The main legal point established in the judgment is the requirement for clear evidence and material on record to establish a company's status as an industrial company, especially in the context of applying Section 154 of the Income Tax Act, 1961, for rectification.

( 1 ) THE income fax Appellate tribunal, Delhi has referred the following questions of law under section 256 (1) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for opinion to this Court:

"whether on the facts and in the circumstances of the case, the Tribunal has been correct in law in upholding the Commissioner of Income Tax (Appeals) order directing accepting of the assessees request made Under Section 154 of the I. T. Act, 1961 that it was an industrial undertaking and the mistake of its being treated as non-industrial one was apparent on the face of the record in respect of assessment years 1972-73 to 1975-76?"

( 2 ) BRIEFLY stated, the facts giving rise to the present reference are as follows:

( 3 ) THE reference relates to the assessment years 1972-73 76. The respondent is a private limited company. The original assessments were completed and revised in respect of all the four assessment years whereunder the rate of tax of 65% plus surcharge was applied. The respondent moved separate applications dated 16. 4. 1981 seeking rectification of the assessment orders on the ground that the rate of tax should be 55% plus surcharge as it was an industrial company. In the return filed by the respondent it had mentioned at page 2 of Part I that it was a trading company. Before the Income Tax Officer the respondent! took a stand that it was the duty of the assessing Officer to allow statutory benefits and there was no question taking advantage of its ignorance as to rights. The Income Tax Officer, however, rejected the applications under Section 151 of the Act and declined to treat the respondent as an industrial company in view of its own stand vis-a-vis the return filed. Feeling aggrieved by the orders the respondent preferred separate appeals before the Commissioner of Income Tax (Appeals) who had allowed the appeals by observing that the capacity in which the respondent was to be in assessed add the rate which was to be properly applied is not dependent upon the description given in the. return by it but really depended upon the correct nature of its operation. He further held that it is clear that in this case the respondent has been treated as an industrial company by the Appellate Authority and, in fact in the assessment order for the assessment year 1978-79, which was passed by the Income Tax officer on 24. 1 1979, the Income Tax Officer has himself treated the company as an industrial company and, in these circumstances, when a request was made by the respondent the Income tax Officer should have rectified the assessment and applied the correct rate and he cannot reject the application merely on the ground that in the return the respondent itself has not claimed the correct status. The Income Tax Officer was consequently directed to tax the company on the basis of that it was an industrial company. Feeling aggrieved by, the aforementioned order, the department preferred separate appeals before the Income Tax Appellate Tribunal. The Tribunal has upheld the order of the Commissioner of Income Tax (Appeals ). It has taken into consideration the fact that in respect of the assessment year 1978-79, the Income Tax Officer himself had treated the respondent as an industrial company and in respect of the assessment year 1979-80, the order dismissing the Revenues appeal wherein it has been treated as an industrial undertaking, has been accepted by the Department and no reference had been sought. It has also taken into consideration the fact that in respect of the assessment year 1977-78 the income Tax Officer himself, vide order dated 4. 9. 1980, had modified the lax payable by the, respondent @ 55% treating it to be an industrial company under Section 154 of the Act.

( 4 ) WE have heard Sri A. N. Mahajan learned Standing Counsel for the Revenue, and Sri Vikram gulati, learned counsel appearing for the respondent.

( 5 ) THE learned counsel for the Revenue submitted that the respondent itself had de