Decision on a debatable point of law is not a apparent mistake & cannot be rectified u/s 154

Brief of the case:

Assessee claimed deductions on account of excise duty paid and interest thereon which was originally allowed by AO but subsequently rectified u/s 154 by making addition of the same. ITAT examined the facts and circumstances of the case and held that decision on a debatable point of law is not a mistake apparent from record and cannot rectified u/s 154.

Facts of the case:

• Assessee filed return of income at loss Rs.29,09,33,405/- which was selected for scrutiny.
• An assessment was completed under section 143(3) allowing the claim of the assessee in respect of payments made for excise duty amounting to Rs.29,17,01,515/- and interest thereon at Rs. 12,93,62,086/- on various dates from the period 1.04.2008 to 31.03.2009, which pertains to the period or previous years 2001-02 to 2005-06.
• The assessee, in the return for the assessment year 2009-10, filed on 23.09.2009, has shown towards the excise duty and excise deduction. The AO allowed the claim in the assessment order passed u/s 143(3).
• The assessee filed settlement application before the Customs & Central Excise Settlement Commission for the period 10.05.2001 to 31.03.2006. In terms of the final order of the Settlement Commission dated 29.02.2008 read with corrigendum dated 28.03.2008, the case was settled for an amount of Rs.57,43,83,420/- towards excise duty and penalty of Rs.40 crores and the payment of interest. Assessee paid various amount in different years as per direction of settlement commission and order passed by High Court in a writ petition filed by assessee.
• The assessee also filed the application before the Income-Tax Settlement Commission for the assessment years 2001-02 to 2007-08. In terms of the order of the Settlement Commission dated 28.03.2008, the case was settled for total additional income of Rs.105 crores for the aforesaid assessment years.
• During the impugned assessment year, the assessee claimed deduction of aforesaid central excise duties of Rs.29,17,01,515/- and interest of Rs.12,93,62,086/- as paid.
• During the impugned assessment year, the assessee did not claim any deduction for the penalty of Rs.40 crores paid by it. In the assessment order passed under section 143(3), the said payments were allowed as per the provisions of section 43B(a) of the Income Tax Act.
• Subsequently, after issuing the notice under section 154, the AO, vide order dated 24.05.2013, disallowed the payment in respect of excise duty of Rs.29.17 crores and interest payment of Rs.12.93 crores and similar payment of excise duty and interest of Rs.3.42 crores.
• After hearing the assessee, ultimately the AO rectified the assessment order and made the addition in respect of excise duty of Rs.29,17,01,515/-, interest thereon Rs.12,93,62,086/- and also excise duty of Rs.3,42,56,200/-.

Contention of the revenue: