JUDGMENT
N.K. Sud, J.
1. At the instance of the assessee, the ITAT, Amritsar Bench, Amritsar (for short “the Tribunal”), has referred the following questions of law arising out of its order dt. 18th March, 1994 for asst yr. 1978-79, for the opinion of this Court :
“1. Whether the Tribunal was correct in law in upholding the action of the ITO in initiating proceedings under Section 154 and holding that there was a mistake apparent on record which could be rectified under Section 154 of the IT Act ?
2. Whether, in view of the fact that the, amount received by the assessee-company by way of interest for the asst. yrs. 1979-80 and 1980-81 was not taxed, could it not be said that the ITO who initiated proceedings under Section 154 was of the opinion that the amount of interest is not taxable and could not be regarded as the income of the assessee-company for the instant assessment year ?”
2. To resolve this dispute, brief facts of the case may first be noticed.
During the asst. yr. 1978-79, a sum of Rs. 58,069 had been paid to the assessee by the IT Department on account of interest under Section 244(1A) of the IT Act, 1961 (for short “the Act”). However, while filing the return for the said year, this income was not included in the computation of income but the following footnote was given ;
“Please also consider the interest paid under Section 244(1A) by the IT Department during the year from 1st Feb., 1977 to 31st Jan., 1978 as no interest intimation has been given to the assessee about the amount of interest allowed on refunds adjusted.”
However, while making the assessment, the AO omitted to include this amount in the total income of the assessee due to an oversight. He, therefore, issued a notice under Section 154. of the Act for rectifying the mistake apparent from the record. In response thereto, the assessee in the written submissions stated that interest under Section 244(1A) of the Act is not taxable and similar addition made in asst. yr. 1980-81 was being challenged by the company in appeal. It was also stated that the issue is debatable and, therefore, the AO had no jurisdiction to invoke the provisions of Section 154 of the Act under which only mistakes apparent from the record could be rectified.
This explanation did not find favour with the AO who passed the order under Section 154 of the Act and added the interest received by the assessee to its total income. This action was upheld by the CIT(A) as well as the Tribunal as it was held that in view of the footnote given by the assessee itself, it was merely a case of an oversight on the part of the AO in not adding the same to the total income. It was, thus, held that it was clearly a case of mistake apparent from the record and the provisions of Section 154 of the Act had been correctly invoked.
3. After hearing the counsel for the parties and having perused the orders of the authorities below, we are satisfied that it is a clear case of a mistake apparent from the record which could have been rectified under Section 154 of the Act. The assessee itself in the computation of income had given the note requesting the AO to consider the payment of interest under Section 244(1A) of the Act which appears to have escaped the notice of the AO when he framed the original assessment. In view of this matter, there is possibly no question of this issue being termed as debatable.
Accordingly, we answer question No. 1 in the affirmative, i.e., against the assessee and in favour of the Revenue.
4. As far as question No. 2 is concerned, counsel for the petitioner fairly concedes that this question does not arise out of the order of the Tribunal. The same is, accordingly, returned unanswered.