1. The scope of s. 154 of the Income-tax Act, 1961, has been examined in T. S. Balaram, ITO v. Volkart Brothers : 82ITR50(SC) , and the Income-tax officer in seeking to exercise the power of rectification under s. 154 cannot travel beyond such scope as indicated in the decision. A 'mistake and apparent on the record' must be an obvious and a patent mistake and not something which can be established by a long drawn process of reasoning on which there may be conceivably be two opinions. Similarly, a decision on a debatable point of law cannot be said to be a 'mistake apparent on the record'. Mere fact that a process of computation is involved in determining the income or the tax liability does not make it a debatable point, however involved the computation may be.
2. A Division Bench of this court felt that reference to a larger Bench was called for and, therefore, directed such reference in view of the approach made in the judgment of this court in Addl. CIT v. Bharat Vijay Mills Limited, (I.T.R. No 32 of 1974, decided on September 10, 1975 - see Appendix infra p. 255). The application of the same provision as that which had to be considered by the Income-tax Officer here, (sic) in rectification in the earlier decision of this court. The court found in the approach made by the parties to the case that it could not be said that s. 154 could be applied. Evidently, the Division Bench which referred the case to the Full bench felt that this would be a question for examination on the facts of each case and on the facts recorded by the Appellate Tribunal in this case, there is no scope for controversy that s. 154 would be attracted.
3. We agree with the view indicated by the Bench which referred this case to the Full Bench. Ultimately whether, on the facts of the case, it is possible to say that there is a 'disputed' question on which two views are possible would depend upon the approach to the case and the attitude of the parties in the case. If the parties do not feel that two views are possible, then, there is no scope for consideration of such a question. If computation, however difficult it may be, is made by the Income-tax Officers, with which computation or with which approach to the computation, the assessee has no grievance, what remains there for a court to doubt the 'power of rectification' one fails to understand. On the facts before us, that is the situation.
4. There are two questions for references :
'(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in confirming the order of the Income-tax Officer passed under s. 154 of the Income-tax Act, 1961, holding that the said section was applicable
(2) Whether, on the facts and circumstances of the case, the Tribunal was justified in confirming the adoption of the figures of dividend declared in excess of 10 per cent. of the equity capital for the assessment years 1966-67 and 1967-68 without regular order, original or rectified, in this behalf for these years ?'
5. To understand the question, it may be necessary to refer to a few facts. For the assessment year 1968-69, the assessee on a total income of Rs. 31,21,022 excluding capital gains. The assessee, was a domestic company. It was liable to pay additional tax at 7.5% under Paragraph F of Item I(B) of Part I of Schedule I under the relevant Finance Act. It was so liable to pay additional tax on so much of the total income as did not exceed the 'relevant amount of distributions of dividends' by the company. The terms 'relevant amount of distribution of dividends' is explained in Explanation 1 to Item I of Paragraph F of Part I of the First Schedule to the Finance Act, 1967, and it is to be computed accordingly. Once that is computed, what is the amount in which additional tax at 7.5% has to be paid has to be computed on the basis of the determination of the 'relevant amount of distributions of dividends' and the 'total income'.
6. In the original assessment for the year 1968-69, the Income-tax Officer failed to take into account such amount as was liable to additional tax at 7.5% on the 'relevant amount of distribution of dividends' for the assessment year commencing on 1st of April, 1966. When he discovered this omission, he took up 'rectification' proceedings to add this sum to the sum 'originally determined' as that on which 'additional tax' was leviable. He computed it first by computing the relevant amount of distribution of dividends and then computing the amount on which additional tax was payable by taking 'total income' for the relevant year.
7. There is no dispute as to the figures. It is categorically found by the Tribunal in its order thus :
'The figures and the calculations are not disputed by the learned representative for the assessee, and indeed, it is not suggested, much less shown that there is another equally reasonable interpretation possible which would lead to a different result from the result arrived at by the Income-tax Officer in this order under rectification.'
8. Evidently, therefore, the assessee had no objection to the figures adopted, the computation made on the basis of those figures, the amount determined as the amount on which additional tax was further payable and, in short, the assessee had no objection to the approach made by the Income-tax Officer. It was not as if he pointed out a 'mistake' or a 'possible different approach' from a different perspective. In other words, he had no alternative case as to what else could have been the view of the section on the facts. Only where there is a possibility of the assessee contending that he has a different case or a different approach or that there is a debatable question, can there be an objection to the rectification issue.
9. Therefore, on the facts of the case, there is no scope for any contention that rectification proceedings cannot be taken. We see no reason to answer these questions as these questions do not arise from the order of the Tribunal.
10. A copy of this judgment shall be sent under the seal of this court and the signature of the Registrar to the Income-tax Appellate Tribunal, Ahmedabad Bench 'A'.