JCIT Vs India Infrastructure Finance Company Limited (ITAT Delhi)
ITAT Delhi dismissed the Revenue’s appeal for AY 2017-18 in India Infrastructure Finance Company Ltd., holding that the recomputation of deductions u/s 36(1)(viia)(c) and 36(1)(viii) through s.154 was impermissible.
The AO, by invoking s.154, sought to reorder the sequence of deductions and reduced the combined claim by ₹12.16 crore, relying on Rural Electrification Corporation (ITAT Delhi). CIT(A) deleted the rectification, noting that the assessee had computed 36(1)(viia)(c) @ 5% on total income after allowing deduction u/s 36(1)(viii), in line with Tourism Finance Corporation of India (ITAT Delhi).
The Tribunal upheld CIT(A), emphatically holding that:
– the interplay and sequencing of deductions u/s 36(1)(viia)(c) and 36(1)(viii) is a highly debatable issue;
– existence of conflicting coordinate-bench decisions itself shows the issue is not a mistake apparent from record; and
– s.154 cannot be used to review or re-adjudicate debatable legal questions.
Accordingly, the AO’s rectification was beyond jurisdiction and rightly set aside.
Where two plausible judicial views exist, rectification u/s 154 is barred—recomputation of deductions must travel through regular assessment or appeal, not “rectification”
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the Revenue is preferred against the order of the Id. NFAC, Delhi dated 03.12.2024 pertaining to A.Y. 2017-18.
