~ CHARGEABLE TO TAX HAS ESCAPED ASSESS MENT BY REASON OF FAILURE ON THE PART OF THE ASSESSEE TO .DISCLOSE TRULY ALL MATERIAL FACTS NECESSARY OF ASSESSMENT. THUS, IN THIS CASE, INCOME OF 6 RS.32,96,655/- HAS ESCAPED ASSESSMENT WHICH HAS TO BE BROUGHT TO TAX BY REOPENING THE ASSESSMENT U/S 147. 11. AFTER RECORDING THE ABOVE REASONS, A NOTICE UND ER SECTION 148 WAS ISSUED. DURING THE RE-ASSESSMENT PROCEEDIN GS, IT WAS OBSERVED THAT PERUSAL OF REVISED COMPUTATION OF INC OME FILED BY THE ASSESSEE REVEALED THAT HE HAS SET-OFF THE UN-AB SORBED BUSINESS LOSS AS WELL AS UNABSORBED DEPRECIATION AG AINST THE SHORT TERM CAPITAL GAINS AND LONG TERM CAPITAL GAIN S WHICH IS NOT CORRECT AS THE ASSESSEE HAS DISCONTINUED HIS BU SINESS IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR U NDER CONSIDERATION. THE ASSESSEE WAS ASKED TO FILE JUST IFICATION FOR ALLOWANCE OF SUCH DEPRECIATION. THE ASSESSEE FILED A DETAILED REPLY WHICH WAS EXAMINED BY ASSESSING OFFICER. THE REAFTER, AFTER CONSIDERING AMENDED PROVISIONS OF SECTION 32( 2), THE ASSESSING OFFICER OBSERVED AS UNDER III) THE LANGUAGE USED IN SUB-CLAUSES OF SECTION 3 2(2) OF THE ACT IS PRECISE, CLEAR AND UNAMBIGUOUS. IT DOES NOT ADMIT MORE THAN ONE ME ANING. BY FORCE OF THE SUB CLAUSE (I) , (II) AND (III) (A) (B) OF SECTION 32(2 ) OF THE ACT, IT IS ABUNDANTLY CLEAR, THAT WITH EFFECT FROM 01-04-1997 UNABSORBED DEPRECIATION SHALL BE SET OFF AGAINST THE BUSINESS INCOME AS WELL AS FROM ANY OTH ER INCOME FOR THAT ASSESSMENT YEAR. AND IF THE UNABSORBED DEPRECIATION CAN NOT BE WHOLLY SET OFF IN THAT ASSESSMENT YEAR THEN IT SHALL BE CARRIED FORWARD TO THE FOLLOWING ASSESSMENT YEAR AND SET OFF AGAINST BUSINESS INCOME ASSESSABLE FOR THAT ASSESSMENT YEAR AND AGAIN IF THE UNABSORBED DEPRECIATION CANNOT BE WHOL LY SET OFF THEN THE AMOUNT OF UNABSORBED DEPRECIATION ALLOWANCE NOT SO SET OFF SH ALL BE CARRIED FORWARD TO THE FOLLOWING ASSESSMENT YEAR NOT BEING MORE THAN EIGHT ASSESSMENT YEARS IMMEDIATELY SUCCEEDING THE ASSESSMENT YEAR FOR WHICH THE AFORES AID ALLOWANCE WAS FIRST COMPUTED. 12. IN VIEW OF THE ABOVE OBSERVATIONS, ASSESSEE WAS AGAIN ASKED TO GIVE HIS STAND IN VIEW OF THE AMENDED PROV ISIONS. AT THAT STAGE, ASSESSEE QUOTED THE DECISION OF ITO VS M/S KESWA ENTERPRISES PVT. LTD. (SUPRA). THE ASSESSING OFFIC ER ULTIMATELY DECIDED THE ISSUE AS UNDER : I HAVE CONSIDERED THE WRITTEN SUBMISSIONS OF THE A SSESSEE AND HAVE COMPARED THE FACTS OF THIS CASE WITH THE FACTS OF T HE ABOVE REFERRED 7 CASE. THE FACTS OF THE CASE UNDER CONSIDERATION AND THE CASE DECIDED BY THE HON'BLE ITAT, BENCH ARE SIMILAR. IN