assessee has questioned first appellate order on following grounds:- "(1) That on facts of case and in law order under section 154 of Income-tax Act, 1961 passed by learned Commissioner of Income-tax (Appeals), Alwar is bad in law, violative of principle of natural justice and void ab initio. (2) That learned Commissioner of Income-tax (Appeals), Alwar erred o n facts and in law in upholding action of learned Assessing Officer, rejecting petition filed by assessee company under section 154 with respect to issue of shares worth Rs. 53 lakhs to institutions against outstanding interest due to institutions which due to oversight remained as unclaimed as interest expenses under section 43B. (3) That learned Commissioner of Income-tax (Appeals), Alwar erred on facts and in law in stating that there is no material on record warranting such deduction and mistake is not apparent from face of record." 2. facts in brief are that assessee before Assessing Officer had moved application under section 154 of Income-tax Act pointing out therein that assessee company had issued shares worth Rs. 53 lakhs to institutions against outstanding interest due to them but because of oversight it did not claim this interest as deduction under section 43B of Income-tax Act in its return of income, and same may be allowed. Assessing Officer rejected this application mainly on basis that assessee had not made any claim in their return of income for deduction of aforesaid amount on account of interest payment under section 43B of Income-tax Act and since no claim was also made later on during proceedings under section 154 of Act, order of which was passed on 15-9-1998. aggrieved assessee went in first appeal but could not succeed. 3. In support of issue as to whether application under section 154 moved by assessee under aforesaid facts and circumstances was allowable or not raised in grounds of appeal, ld. A/R submits that assessee is public limited company and was engaged in manufacturing of tiles, which had taken loans from financial institutions. In year 1994-95, financial institutions converted outstanding interest of Rs. 53 lakhs due on loan into share capital as per Scheme sanctioned by BIFR. It is very much apparent from Balance Sheet wherein Note in Schedule-1 has been mentioned as "Rs. 53 lakhs has been converted into 5,30,000 equity shares of Rs. 10 each fully paid up out of outstanding funded interest of financial institutions during year as per Scheme sanctioned by BIFR". assessee by mistake has not claimed this aforesaid amount of Rs. 53 lakhs as interest paid under section 43B of Income-tax Act. assessee filed application for rectification under section 154 dated 17-11-1999, which was rejected by Assessing Officer vide his order dated 21-12-1999 on basis that there was no mistake apparent from record to make rectification under section 154 of Act. ld. CIT (A) has upheld same. ld. A/R submits that assessee company had also submitted its reply in writing vide letter dated 12-10-1996 with reference to hearing dated 4-9-1996 in response to notice under section 143(2) para 12, copy of which has been placed at page No. 4 of paper book, that major increase of Rs. 53 lakhs represents conversion of funded interest due to financial institutions into equity as per rehabilitation package sanctioned by BIFR. copy of this reply dated 12-10- 1996 has been placed at pages 5-8 of paper book. Assessing Officer did not raise any query or any further explanation to substantiate said claim of assessee. He submits that amount of funded interest of financial institutions as on 1-7-1987 pertains to earlier years amounting to Rs. 1,06,07,107 which was disallowed in assessment in assessment year 1989-90 in para 6 of assessment order, copy of which has been placed at pages 31 to 34 of paper book. He submits that out of above 50 per cent amounting to Rs. 53 lakhs was converted into shares of company. Therefore, material facts, evidence or documents which form back rock of claim of assessee for allowing deduction of interest under section 43B were before Income-tax authorities at time of assessment and did form part of records. ld. A/R submits that it was explained to Assessing Officer as well as to CIT(A) that it is true that due to oversight no claim was made in return of income nor any objection was raised at time of subsequent stage of passing order under section 154 in respect of issue of share worth Rs. 53 lakhs to financial institutions against outstanding funded interest due to them but as soon as mistake was detected, claim was made well within limitation period of 4 years for rectification of mistake as per provisions of section 154 of Income-tax Act, 1961. It was explained to lower authorities that it has been held in various cases that when materials were available in assessment record for grant of relief, application under section 154 was clearly maintainable and relief could not be refused merely on basis that assessee had omitted to claim same initially. learned A/R places reliance on following decisions:- Addl. CIT