Case Law Details
Hindustan Lever Limited Vs JCIT (Calcutta High Court)
Conclusion: Where an assessment order not in tuned with the law laid down by a binding precedent, it would amount to an error apparent on the record for the purpose of invoking rectification under section 154.
Held: In the instant case, department invoked provisions of section 154 in respect of the relevant assessment years on the basis of ratio laid down in 1994 Volume 206 Income Tax Report page 367 (Cal) (Appeejay Pvt. Ltd. v. Commissioner of Income-Tax) wherein it was held that the blending of different kinds of tea carried on by an assessee did not constitute manufacture or production of articles or things within the meaning of section 80 J and the authorities proposed to withdraw deductions allowed under Section 80 I as assessee was not engaged in the manufacture or production of any article at its units. Assessee contended that there was not an error apparent on the face of the record requiring invocation of Section 154. It was held an order of assessment must be in tune with the law laid down by a binding precedent. Since the subject orders of assessment not being in terms of the ratio of Apeejay, therefore, an error in order not in consonance with a binding precedent was an error apparent on the face of the record.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
The petitioner has challenged 3 notices, all dated March 21, 2000, issued under Section 154 of the Income Tax Act, 1961 for the assessment years 1991-92, 1992-93 and 1993-94.
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