PARA 6 O F THE ORDER THE HON'BLE ITAT, BENCH HAS OBSERVED AS UNDER :- * 'FROM THE ABOVE VARIOUS PROVISIONS OF LAW RELATING TO UNABSORBED DEPRECIATION, WE FIND THAT LAW WHICH WAS AVAILABLE UP TO- 1996-97 HAS BEEN REINSTATED FROM ASSESSMENT YEAR 2002- 03 AND IN THE INTERVENING PERIOD LAW AS MENTIONED A BOVE WAS IN OPERATION. WHEN THE LAW WAS AMENDED WITH EFFECT FRO M ASSESSMENT YEAR 1997-98 IN THE INTERVENING PERIOD, THERE WAS WIDE SPREAD APPREHENSION ABOUT THE TREATMENT OF UNA BSORBED DEPRECIATION AS ON 1-4-1997 AND LIMITATION PERIOD O F FA YEARS AND TO ALLAY THE FEAR, THE THEN FINANCE MINISTER MA DE A SPEECH IN THE PARLIAMENT WHICH WERE ALTHOUGH ALREADY MENTI ONED IN THE ASSESSEE SUBMISSIONS IS REPEATED HERE AT THE COST O F THE REPETITION: 'CLAUSE 11 OF THE BILL SEEKS TO AMEND SECTION 32 OF THE INCOME- TAX ACT, 1961 RELATING TO DEPRECIATION. DUR ING THE COURSE OF DISCUSSION ON THE GENERAL BUDGET, A NUMBE R OF HON'BLE MEMBERS HAVE EXPRESSED THEIR APPREHENSION T HAT THE PROPOSED AMENDMENT LIMITING CARRY FORWARD OF UNABSO RBED DEPRECIATION TO 8 YEARS WILL ADVERSELY 'AFFECT THE GROWTH OF INDUSTRY. SIMILAR APPREHENSIONS HAVE BEEN RAISED IN A LARGE NUMBER OF POST- BUDGET MEMORANDA. I WOULD LIKE TO A LLAY THESE YEARS. THE PROPOSED AMENDMENT IS ONLY PROSPECTIVE I NASMUCH AS THE CUMULATIVE UNOBSERVED EX PARTE BROUGHT FORWA RD AS ON 1- 4-1997, CAN STILL BE SET OFF AGAINST TAXABLE PROFIT S OR INCOME UNDER ANY OTHER HEAD FOR THE ASSESSMENT YEAR 1997-9 8 AND SEVEN SUBSEQUENT ASSESSMENT: YEARS. THEREFORE, THE PROPOSED CHANGE WILL HAVE EFFECT ONLY AFTER 8 YEARS AND THER E IS NO CAUSE FOR IMMEDIATE CONCERN ABOUT ITS LIKELY IMPACT ON I NDUSTRY. EIGHT YEARS IS A PERIOD LONG ENOUGH FOR INDUSTRY TO ADJUST ITSELF TO THE NEW DISPENSATION AND PROVIDE FOR DEPRECIATIO N ACCORDINGLY . THE HON'BLE ITAT, BENCH CONCLUDED IN PARA 7 OF THE SAID ORDER AS UNDER: 'THEREFORE, IN OUR CONSIDERED VIEW AS PER THE VARIO US PROVISIONS OF LAW RELATING TO CARRY FORWARD DEPRECIATION AND SPEECH OF THE FINANCE MINISTER IN THE PARLIAMENT WE HAVE NO HESIT ATION IN UPHOLDING THE ORDER OF THE COMMISSIONER OF INCOME T AX (APPEALS) TO SET OFF AGAINST OTHER INCOME BUT IN VI EW OF THE FACT THAT BY VIRTUE OF PROVISIONS EFFECTIVE FROM ASSESSM ENT. YEAR 1997-98, ASSESSEE IS ENTITLED TO CARRY FORWARD ONLY UP TO 8 ASSESSMENT YEARS. IN THIS CASE UNABSORBED DEPRECIAT ION UP TO ASSESSMENT YEAR 1996-97 HAS BECOME CURRENT DEPRECIA TION OF ASSESSMENT YEAR 1997-98 WHICH SHALL BE AVAILABLE FO R SET OFF FOR EIGHT YEARS IN VIEW OF THE ABOVE DISCUSSIONS. REL EVANT ASSESSMENT YEAR 2002-03 , FALLS WITHIN A PERIOD OF 8 YEARS, HENCE, UNABSORBED DEPRECIATION UP TO ASSESSMENT YEA R 1998-99 SHALL BE SET OFF AGAINST OTHER INCOME OF ASSESSES I N THE RELEVANT YEAR. 8 13. THE ABOVE CLEARLY SHOWS THAT ASSESSING OFFICER, AFTER DETAILED DISCUSSION AND ANALYSIS OF THE PROVISIONS, HAS REACHED A PARTICULAR CONCLUSION. NOW LATER ON, ASSESSING O FFICER CANNOT SAY THAT A MISTAKE HAS CREPT IN THE ASSESSMENT ORDE R. IT THIS IS ACCEPTED, THEN NO ASSESSMENT WOULD EVER BECOME FINA L. IN SUCH CASES, THE REVENUE IS NOT WITHOUT REMEDY BECAUSE AS SESSING OFFICER COULD HAVE POINTED OUT TO THE CONCERNED COM MISSIONER THAT IN VIEW OF THE DECISION OF THE SPECIAL BENCH I N CASE OF SOUTHERN TRAVELS (SUPRA), A WRONG VIEW HAS BEEN TAK EN WHICH MAY BE REVISED UNDER SECTION 263 OF THE ACT. THE R EVISIONARY POWERS UNDER SECTION 263 ARE SPECIFICALLY MEANT FOR EVEN THESE KIND OF MISTAKES. 14. WE MAY REFER TO THE DECISION OF HON'BLE SUPREME COURT IN CASE OF ACIT VS SAURASHTRA KUTCH STOCK EXCHANGE LTD . 305 ITR 227. IN THAT CASE, THE ASSESSING OFFICER REFUSED T O GRANT EXEMPTION UNDER SECTION 11 TO THE STOCK EXCHANGE AN D THIS POSITION WAS CONFIRMED BY CIT(APPEALS). THE TRIBUN AL, ORIGINALLY HELD VIDE ORDER DATED 27.10.2000 THAT LO WER AUTHORITIES WERE RIGHT IN NOT GRANTING EXEMPTION. LATER ON, ON 13.11.2000, AN APPLICATION UNDER SECTION 254 (2) OF THE ACT WAS MOVED TO THE TRIBUNAL POINTING OUT THAT TRIBUNAL HA S COMMITTED A MISTAKE BECAUSE DECISION OF HON'BLE GUJ RAT HIGH COURT IN CASE OF HIRA LAL BHAGWATI V CIT 246 ITR 18 8 WAS NOT CONSIDERED. THE TRIBUNAL AGREED WITH THIS CONTENTI ON AND RECALLED ITS ORDER. THE REVENUE FILED A WRIT PETIT ION BEFORE THE HON'BLE GUJRAT HIGH COURT THAT TRIBUNAL HAS NO SUCH POWER TO RECALL THE ORDER. THE HON'BLE GUJRAT HIGH COURT CON FIRMED THE DECISION OF TRIBUNAL. MATTER TRAVELED TO THE HON'B LE SUPREME 9 COURT. THE HON'BLE SUPREME COURT, AFTER DETAILED A NALYSIS CONFIRMED THE ORDER OF TRIBUNAL. IT HAS BEEN OBSER VED AT PARAS 14, 37, 40 AND 47 AS UNDER : 14. THE QUESTION WHICH FELL FOR CONSIDERATION BEFO RE THE INCOME-TAX AUTHORITIES RELATED TO EXEMPTION IN FAVOUR OF A TR UST. THE ISSUE CAME UP FOR CONSIDERATION BEFORE THE HIGH COURT OF GUJARAT IN HIRALAL BHAGWATI {[2000] 246 ITR 188.