v. District Co-operative Bank Ltd. [1979] 119 ITR 142 (All.). Ramco Cement Distributors Co. (P.) Ltd. v. Dy. CTO 33 STC 180 (Mad.). CIT v. K.N. Oil Industries [1983] 142 ITR 131 (MP). West Bengal State Warehousing Corpn. v. CIT [1986] 157 ITR 149 (Cal.). CIT v. Mechanical Movement (P.) Ltd. [2001] 117 TAXMAN 356 (Delhi) (sic). ld. A/R submits that ld. CIT (A) while making observation that nothing has been mentioned in regard to its allowability in Annexure-2 and column No. 7 of audit report in 3 CD under section 44AB of Income-tax Act, only amount of interest on term loans mentioned in audit report is of Rs. 1,51,21,908, which has been disallowed under section 43B of Income-tax Act by assessee itself in their computation of income filed along with return, has ignored that there was no requirement in assessment year 1995-96 to show interest payment made in current year against outstanding of earlier year, which was disallowed in earlier year in 3 CD under section 44AB of Income- tax Act. As per clause 7 of 3 CD under section 44AB of Act, it was required to state, any tax, duty or other sum, (a) Debited to Profit and Loss account but not paid during previous year; (b) paid during previous year but allowed as deduction in any earlier year under section 43B. He submits that assessee has correctly shown amount under both clauses amounting to Rs. 1,51,21,908 and Rs. 0 respectively as per Annexure-2 of tax audit 3 CD under section 44AB of Income-tax Act. In case assessment order is inconsistent with proviso of Income-tax Act, then it has to be deemed to suffer from mistake apparent from record. Since conversion of interest due on loan into share capital is not allowed under section 43B as interest payment though same was not claimed by assessee due to oversight, therefore, order is inconsistent with proviso of Income-tax Act and, therefore, it has to be deemed to suffer from mistake apparent from record. As subject matter relating to computation of deduction under section 43B was subject matter of appeal before Assessing Authority and not matter relating to applicability of section 43B and nowhere in assessment order assessing authority has stated that matter is debatable, submits ld. A/R. ld. A/R has also refers page Nos. 46 to 53 of paper book i.e., sanctioned scheme of BIFR; page No. 42 of paper book i.e., copy of extract of Board Meeting held on 29- 12-1994, wherein as per scheme of BIFR it was resolved that sum of Rs. 53 lakhs out of outstanding funded interest of Rs. 1.06 lakhs due and payable to financial institutions be and is converted into equity shares of company. ld. A/R also refers para 2 of CBDT Circular No. 669, dated 25-10-1993 on subject of clarification regarding interpretation of section 43B of Income-tax Act intimating that Board has reconsidered matter and are of opinion that where sums referred to in first proviso under section 43B had, in fact, been paid on or before due dates mentioned therein, but evidence therefor had been omitted to be furnished along with return, Assessing Officers can entertain applications under section 154 for rectification of intimations under section 143(1)(a) or orders under section 143(3), as case may be, and decide same on merits. This circular has been placed at page No. 71 of paper book. ld. A/R while referring decision of Hon'ble Andhra Pradesh High Court in case of CIT v. Mahindra Nissan Allywin Ltd. [1998] 233 ITR 493, submits that even Tribunal is not debarred from giving effect to evidence of funding of balance outstanding amount which was not made available before Assessing Officer but it was produced before Tribunal. He also refers decision of Delhi Bench of Tribunal in case of Container Corpn. of India Ltd. v. Dy. CIT [2005] 92 ITD 333 wherein it has been held that jurisdiction under section 154 can be assumed if there is mistake apparent from record, it is immaterial as to whose mistake it is. 4. ld. D/R on other hand opposes aforesaid submissions and contentions of ld. A/R while placing reliance on orders of lower authorities. 5. We have considered arguments advanced by parties in view of orders of lower authorities, material available on record as well as decisions relied on by ld. A/R. It is not in dispute that assessee was not entitled to claim deduction under section 43B of Income-tax Act of Rs. 53 lakhs on account of interest payment which was due to financial institutions and under scheme of BIFR. It was paid through converting into shares issued to them @ Rs. 10 each. It has also not been denied by lower authorities that application under section 154 to allow aforesaid claim was moved before Assessing Officer well within prescribed time limitation of 4 years. Now question before us is as to whether there was any mistake in assessment order in not allowing aforesaid claim of assessee for which it was very much entitled to, within meaning of provisions laid down under section 154 of Act. lower authorities have rejected application under section 154 of Act moved by assessee for allowing deduction under section 43B