Case Law Details
IN THE ITAT DELHI BENCH
Smt. Pushpa Agarwal
Versus
Income-tax Officer
M.A. No. 57 (Delhi) of 2012
IT Appeal No. 767 (Delhi) of 2007
[Assessment year 1997-98]
October 12, 2012
ORDER
U.B.S. Bedi, Judicial Member – By means of this application, the assessee seeks to get recalled the order of this bench in I.T.A. No.767/Del./2007 relevant to assessment year 1997-98 on the ground that there is mistake in mentioning the date of letter of the assessee as 28.2.2004 whereas correct date is 28.9.2004 which was first letter of the assessee in the re-assessment proceedings, so it vitiates the re-assessment proceedings being beyond time limit prescribed of six years and further affixture on wrong address also renders re-assessment being without jurisdiction. Therefore, assessee prayed for recalling the order of the Tribunal to be decided afresh after giving due opportunity to the assessee by re-considering the entire matter.
2. Ld. Counsel for the assessee while reiterating the submissions as made in the application, has submitted that through letter dated 28.9.2004, Ld. A.R. of the assessee gave date of filing of the return with a request to treat the same as having been filed in response to notice u/s 148 of the Act. This bench has wrongly noted the date of the letter of the assessee as 28.2.2004 instead of 28.9.2004 when assessee has not filed any such letter on 28.2.2004, so initiation is beyond prescribed time, therefore, there is an apparent mistake in the order passed by the Tribunal which gives it cause for rectification. Therefore, it was prayed for recalling the order of the Tribunal for re-hearing of the matter and deciding the appeal afresh.
3. Ld. DR strongly opposed the move of the assessee by stating that date of reply of Ld.AR of the assessee has been correctly recorded by this bench as same is mentioned by the Assessing Officer in assessment order at page 1 para.1 of assessment order (at 2nd line from bottom), so there is no mistake in this regard. Otherwise also, it does not effect the reassessment as re-assessment proceedings were initiated by serving notice u/s 148 of the Act, through affixture on 1.10.2003 which is within six years, and moreover reply of the assessee is in response to notice u/s 142(1) dated 6.9.2004, which is not the notice conferring jurisdiction for initiation of reassessment proceedings. That apart, the issue of reassessment has elaborately been discussed and deliberated by this bench at length touching all relevant points and neither there is any mistake nor omission having been pointed out, and in case, application of the assessee is accepted, it would amount to review of the order which, as per decided cases, is not permissible under the law. So, it was urged for dismissal of the application of the assessee.
4. We have heard both the sides, considered the material on record and before reverting to facts, it would be apt to consider the relevant provisions of law. relating to section 254(2). A bare look at section 254(2) of the Act, which deals with rectification, makes it amply clear that a ‘mistake apparent from the record’ is rectifiable. In order to attract the application of section 254(2), a mistake must exist and the same must be apparent from the record. The power to rectify the mistake, however, does not cover cases where a revision or review of the order is intended. ‘Mistake’ means to take or understand wrongly or inaccurately; to make an error in interpreting, it is an error; a fault, a misunderstanding, a misconception. ‘Apparent’ means visible; capable of being seen; easily seen; obvious; plain. A mistake which can be rectified under section 254(2) is one which is patent, which is obvious and whose discovery is not dependent on argument or elaboration. The language used in section 254(2) is permissible where it is brought to the notice of the Tribunal that there is any mistake apparent from the record. Accordingly, the amendment of an order does not mean obliteration of the order originally passed and its substitution by a new order which is not permissible under the provisions of section 254(2). Further, where an error is far from self evident, it ceases to be an apparent error. It is no doubt true that a mistake capable of being rectified under section 254(2) is not confined to clerical or arithmetical mistakes. On the other hand, it does not cover any mistake which may be discovered by a complicated process of investigation, argument or proof. As observed by the Supreme Court in Master Construction Co. (P.) Ltd. v. State of Orissa [1966] 17 STC 360, an error which is apparent on the face of the record should be one which is not an error which depends for its discovery on elaborate arguments on questions of fact or law. A similar view was also expressed in Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tirumale AIR 1960 SC 137. It is to be noted that the language used in Order 47, Rule 1 of the Code of Civil Procedure, 1908 is different from the language used in section 254(2) of the Act. Power is given to various authorities to rectify any ‘mistake apparent from the record’ is undoubtedly not more than that of the High Court to entertain a writ petition on the basis of ‘an error apparent on the face of the record’. Mistake is an ordinary word, but in taxation laws, it has a special significance. It is not an arithmetical or clerical error alone that comes within its purview. It comprehends errors which, after a judicious probe into the record from which it is supposed to emanate, are discerned. The word ‘mistake’ is inherently indefinite in scope, as what may be a mistake for one may not be one for another. It is mostly subjective and the dividing line in border areas is thin and indiscernible. It is something which a duly and judiciously instructed mind can find out from the record. In order to attract the power to rectify under section 254(2) it is not sufficient if there is merely a mistake in the orders sought to be rectified. The mistake to be rectified must be one apparent from the record. A decision on the debatable point of law or undisputed question of fact is not a mistake apparent from the record. The plain meaning of the word ‘apparent’ is that it must be something which appears to be so ex facie and it is in capable of argument or debate. It is therefore, follows that a decision on a debatable point of law or fact or failure to apply the law to a set of facts which remains to be investigated cannot be corrected by way of rectification.
