Mere change of opinion doesn’t justify the order of rectification of mistake by AO u/s 154 (of Income Tax Act, 1961)

Held During the course of assessment the claims were duly scrutinized, considered and allowed in respect of expenses claimed both under the head of advertisement in newspapers and the scheme in which the presentation articles were given to the stockiest and dealers claiming the expenditure as business expenditure. For both these expenses the A.O. was aware of the provisions of Section 37(3A) (of Income Tax Act, 1961), which existed in the statutory book at that time. There was no concealment, which came to the notice of the A.O. after the assessment was complete. The expenditure of Rs.68,425/- on the advertisement in newspapers and the expenditure of Rs.1,70,699/- for presentation articles was business expenditure or sales promotions, was very much within the knowledge of the A.O. In the order under Section 154 (of Income Tax Act, 1961) the reasons given for disallowing the expenses of Rs.68,425/- on the ground that advertisement was not made in small newspapers and further disallowing Rs.1,70,699/- for the purposes of Section 37(3A) (of Income Tax Act, 1961) on the ground that the presentation articles were given under the scheme to the stockiest and not to the consumers, was a debatable issue. The A.O. had to go through the circulation of newspapers, to arrive at finding whether these were small newspapers and further whether the presentation articles in the scheme were given to the stockiest and dealers as business promotion, and not to the consumers as sales promotion was arrived at after a discussion, which was further elaborated by the Tribunal. We, therefore, find that on the ratio of the principles laid down in MEPCO Industries Ltd. (Supra), on both the counts the order under Section 154 (of Income Tax Act, 1961) was not made on any mistake apparent from the record, which was a rectifiable mistake, but was change of opinion by which the department had to adopt the reasoning on which two opinions should be possible. (Para 14) The questions nos.(i), (ii) and (iii) in the reference are thus decided in favour of the assessee and against the revenue. (Para 15)