of Act of payment of interest of Rs. 53 lakhs by it to financial institutions by way of converting same into issuance of shares to them, on basis that no such claim was made out by assessee in its return of income nor on subsequent occasion of passing of order under section 154 of Act by Assessing Officer any objection in this regard was raised, hence there is no mistake apparent in order to allow application under section 154 of Act. There is no dispute on facts that under some sanctioned scheme of BIFR, copy of which has been placed at page Nos. 46 to 53 of paper book, that company had resolved that sum of Rs. 53 lakhs out of outstanding funded interest of Rs. 106 lakhs due and payable to financial institutions was converted into equity of company, by passing resolution by Board of Directors of assessee company on 29-12-1994, copy whereof has been placed at page 40 of paper book. lower authorities have also not denied this contention of assessee that by way of Note in Schedule-I it has been clearly mentioned in Balance Sheet that Rs. 53 lakhs being interest on clearly mentioned in Balance Sheet that Rs. 53 lakhs being interest on term loan has been converted into equity shares of equal value, nor department has denied existence of reply dated 12-10-1996 of assessee in response to query raised in notice under section 143(2) placed at pages 5-8 of paper book, wherein in para 12 it has been replied that no expenditure was incurred for increase in share capital or share application money as there was no public issue of company's shares and that major increase of Rs. 53 lakhs representing conversion of funded interest due to IDBI, IFCI and ICICI into equity under rehabilitation package sanctioned by IDBI/BIFR. query No. 12 raised in this regard by department has been placed at page No. 4 of paper book. In CBDT Circular No. 669, dated 25- 10-1993 referred by ld. A/R, copy of which has been placed at page No. 15 of paper book filed on behalf of assessee on 17-5-2006, under subject "Interpretation of section 43B of Income-tax Act, 1961-clarification regarding" it has been made clear vide para No. 2 as under:- "The Board have reconsidered matter and are of opinion that where sums referred to in first proviso under section 43B had, in fact, been paid on or before due dates mentioned therein, but evidence therefor had been omitted to be furnished along with return, Assessing Officers can entertain applications under section 154 of rectification of intimations under section 143(1)(a) or orders under section 143(3), as case may be, and decide same on merits." Undisputedly, department is bound to follow Circular of CBDT. expression "Record" has to be construed and understood in context in which it appears and in context of expression apparent from record in section 154. 'Record' would mean record of entire proceeding of case including documents and materials produced by parties and taken on record by authorities, which were available at time of passing of order which i s subject matter of proceeding for rectification. It is admitted by assessing authority that assessee company filed its return of income with other statutory reports, accounts etc. Company has taken loans from financial institutions. In year 1994-95, financial institutions converted interest due on loan amounting to Rs. 53 lakhs into share capital. This has clearly been shown on face of Balance sheet by way of Note in Schedule- 1, where it was mentioned that Rs. 53 lakhs has been converted into 5,30,000 equity shares of Rs. 10 each fully paid up, out of outstanding, funded interest of financial institutions during year as per scheme sanctioned by BIFR, therefore mistake is apparent from record. As nowhere in assessment order assessing authority has stated that matter is debatable. When materials were available in assessment record for grant of relief, application under section 154 was clearly maintainable and relief could not be refused merely on ground that assessee had omitted to claim same originally. 6. decision of Hon'ble Supreme Court in T.S. Balaram, ITO v. Volkart Bros. [1971] 82 ITR 50 that mistake apparent on record must be obvious and patent mistake and not something which can be established by long drawn process of reasoning as points on which there may be concavely two options. decision on debatable point of law is not mistake apparent from record. Glaring and obvious mistake of law can be rectified under section 154 as mistake of law apparent from record. In case assessment order is inconsistent with proviso of Income-tax Act, then it has to be deemed to suffer from mistake apparent from record. 7. That matter relating to computation of deduction under section 43B was subject matter of appeal and not matter relating to applicability of section 43B, and nowhere in assessment order, Assessing Officer has stated that matter is debatable, therefore, same should be allowed under section 154. Where assessee omits to claim relief allowable to him under provisions of Act, he is entitled to get that relief. 