In Samtel India Ltd. v. Commissioner of Income-tax, Delhi,  25 taxmann.com 535 (SC), it has been held that In the instant case, it is the assessee who has moved its application for rectification under section 154. The application is not moved by the department. In the instant case, the Deputy Commissioner entertains the application of the assessee under section 154. He gives to the assessee the benefit of carry forward and set off of unabsorbed depreciation and brought forward losses of the earlier years while computing the gross total income. Section 154 finds place in Chapter XIV which deals with PROCEDURE FOR ASSESSMENT. Section 154 deals with rectification of mistake apparent from the record. If one examines the scheme of Chapter XIV, it becomes clear that the said Chapter not only deals with assessment and re-assessment, it also deals with re computation. The object of re-computation is to assess (quantify) the correct taxable income. Such re-computation of a correct taxable income is a matter of procedure. In order to arrive at a correct amount of taxable income, the Deputy Commissioner had to compute deduction under section 80HHC(3) which had to be deducted from the gross total income. In the instant case, assessee had made a claim for computation of deduction under section 80HHC(3). Consequently, the Deputy Commissioner had to give effect in toto the orders passed by the appellate authority for earlier years as the appellate authority had directed the department to give benefit to the assessee of carrying forward and setting off losses/unabsorbed depreciation in the computation of taxable income. In the assessment year in question, there was taxable income of Rs. 5,49,45,200 which after set off stood reduced to Rs. 3,62,01,940 (gross total income) before Chapter VI-A deduction. Therefore, Deputy Commissioner had to give the consequential adjustment while computing deduction under section 80HHC(3). Without such consequential adjustment, it was not possible to arrive at the correct taxable income. The said order did not contain two rectifications, as suggested by the assessee. If the argument of the assessee was to be accepted, it would result in escapement of income for the simple reason that while the taxable income on account of set off would stand reduced from Rs. 5,49,45,200 to Rs. 3,62,01,940 (gross total income), the Chapter VI-A deduction, according to the assessee, ought not to be restricted to Rs. 40,08,528/- as against Rs. 1,14,45,297 allowed in the original assessment order dated 29-1-1999. [Para 4]
For the above reasons, the appeal of the assessee was to be dismissed.