JUDGMENT [ENTITY], J.
1. The petitioner, by filing this petition under [SECTION] of the [ACT], is challenging the correctness, propriety and validity of the orders passed by the Income-tax Officer, Khar-gone, for the assessment years 1978-79, 1979-80 and 1980-81, annexures D, E and F, respectively, and the revisional order, annexure-I, passed by the Commissioner of Income-tax, Bhopal.
2. The brief facts material for deciding the said petition are mentioned hereinbelow :
The petitioner is a partnership firm, duly registered under the [ACT], having Shri [ENTITY], [ENTITY], [ENTITY] and Shri [ENTITY] as its partners. Originally, it was a proprietorship concern having its registered office at Khargone, but, later on the same has been transferred to Barwaha, wherefrom the firm is presently carrying on its business.
3. The petitioner is engaged in the business of manufacturing sagol, lime, clay and other allied items. The petitioner firm owns a plant situated at Barwaha, where its manufacturing process is being carried on. The petitioner maintains accounts from Diwali to Diwali. The petitioner commenced its business in the accounting year relevant to the assessment year 1978-79. In the said accounting year, the petitioner filed its return for the year 1978-79. The petitioner claimed deductions under [SECTION], [SECTION] and [SECTION] of the [ACT] (hereinafter referred to as "the Act"). The aforesaid deductions claimed by the petitioner were allowed by the Income-tax Officer, vide order dated January 30, 1980, for the assessment year 1978-79.
4. The petitioner continued to carry on its business and filed its return in time for the next assessment years 1979-80 and 1980-81 and claimed similar deductions. These deductions were also allowed by the Income-tax Officer on March 30, 1982, and March 18, 1983, respectively. Just after the expiry of two months from the date of passing of the said order, notice under [SECTION] of the Act, was issued to the petitioner on May 11, 1983, calling upon the petitioner to file a reply to it. Even though no reply to the same was submitted, the matter was opposed and argued before him.
5. The Income-tax Officer/respondent No. 2, then, passed three orders for three assessment years, against the petitioner. The Income-tax Officer has mainly proceeded on the assumption, that, since, despite granting time, no reply was filed by the petitioner, thus, it should be presumed that the petitioner has nothing to say and the contents of the notice should be admitted.
6. The petitioner's contention is that the only order of rectification, for the year 1979-80 was served on the petitioner, thus, the petitioner preferred an appeal against the said order. The other orders had not been served till then, thus, the appeals could not be preferred against those orders. Against the said rectification order of assessment year 1979-80, the appeal was heard and the rectification order, as also the notice issued under [SECTION] of the Act were quashed by the appellate authority.
7. It is not in dispute that the said order has attained finality. Subsequently, the rectification orders for the remaining financial years were received by the petitioner. The petitioner, instead of preferring appeals, against the said orders, preferred revisions, under [SECTION] of the Act, before the Commissioner. Both the said revisions were heard together and have been disposed of by a common order (annexure-I). The revisions have been dismissed and the order passed by the Income-tax Officer has been affirmed.
8. The petitioner, now, challenges the aforesaid orders. The petitioner has submitted that under [SECTION] of the Act, a mistake has to be apparent and there should not be any room for doubt, and only then powers under [SECTION] could be exercised. It has also been submitted, that on scrutiny of the case, if it is found that it is a matter of debate and two views are possible, then, it shall not be legally possible to review the said order on this ground, under the garb of [SECTION] of the Act.
9. The contention is, that any decision on a debatable point of law, cannot, by any stretch of imagination, be said to be a mistake apparent on the face of the record.
10. On facts, it has been submitted, that the said relief had been granted to the petitioner, for one financial year whereas without assigning just, proper and cogent cause, was subsequently taken up for other financial years in rectification orders, issued under [SECTION] of the Act, which was wholly illegal and impermissible under law. According to him, the impugned orders deserve to be quashed, as the same do not show any application of mind.
11. To advance the contention in this regard, the petitioner has placed reliance on the following judgments reported in [PRECEDENT] ; [PRECEDENT] ; [PRECEDENT], [PRECEDENT] ; [PRECEDENT] ; [PRECEDENT] ; [PRECEDENT] ; [PRECEDENT] and [PRECEDENT].
12. The respondents have submitted reply in oppugnation.
13. It has not been disputed that for earlier financial years, deductions as claimed by the petitioner, under [SECTION], [SECTION] and [SECTION] of the Act were allowed. It has been submitted that the petitioner has sought time to file a reply to the notice, under [SECTION] of the Act, but did not file any reply. It has further been mentioned that respondent No. 2 has exclusive power conferred on him under [SECTION] of the Act, to rectify any mistake and he has acted within the ambit and scope of the said power. Their contention is that this petition does not call for any interference and deserves dismissal.
14. Learned counsel for respondents, Shri [ENTITY] has placed reliance on the following judgments (i) [PRECEDENT] (ii) [PRECEDENT] ; (iii) [PRECEDENT] (iv) [PRECEDENT] ; (v) [PRECEDENT].
15. In the light of the controversy involved, I have heard counsel for the parties at length and perused the record.
16. The question that arises for consideration is, whether the error is apparent on the face of the record, warranting action under [SECTION] of the Act.
17. Before dealing with the aforesaid question, it would be apt to first understand the different provisions of the Act, under which the petitioner had claimed deductions. The relevant portion of [SECTION] reads as under :
"[SECTION]. Investment allowance. (1) In respect of a ship or an aircraft or machinery or plant specified in Sub-section (2), which is owned by the assessee and is wholly used for the purposes of the business carried on by him, there shall, in accordance with and subject to the provisions of this section, be allowed a deduction, in respect of the previous year in which the ship or aircraft was acquired or the machinery or plant was installed or, if the ship, aircraft, machinery or plant is first put to use in the immediately succeeding previous year, then, in respect of that previous year, of a sum by way of investment allowance equal to twenty-five per cent. of the actual cost of the ship, aircraft, machinery or plant to the assessee :
Provided that in respect of a ship or an aircraft or machinery or plant specified in Sub-section (8B), this sub-hall have effect as if for the words 'twenty-five per cent.', the words 'twenty per cent.' had been substituted :
Provided further that no deduction shall be allowed under this section in respect of-
(a) any machinery or plant installed in any office premises or any residential accommodation, including any accommodation in the nature of a guest house ;
(b) any office appliances or road transport vehicles ;
(c) any ship, machinery or plant in respect of which the deduction by way of development rebate is allowable under [SECTION] ; and
(d) any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head 'Profits and gains of business or profession' of any one previous year.
Explanation. FOR the purposes of this sub-section, 'actual cost' means the actual cost of the ship, aircraft, machinery or plant to the assessee as reduced by that part of such cost which has been met out of the amount released to the assessee under [SECTION].
(2) The ship or aircraft or machinery or plant referred to in Sub-section (1) shall be the following, namely :
(a) a new ship or new aircraft acquired after the 31st day of March, 1976, by an assessee engaged in the business of operation of ships or aircraft ;
(b) any new machinery or plant installed after the 31st day of March, 1976-
(i) for the purposes of business of generation or distribution of electricity or any other form of power ; or
(ii) in a small-scale industrial undertaking for the purposes of business of manufacture or production of any article of thing ; or
(iii) in any other industrial undertaking for the purposes of business of construction, manufacture or production of any article or thing, not being an article or, thing specified in the list in the Eleventh Schedule :
Provided that nothing contained in Clauses (a) and (b) shall apply in relation to,
(i) a new ship or new aircraft acquired, or (ii) any new machinery or plant installed after the 31st day of March, 1987, but before the 1st day of April, 1988, unless such ship or aircraft is acquired or such machinery or plant is installed in the circumstances specified in Clause (a) of Sub-section (8B) and the assessee furnishes evidence to the satisfaction of the Assessing Officer as specified in that clause ;
(c) any new machinery or plant installed after the 31st day of March, 1983, but before the 1st day of April, 1987, for the purposes of business of repairs to ocean-going vessels or other powered craft if the business is carried on by an Indian company and the business so carried on is for the time being approved for the purposes of this clause by the Central Government."
18. [SECTION], relevant for the purposes of this case, reads as under :
" 80HH. (1) Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking, or the business of a hotel, to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to twenty per cent. thereof.
(2) This section applies to any industrial undertaking which fulfils all the following conditions, namely :
(i) it has begun or begins to manufacture or produce articles after the 31st day of December, 1970, but before the 1st day of April, 1990, in any backward area ;
(ii) it is not formed by the splitting up, or the reconstruction, of a business already in existence in any backward area :
Provided that this condition shall not apply in respect of any industrial undertaking which is formed as a result of the re-establish-
ment, reconstruction or revival by the assessee of the business of any such industrial undertaking as is referred to in [SECTION], in the circumstances and within the period specified in that section ;
(iii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose in any backward area ;
(iv) it employs ten or more workers in a manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power."