} WHETHER A TRUST WA S ENTITLED TO EXEMPTION FROM PAYMENT OF TAX UNDER THE ACT. THE HI GH COURT HELD THAT THE TRUST COULD CLAIM SUCH EXEMPTION. ALL AU THORITIES UNDER THE ACT, INCLUDING THE TRIBUNAL, WERE BOUND BY THE SAID DECISION. UNFORTUNATELY, HOWEVER, THE ATTENTION OF THE TRIBUN AL WAS NOT INVITED TO THE SAID DECISION AT THE TIME WHEN THE CASE OF T HE ASSESSEE WAS CONSIDERED AND ORDERS WERE PASSED UNDER THE ACT. SU BSEQUENTLY, HOWEVER, THE ASSESSEE CAME TO KNOW ABOUT THE SAID J UDGMENT AND HENCE AN APPLICATION UNDER SECTION 254(2) WAS FILED BRINGING IT TO THE NOTICE OF THE TRIBUNAL. THERE WAS THUS A MISTAKE A PPARENT FROM THE RECORD AND THE TRIBUNAL WAS BOUND TO RECALL ITS EA RLIER ORDER WHICH HAS BEEN DONE. NO ILLEGALITY CAN BE SAID TO HAVE BE EN COMMITTED BY THE TRIBUNAL IN ALLOWING THE APPLICATION AND IN REC ALLING THE ORDER AND NO GRIEVANCE CAN BE MADE AGAINST SUCH ACTION OF THE TRIBUNAL. MOREOVER, NO PREJUDICE HAD BEEN CAUSED TO THE REVEN UE INASMUCH AS THE TRIBUNAL HAS NOT ALLOWED THE APPEAL FILED BY TH E ASSESSEE NOR QUASHED AN ORDER OF ASSESSMENT. IT MERELY RECALLED THE EARLIER ORDER IN THE LIGHT OF A DECISION OF THE HIGH COURT OF GUJ ARAT. THE ORDER OF THE TRIBUNAL, THEREFORE, WAS STRICTLY IN ACCORDANCE WITH LAW. 37. IN OUR JUDGMENT, THEREFORE, A PATENT, MANIFEST AND SELF-EVIDENT ERROR WHICH DOES NOT REQUIRE ELABORATE DISCUSSION O F EVIDENCE OR ARGUMENT TO ESTABLISH IT, CAN BE SAID TO BE AN ERRO R APPARENT ON THE FACE OF THE RECORD AND CAN BE CORRECTED WHILE EXERC ISING CERTIORARI JURISDICTION. AN ERROR CANNOT BE SAID TO BE APPAREN T ON THE FACE OF THE RECORD IF ONE HAS TO TRAVEL BEYOND THE RECORD TO SE E WHETHER THE JUDGMENT IS CORRECT OR NOT. AN ERROR APPARENT ON TH E FACE OF THE RECORD MEANS AN ERROR WHICH STRIKES ON MERE LOOKING AND DOES NOT NEED A LONG DRAWN OUT PROCESS OF REASONING ON POINT S WHERE THERE MAY CONCEIVABLY BE TWO OPINIONS. SUCH ERROR SHOULD NOT REQUIRE ANY EXTRANEOUS MATTER TO SHOW ITS INCORRECTNESS. TO PUT IT DIFFERENTLY, IT SHOULD BE SO MANIFEST AND CLEAR THAT NO COURT WOULD PERMIT IT TO REMAIN ON RECORD. IF THE VIEW ACCEPTED BY THE COURT IN THE ORIGINAL JUDGMENT IS ONE OF POSSIBLE VIEWS, THE CASE CANNOT BE SAID TO BE COVERED BY AN ERROR APPARENT ON THE FACE OF THE REC ORD. 40. THE CORE ISSUE, THEREFORE, IS WHETHER NON-CONSI DERATION OF A DECISION OF JURISDICTIONAL COURT (IN THIS CASE A DE CISION OF THE HIGH COURT OF GUJARAT) OR OF THE SUPREME COURT CAN BE SA ID TO BE A MISTAKE APPARENT FROM THE RECORD ? IN OUR OPINION , BOTH - THE TRIBUNAL AND THE HIGH COURT-WERE RIGHT IN HOLDING T HAT SUCH A MISTAKE 10 CAN BE SAID TO BE A MISTAKE APPARENT FROM THE RECO RD WHICH COULD BE RECTIFIED UNDER SECTION 254(2). 47. IN THE PRESENT CASE, ACCORDING TO THE ASSESSEE, THE TRIBUNAL DECIDED THE MATTER ON OCTOBER 27, 2000. HIRALAL BHA GWATI {[2000] 246 ITR 188 (GUJ).