Rectification

Correction of arithmetical error — Nobody can be allowed to enrich itself unjustly and, in the matter of calculation, once an error is found, that can always be directed to be corrected, as held by DelHC in Insilco Limited v CIT — In favour of: The revenue; ITA No 179 of 2009.

The assessee was earlier given the TDS credit in AY 1992–1993 and refunded that amount along with the interest calculated under s 254A. When the AO was giving effect to the orders of the Tribunal and passed the orders under s 254/143(3) shifting the interest income from AY 1992–1993 to AY 1993–1994, it again calculated the interest on the amount which became refundable. However, the AO did not shift the TDS credit from AY 1992–1993 to AY 1993–1994 as well. While correcting this mistake and passing the rectification order (to which the assessee had no objection), the mistake committed by the AO was that he did not first adjust the refund of Rs 2,26,40,638 and interest under s 244A thereupon. Instead he charged interest under s 220(2).

 Though the charging of such interest was wrong, at the same time, the proper calculation would have been to first adjust from the refund of Rs 2,26,40,638 the credit of TDS and interest under s 220(2). Since this was not done, the Tribunal has only directed to recalculate the same by correcting the arithmetical error. Otherwise, the assessee would be benefited unreasonably by receiving more refund than what was legitimately due to it. It is a mere case of calculation, and once this calculation was brought to the notice of the Tribunal and detected by the Tribunal, it is totally misconceived on the part of the assessee to allege that, while giving these directions, the Tribunal has exceeded its jurisdiction. The Tribunal has given these directions to give complete effect to the orders passed in the quantum proceedings. It is trite law that nobody can be allowed to enrich itself unjustly and, in the matter of calculation, once an error is found, that can always be directed to be corrected. No such new case has been set up by the Tribunal and the Tribunal has not exceeded its jurisdiction.

Decided on: 11 July 2011.