5. As is apparent from the discussion held in the preceding paragraphs, that a rectification application can lie only with regard to an error on the face of the record which has not emerged from the material on record and moreover, the assessee has not been able to point out any apparent mistake in the order passed by the Tribunal and in case application of the assessee is accepted, it would tantamount to review of the order of the Tribunal, as has rightly been pleaded by the ld. DR, that reviewing of the order of the Tribunal is not permissible and for that purpose useful reference can be made to the following decisions.
5.1 The Hon’ble Calcutta High Court in the case of CIT v. Gokul Chand Agarwal [1993] 202 ITR 14/68 Taxman 23 has held as under:
“Section 254(2) of the Income Tax Act, 1961, empowers the Tribunal to amend its order passed under section 254(1) to rectify any mistake apparent from the record either suo moto or on an application. The jurisdiction of the Tribunal to amend its order thus depends on whether or not there is a mistake apparent from the record. If, in its order, there is no mistake which is patent and obvious on the basis of the record, the exercise of the jurisdiction by the Tribunal under section 254(2) will be illegal and improper. An oversight of a fact cannot constitute an apparent mistake rectifiable under section 254(2). This might, at the worst, lead to perversity of the order for which the remedy available to the assessee is not under section 254(2) but a reference proceeding under section 256. The normal rule is that the remedy by way of review is a creature of the statute and, unless clothed with such power by the statute, no authority can exercise the power. Review proceedings imply proceedings where a party, as of right, can apply for reconsideration of the matter, already decided upon, after a fresh hearing on the merits o the controversy between the parties. Such remedy is certainly not provided by the Income Tax Act, 1961, in respect of proceedings before the Tribunal.”
5.2 In similar situation, while dealing with the rectification, the Hon’ble Andhra Pradesh High Court in the case of CIT v. ITAT [1994] 206 ITR 126 has held as under:
“The appellate Tribunal, being a creature of the statute, has to confine itself in the exercise of its jurisdiction to the enabling or empowering terms of the statute. It has no inherent power. Even otherwise, in cases where specific provision delineates the powers of the court or Tribunal, it cannot draw upon its assumed inherent jurisdiction and pass orders as it pleases. The power of rectification which is specifically conferred on the Tribunal has to be exercised in terms of that provision. It cannot be enlarged on any assumption that the Tribunal has got an inherent power of rectification or review or revision. It is axiomatic that such power of review or revision has to be specifically conferred, it cannot be inferred. Unless there is a mistake apparent from the record in the sense of patent, obvious and clear error or mistake, the Tribunal cannot recall its previous order. If the error or mistake is one which could be established only by long drawn arguments or by a process of investigation and research, it is not a mistake apparent from the record.”