} WAS DECIDED A FEW MONTHS PRIOR TO THAT DECISION, BUT IT WAS NOT BROUGHT TO THE ATTENTION OF THE TRIB UNAL. IN OUR OPINION, IN THE CIRCUMSTANCES, THE TRIBUNAL HAS NOT COMMITTE D ANY ERROR OF LAW OR OF JURISDICTION IN EXERCISING POWER UNDER SUB-SE CTION (2) OF SECTION 254 OF THE ACT AND IN RECTIFYING THE MISTAKE APPAR ENT FROM THE RECORD. SINCE NO ERROR WAS COMMITTED BY THE TRIBUN AL IN RECTIFYING THE MISTAKE, THE HIGH COURT WAS NOT WRONG IN CONFIR MING THE SAID ORDER. BOTH THE ORDERS, THEREFORE, IN OUR OPINION, ARE STRICTLY IN CONSONANCE WITH LAW AND NO INTERFERENCE IS CALLED F OR. 15. A COMBINED READING OF ABOVE PARAS CLEARLY SHOWS THAT A MISTAKE CAN BE APPARENT FROM RECORD IF IT IS CLEARL Y MANIFESTED IN THE ORDER. FURTHER NON-CONSIDERATION OF BINDING PRECEDENTS WOULD ALSO CONSTITUTE A MISTAKE IN AN ORDER. HOWEVE R, THE BINDING PRECEDENT IN THIS CASE WAS THE DECISION OF THE JURISDICTIONAL HIGH COURT OF GUJRAT. THEREFORE, CL EARLY IF THE DECISION FROM SOME NON JURISDICTIONAL HIGH COURT OR FROM TRIBUNAL IS PRONOUNCED, THEN IT CANNOT BE SAID THAT THE SAME IS BINDING IN THE SENSE THAT ORDER WOULD BECOME INFEST ED WITH MISTAKE. IN CASE BEFORE US, THERE WAS A CONTROVERS Y REGARDING ALLOWABILITY OF UNABSORBED DEPRECIATION AGAINST THE INCOME FROM CAPITAL GAIN AND THAT IS WHY, ULTIMATELY EVEN A SPECIAL BENCH WAS CONSTITUTED. HOWEVER, THE DECISION OF SP ECIAL BENCH ITSELF CANNOT BE EQUATED WITH THE DECISION OF JURIS DICTIONAL HIGH COURT. IN FACT, IN THE CASE BEFORE US, THE ASSESSIN G OFFICER HAS FOLLOWED THE DECISION OF CHANDIGARH BENCH OF THE TR IBUNAL IN THE RE-ASSESSMENT ORDER PASSED UNDER SECTION 143(3) RED WITH SECTION 148 OF THE ACT. THEREFORE, IT CANNOT BE SA ID THAT THERE IS A MISTAKE APPARENT ON THE RECORD IN THE ASSESSME NT ORDER. 11 THE ISSUE REGARDING ALLOWABILITY OF UNABSORBED DEPR ECIATION AGAINST CAPITAL GAIN WAS A DEBATABLE ISSUE AND DEBA TE WAS GOING ON AT THAT POINT OF TIME. THE NOTICE FOR REC TIFICATION OF MISTAKE HAS BEEN ISSUED ON 11.05.2007 WHEREAS THE D ECISION OF SPECIAL BENCH IN CASE OF SOUTHERN TRAVELS (SUPRA) W AS RENDERED ON 25.07.2006 AND IN CASE OF TIME GUARANTY LIMITED (SUPRA) ON 30.06.2010, WHICH CLEARLY SHOWS THAT AT THE RELEVAN T POINT OF TIME, EVEN THESE SPECIAL BENCH DECISIONS WERE NOT AVAILABLE. THEREFORE, IT CANNOT BE SAID THAT A MISTAKE WAS THE RE IN ASSESSMENT ORDER. IN VIEW OF THIS DISCUSSION, WE S ET ASIDE THE ORDER OF CIT(APPEALS). 16. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH SEPTEMBER,2013. SD/- SD/- (BHAVNESH SAINI) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 13 TH SEPTEMBER, 2013. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR ITAT, CHD.