Bombay High Court
M/S. Ganpati Chemicals,Bhandara vs The Income Tax Officer,Bhandara on 2 March, 2017
Bench: V.A. Naik
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
INCOME TAX APPEAL No.04 OF 2001
M/s. Ganpati Chemicals & Minerals,
A Partnership Firm,
having place of business at Main Road,
Bhandara, Distt. Bhandara (Mah.) : APPELLANT
...VERSUS...
The Asstt. Commissioner,
Income Tax Circle No.(2),
Main Road, Nagpur,
District Nagpur (Mah.). : RESPONDENT
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Shri N.S. Bhattad, Advocate for the Appellant.
Shri Mohota Advocate for the Respondent.
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WITH
INCOME TAX APPEAL No.03 OF 2001
M/s. Ganpati Chemicals,
A Partnership Firm,
having place of business at Main Road,
Bhandara, Distt. Bhandara (Mah.) : APPELLANT
...VERSUS...
The Income Tax Officer,
Bhandara Ward 1(2),
Main Road, Bhandara,,
District Bhandara (Mah.). : RESPONDENT
=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-
Shri N.S. Bhattad, Advocate for the Appellant.
Shri Mohota Advocate for the Respondent.
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WITH
INCOME TAX APPEAL No.06 OF 2001
M/s. Ganpati Chemicals & Minerals,
A Partnership Firm,
having place of business at Main Road,
Bhandara, Distt. Bhandara (Mah.) : APPELLANT
...VERSUS...
The Asstt. Commissioner,
Income Tax Circle No.1(2),
Main Road, Nagpur,
District Nagpur (Mah.). : RESPONDENT
=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-
Shri N.S. Bhattad, Advocate for the Appellant.
Shri Mohota Advocate for the Respondent.
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WITH
INCOME TAX APPEAL No.07 OF 2001
M/s. Ganpati Chemicals
A Partnership Firm,
having place of business at Main Road,
Bhandara, Distt. Bhandara (Mah.) : APPELLANT
...VERSUS...
The Income Tax Officer,
Bhandara Ward 1(2),
Main Road, Bhandara,,
District Bhandara (Mah.). : RESPONDENT
=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-
Shri N.S. Bhattad, Advocate for the Appellant.
Shri Mohota Advocate for the Respondent.
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AND
INCOME TAX APPEAL No.08 OF 2001
M/s. Ganpati Chemicals,
A Partnership Firm,
having place of business at Main Road,
Bhandara, Distt. Bhandara (Mah.) : APPELLANT
...VERSUS...
The Income Tax Officer,
Bhandara Ward 1(2),
Main Road, Bhandara,,
District Bhandara (Mah.). : RESPONDENT
=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-
Shri N.S. Bhattad, Advocate for the Appellant.
Shri Mohota Advocate for the Respondent.
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CORAM : SMT. VASANTI A. NAIK AND
V.M.DESHPANDE, JJ.
nd MARCH, 2017.
DATE : 2
ORAL JUDGMENT : (PER : Smt. Vasanti A. Naik, J.)
The assessee-M/s. Ganapati Chemicals is the appellant in all
the income tax appeals and the appeals are heard together as the issue
involved in the appeals is similar and similar orders of the Income Tax
Appellate Tribunal are challenged therein.
The appellant-assessee is a partnership firm running a small
scale industrial undertaking. The appellant-assessee was entitled to
claim deduction under Sections 80-HHA and 80-I of the Income-tax Act,
J-4.01,3.01,6.01,7.01&8.01.odt 4/6
1961 for the relevant assessment years. For the said assessment years,
the appellant was also entitled to claim deduction under Section 40(b) of
the Act on the total income of salary and interest. The deduction was
allowed by the Assessing Officer under Section 80-HHA and 80-I of the
Act by an intimation under Section 143(1)(e) of the Act. The deduction
under Section 80-HHA and 80-I was made on the gross profit and not on
the net income after the deduction under Section 40(b) of the Act was
made. After realizing the said mistake, the Assessing Officer passed
orders under Section 154 of the Act with a view to rectify the mistake.
The assessee filed appeals before the Commissioner of Income Tax
(Appeals) and the appellate authority allowed the appeals filed by the
appellant and set aside the orders of the Assessing Officer under Section
154 of the Act. The Revenue carried the matter to the Income Tax
Appellate Tribunal, Nagpur. The Income Tax Appellate Tribunal
allowed the appeals of the Revenue and held that in view of the
judgment of the Hon'ble Supreme Court in the case of Motilal Pesticides
India Private Limited vs. Commissioner of Income Tax, Delhi,
reported in 2000 DGLS (SC) 356, the Assessing Officer was justified in
rectifying the mistake under Section 154 of the Act. The Tribunal held
that the law was well settled and the action of the Assessing Officer of
rectifying the mistake was in conformity with the judgment of the
Hon'ble Supreme Court.
Shri N.S. Bhattad, the learned counsel for the appellant-
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assessee submitted that when the issue "whether deduction under
Sections 80-HHA and 80-I could have been made on the gross profit or
on the net income" was debatable, the Assessing Officer could not have
exercised the power under Section 154 of the Act, that relates to the
rectification of mistake only when the error is apparent from the record.
It is submitted that there were two contrary decisions of this Court and
hence the Full Bench has set the said issue at rest in the year 2009 in the
case of Plastiblends India Ltd., Mumbai vs. Additional Commissioner
of Income Tax, reported in 2010 (1) Mh. L.J. 527.
Shri Mohota, the learned counsel for the Revenue supported
the order of the Tribunal and submitted that the issue "whether the
deduction under Sections 80-HHA and 80-I of the Act could have been
made on gross profit or net profit" was set at rest by the judgment of the
Hon'ble Supreme Court, reported in 2000 DGLS (SC) 356 and hence, the
question was not debatable, as canvassed on behalf of the assessee. It is
submitted that before the Full Bench decided the issue by the judgment
reported in 2010 (1) Mh.L.J. 527, the issue was decided by the Hon'ble
Supreme Court in the judgment reported in 2000 DGLS (SC) 356. It is
submitted that the Tribunal rightly considered the said aspect of the
matter and held that the Assessing Officer was justified in rectifying the
mistake under Section 154 of the Act.
It appears on hearing the learned counsel for the parties that
there is no scope for interference with the orders of the Tribunal in these
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appeals. Though we have framed the question "whether a issue which is
debatable could be corrected under Section 154 of the Act", the same
would not arise for consideration in the circumstances of the case. The
issue was not debatable, as the same was decided by the Hon'ble
Supreme Court in the year 2000. In the judgment, reported in 2000
DGLS (SC) 356, the Hon'ble Supreme Court has held that the assessee
would be entitled to deduction under Section 80-HH of the Income tax
Act on the net profit and not on the gross profit. Though the Full Bench
of this Court has decided the issue in the year 2009, the Hon'ble Supreme
Court had decided the same way back in the year 2000 in the matter of
Motilal Pesticides India Private Limited. Since the Assessing Officer had
permitted the deduction under Section 80-HHA and 80-I of the Act on
the gross profit, the Assessing Officer was justified in rectifying the
mistake as permitting the deduction under Section 80-HHA and 80-I of
the Act on the gross income was an error apparent on the face of record.
In the circumstances of the case and for the reasons
aforesaid, the Income tax appeals are dismissed with no order as to costs.
JUDGE JUDGE
wadode
