Original assessment order u/s 143(3) allowing the claim of deduction u/s 80-IA-Application for rectification u/s 154 of the Act filed by the assessee for granting credit for the TDS being the mistake apparent from records-Disposed off by the AO granting credit for the TDS without disturbing the claim u/s 80-IA-Assessee filed the appeal before the CIT (Appeals) against other disallowances made u/s 143(3) and the same has been disposed off by the CIT (Appeals) with substantial relief-At the time of the passing the order to give effect to the CIT (Appeals)’s order, the AO issued notice u/s 154 proposing to disallow the deduction u/s 80-IA-While not considering the reply of the assessee, the AO passed the order giving effect to the CIT (Appeals)’s order with the disallowance of deduction u/s 80-IA, which had already been allowed u/s 143(3) and subsequent to the order passed u/s 154.

Once an order u/s 154 is passed for the rectification of the apparent mistake in the order u/s 143(3) of the Act, the rectification order u/s 154 could not be considered to be an independent proceeding, but it would be termed as the original assessment order modified/rectified. Hence, the time limit for rectification to deny deduction u/s 80-IA should be reckoned only from the date of original assessment order u/s 143(3) and therefore, the AO’s order giving effect to the CIT (Appeals)’s order with an attempt to deny the deduction u/s 80-IA of the Act in the garb of apparent mistake, is clearly barred by the limitation as provided u/s 154(7) of the Act. Even on merits, the assessee is eligible to deduction u/s 80-IA r.w. Section 80-IA(12A) of the Act.(AY. 2010-11)