Non-consideration of decision of Jurisdictional High Court or of the Supreme Court can be termed as ʻmistake apparent from the recordʼ which can be the subject matter of rectification application u/s. 154 even if not claimed earlier by the assessee during assessment proceedings or appellate proceedings
Sharda Cropchem Limited vs. DCIT [2019] 71 ITR (Trib.) 141 (Mumbai) – The assessee’s return was subject to assessment u/s 143(3). Additions were made u/s. 35D and also under other sections. The assessee did not contest addition u/s. 35D but filed appeal against the other additions. However, the assessee filed an application for rectification to allow the expenditure on issue of bonus shares, in terms of decision of the Bombay HC in CIT vs. WMI Cranes Limited [326 ITR5 23] and the SC in CIT vs. General Insurance Corporation [286 ITR 232]. However, the AO rejected the rectification application. The CIT(A) confirmed on the ground that there is no mistake apparent from record.
The Tribunal observed that the assessee moved rectification petition u/s. 154 for the first time towards its claim u/s. 35D relying upon the decision of the Hon’ble SC as well as the decision of the jurisdictional HC. The Tribunal held that non-consideration of a decision of the Jurisdictional High Court or of the Supreme Court could be termed as ‘mistake apparent from the record’ and the appeal was allowed.