8. In CIT v. K.N. Oil Industries [1983] 142 ITR 13 (MP) assessee was entitled to relief under section 35B but it was not claimed by him during original assessment proceedings. On appeal it was held that it is duty of taxing authorities to inform assessee that he is entitled to relief, if it is clear from material available in proceeding of assessment. That he is so entitled in this case, relief could be granted to assessee under section 154. similar decision was also rendered by Hon'ble Calcutta High Court in West Bengal State Warehousing Corpn. v. CIT [1986] 157 ITR 149. In this case assessee did not claim exemption of its income which came within purview of then section 89 now section 10(29) of 1961 Act and hence exempt either before Assessing Officer or appellate authority. Later he moved rectification application to claim such exemption. On appeal it was held that assessing authority had no justification to assess such income and it was obvious error, which ought to be rectified. 9. In case of CIT v. Smt. Aruna Luthra [2001] 252 ITR 76 (Punj. & Har.)(FB) it was held that provision of section 154 does not provide for rectification only when mistake in order is detected. mistake has to be on record of case. record would include everything on case file. returns, evidence and order are part of record. Thus even in case of assessment order under section 143(1), it has not to be assumed that there cannot be error apparent from record. As for decision in case of CIT v. Hero Cycles (P.) Ltd. [1997] 228 ITR 463 (SC) rule laid down by Their Lordships is that mistake can be of fact and law. However, rectifications can be made only when glaring mistake of fact or law becomes apparent from record. 10. Under these facts and circumstances of present case, we thus are o f view that non-allowing benefit for which assessee was very much entitled to well within provisions of law and it was also intimated to Assessing Officer by assessee vide its reply in answer to query raised by department during assessment proceedings and sufficient materials were there available on record of Assessing Officer, denial of same by Assessing Officer in assessment order is mistake apparent from record which needs rectification under section 154 of Act. It is established position of law that Assessing Officer is supposed to pass just assessment order, even allowing statutory benefit as per law for which assessee has not made any claim in its return of income or otherwise for which it is very much entitled to. only lapse on part of assessee as apparent from aforesaid fact of case, in our view is that it did not press its claim before Assessing Officer during assessment proceedings or subsequently on occasion when order under section 154 of Act was passed by the occasion when order under section 154 of Act was passed by Assessing Officer on 15-9-1998. These lapses, if any, on part of assessee cannot be treated as waiver by them to prohibit them to request for allowing same by moving application under section 154 of Act, specially when Assessing Officer himself was supposed to allow that benefits for which assessee was otherwise very much entitled to. In this regard we find support from decision of Delhi Bench of Tribunal in case of Container Corpn. of India Ltd. (supra) relied on by ld. A/R wherein after discussing several decisions of Hon'ble Courts including that of Anchor Pressings (P.) Ltd. v. CIT [1986] 161 ITR 159 (SC) and distinguishing same with decision of Hon'ble Supreme Court in case of CIT v. Mahendra Mills [2000] 243 ITR 562, it has been held that jurisdiction under section 154 can be assumed if there is mistake apparent from record. It is immaterial as to whose mistake it is. If on basis of material on record, assessee is entitled to relief which has remained to be allowed, then it would constitute mistake apparent from record and consequently, such relief cannot be denied merely because assessee omitted to claim by mistake. Hon'ble Supreme Court in case of Anchor Pressings (P.) Ltd. (supra) was pleased to hold that jurisdiction under section 154 of Act to rectify mistake is much wider than provided in Order XLVII, Rule 1 of CPC, 1908, and, therefore, relief could be allowed in rectification proceedings if all factual materials necessary for allowing relief were available on record and such relief could not be denied merely because assessee had omitted to claim same. We thus holding mistake, if any, on part of assessee to press its above claim before Assessing Officer during assessment proceedings or on subsequent occasion as bona fide one, hold further that such omission constituted mistake apparent from record which can be rectified under section 154 of Act. We, therefore, while setting aside orders of lower authorities in this regard, direct Assessing Officer to allow application under section 154 dated 17-11-1999 on its merits accordingly. issue raised in ground is thus decided in favour of assessee. 11. In result, grounds as well as appeal are allowed. *** LUSTRE TILES LTD. v. ADDITIONAL COMMISSIONER OF INCOME TAX