19. Now, coming to the deduction as claimed under [SECTION], the relevant part of the section is reproduced hereunder :
"[SECTION]. (1) Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking or a ship or the business of a hotel, to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains (reduced by the deduction, if any, admissible to the assessee under [SECTION] or [SECTION]) of so much of the amount thereof as does not exceed the amount calculated at the rate of six per cent. per annum on the capital employed in the industrial undertaking or ship or business of the hotel, as the case may be, computed in the manner specified in Sub-section (1A) in respect of the previous year relevant to the assessment year (the amount calculated as aforesaid being hereafter, in this section, referred to as the relevant amount of capital employed during the previous year) :
Provided that in relation to the profits and gains derived by an assessee, being a company, from an industrial undertaking which begins to manufacture or produce articles or to operate its cold storage plant or plants after the 31st day of March, 1976, or from a ship which is first brought into use after that date, or from the business of a hotel which starts functioning after that date, the provisions of this sub-section shall have effect as if for the words 'six per cent.', the words 'seven and a half per cent.' had been substituted.
(1A) (I) For the purposes of this section, the capital employed in an industrial undertaking or the business of a hotel shall, except as otherwise expressly provided in this section, be computed in accordance with Clauses (II) to (IV) and the capital employed in a ship shall be computed in accordance with Clause (V).
(II) The aggregate of the amounts representing the values of the assets as on the first day of the computation period of the undertaking or of the business of the hotel to which this section applies shall first be ascertained in the following manner :
(i) in the case of assets entitled to depreciation, their written down value ;
(ii) in the case of assets acquired by purchase and not entitled to depreciation, their actual cost to the assessee ;
(iii) in the case of assets acquired otherwise than by purchase and not entitled to depreciation, the value of the assets when they became assets of the business ;
(iv) in the case of assets, being debts due to the person carrying on the business, the nominal amount of those debts ;
(v) in the case of assets, being cash in hand or bank, the amount thereof."
20. As has been mentioned above, for the purposes of deciding this question, it would be apt to look into the relevant portion of [SECTION] of the Act so as to understand the ambit and scope of the said section and to ascertain, whether the authorities concerned have acted within the powers conferred on them. Relevant [SECTION], as it existed then, is reproduced hereinbelow :
"154. (1) With a view to rectifying any mistake apparent from the record (a) the Income-tax Officer may amend any order of assessment or of refund or any other order passed by him ; . . ."
21. From a plain reading of the aforesaid provision, it is crystal clear that for invoking jurisdiction conferred on the authorities by this section, a mistake has to be apparent from the record. Thus, all mistakes that might be committed by the authorities in passing the orders, shall not amount to mistakes apparent from the record.
22. From a long catena of cases, which have been cited by the respective parties, it is now too well settled that any question which can be said to be debatable would not fall in the category of mistake apparent from the record.
23. In view of the fact that this legal position is no more in dispute, it is not necessary for me to deal with each and every authority individually, cited by the respective parties.
24. In fact, the question involved in this petition has been answered recently by the apex court in [PRECEDENT]. The Supreme Court has held, that for invoking the jurisdiction under [SECTION] of the Act, for exercising power of rectification of mistake, it is a condition precedent that the mistake must be glaring and obvious. If the question is debatable, then, it cannot be said to be a proper exercise by the authorities concerned.
25. In the aforesaid judgment, the Supreme Court has held elegantly as under (headnote) :
". . . that there was no point in sending the matter to the High Court to deal with the question raised at this stage. The question would be treated as referred to the Supreme Court. The dispute raised a mixed question of fact and law. The Tribunal was in error in upholding the assessee's claim for weighted deduction. Rectification under [SECTION] can only be made when a glaring mistake of fact or law committed by the officer passing the order becomes apparent from the record. Rectification is not possible if the question is debatable. Moreover a point which was not examined on facts or in law cannot be dealt with as a mistake apparent from the record."
26. This High Court has also taken similar view in most of the judgments pronounced on this point. The consistent view of this court has been that the mistake has to be glaring, obvious and apparent from the record.
27. A useful reference can be made to a judgment of this court in [PRECEDENT] wherein a similar question had arisen for consideration of the Division Bench. It has been held, that under [SECTION] of the Act, the authority could rectify a mistake which was apparent from the record.
28. In view of the aforesaid facts and circumstances, I find that the Income-tax Officer was not justified in taking up the cases under [SECTION] of the Act and passing the impugned orders. The order passed by the revisional authority is also erroneous, bad and illegal.
29. Thus, I hereby quash the impugned orders (annexures D, E, F and I) and maintain the earlier orders passed by Income-tax Officer, for the relevant assessment years.
30. The petition is, therefore, allowed. In the facts and circumstances of the case, I leave the parties to bear their own respective costs. The security amount, if any, be refunded back to the petitioner, after its due verification.