5.3 Further, the Hon’ble Supreme Court in the case of CIT v. Karam Chand Thapar & Bros. (P.) Ltd. [1989] 176 ITR 535/43 Taxman 45 has held as under:
“Appellate Tribunal – Duty to Consider Cumulative Effect of Circumstances and totality of Facts – No need to state so in appellate order specifically – Income tax Act, 1961, Sec. 254
Further it was held as under:
“It is equally well settled that the decision of the Tribunal has not to be scrutinized sentence by sentence merely to find out whether all facts have been set out in detail by the Tribunal or whether some incidental fact which appears on the record has not been noticed by the Tribunal in its judgment. If the court, on a fair reading of the judgment of the Tribunal, finds that it has taken into account all relevant material and has not taken into account any irrelevant material in basing its conclusions, the decision of the Tribunal is not liable to be interfered with, unless, of course, the conclusions arrived at by the Tribunal are perverse.
It is not necessary for the Tribunal to state in its judgement specifically or in express words that it has taken into account the cumulative effect of the circumstances or has considered the totality of the facts, as if that were a magic formula; if the judgment of the tribunal shows that it has, in fact, done so, there is no reason to interfere with the decision of the Tribunal.
Similarly the Bombay High Court in the case of CIT v. Ramesh Electric and Trading Co. (203 ITR 497)
………….It is an accepted position that the Appellate Tribunal does not have any power to review its own orders under the provisions of the Act. The only power which the Tribunal possesses is to rectify any mistake in its own order which is apparent from the record…….. The power of rectification under section 254(2) can be exercised only when the mistake which is sought to be rectified s an obvious and patent mistake which is apparent from the record and not a mistake which required to be established by arguments and a long drawn process of reasoning on points on which there may conceivably be two opinion. Failure of the Tribunal to consider an argument advanced by either party for arriving at a conclusion is not an error apparent on the record, although it may be an error of judgments……………………”
5.4 We also draw support here from Hon’ble Madras High Court decision in T.C.(A) No. 156 of 2006 dated 21.08.2007 in the case of CIT v. Tamil Nadu Small Industries Development Corpn. Ltd. wherein the Hon’ble High Court held as under:-
“The Tribunal has no power to review its order. When the Tribunal has already decided an issue by applying its mind against the assessee, the same cannot be rectified under Section 254 (2) of the Act. There was no necessity whatsoever on the part of the Tribunal to review its own order. Even after the examination of the judgments of the Tribunal, we could not find a single reason in the whole order as to how the Tribunal is justified and for what reasons. There is no apparent error on the face of the record and thereby the Tribunal sat as an appellate authority over its own order. It is completely impermissible and the Tribunal has traveled out of its jurisdiction to allow a Miscellaneous Petition in the name of reviewing its own order”.
“In the present case, in the guise of rectification, the Tribunal reviewed its earlier order and allowed the Miscellaneous Petition which is not in accordance with law. Section 254(2) of the Act does not contemplate rehearing of the appeal for a fresh disposal and doing so, would obliterate the distinction between the power to rectify mistakes and power to review the order made by the Tribunal. The scope and ambit of the application of Section 254(2) is limited and narrow. It is restricted to rectification of mistakes apparent from the record. Recalling the order obviously would mean passing of a fresh order. Recalling of the order is not permissible under Section 254(2) of the Act. Only glaring and any mistake apparent on the face of the record alone can be rectified and hence anything debatable cannot be a subject matter of rectification.”
5.5 Further, we place reliance upon Hon’ble Delhi High Court exposition on the scope of rectification u/s 254(2) as reported in the case of Ras Bihari Bansal v. CIT [2007] 293 ITR 365/[2008] 170 Taxman 31:-
“Section 254 of the Income Tax Act, 1961, enables the concerned authority to rectify any “mistake apparent from the record”. It is well settled that an oversight of a fact cannot constitute an apparent mistake rectifiable under this section. Similarly, failure of the Tribunal to consider an argument advanced by either party for arriving at a conclusion, is not an error apparent on the record, although it may be an error of judgment. The mere fact that the Tribunal had not allowed a deduction, even if the conclusion is wrong, will be no ground for moving an application under section 254(2) of the Act. Further, in the garb of an application for rectification, the assessee cannot be permitted to reopen and re-argue the whole matter, which is beyond the scope of the section.”
Therefore, in view of the facts, circumstances, in the light of ratio of decisions cited and discussion as held above, we do not find any substance in the application of the assessee and dismiss the same being devoid of any merits.
6. In the result, the Miscellaneous application of the assessee is dismissed.
