Case Law Details
RELEVANT PARAGRAPH
It is evident that both the issues raised by the assessee in the present miscellaneous application were decided by the Bench, on merit and having regard to the rival submissions and case laws relied upon by the assessee, in respect of relevant issue, as discussed earlier. Thus, both the issues are debatable and susptible to different opinions. These issues decided on merit after appreciation of the facts of the case, as highlighted in the impugned appellate order of the Bench cannot be construed as suffering from patent, self evident, glaring and mistake apparent from the record, as contemplated u/s. 254(2) of the Act. This view is further fortified by the ensuring discussion, on the scope of provisions of section 25492) of the Act.
8. In the case of ACIT vs. Saurashtra Kutch Stock Exchange Ltd. 305 1TR 227 (SC). Hon’ble Apex Court judiciously defined the scope of the provision of section 254(2} of the Ad as under.-
“An error cannot be said to be apparent on the fact of the record if one has to travel beyond the record to see whether the judgment is correct or not. An error apparent on the face of the record means an error which strikes the eye on merely looking at it and does not need long-drawn-out process of reasoning on points where there may conceivably be two opinions, such an error should not require any extraneous matter to show its incorrectness. To put it differently, it should be so manifest and clear that no Court would permit it to remain on record. If the view accepted by the Court in the original judgment is one of the possible views, the case cannot be said to be covered by an error apparent on the face of the record”.
Thus, the issue raised by the assessee in the present Miscellaneous Application fails beyond the purview of section 254(2) of the Act, having regard to the ratio of the Hon’ble Apex Court reproduced above.
8.1 Similarly, the factual and legal matrix of the present Miscellaneous Application falls beyond the purview of section 254(2) of the Act, as Is evident from the perusal of the ratio of the Jurisdictional High Court, in the case of Ramesh Electric and Trading Co.,203 ITR 497 (Bom). The relevant and operative part of the decision of the Jurisdictional High Court is reproduced hereunder;-
“Under section 254(2) of the Income-tax Act, 1961, the Appellate Tribunal may, “with a view to rectifying any mistake apparent from the record”, amend any order passed by it under sub-section (1) within the time prescribed therein. 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. This is merely a power of amending its order. The power of rectification under section 254(2) can be exercised only when the mistake which is sought to be rectified is an obvious and patent mistake which is apparent from the record, and not a mistake which requires to be established by arguments and a long drawn process of reasoning on points on which there may conceivably be two opinions. 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 Tribunal cannot, in the exercise of its power of rectification, look into some other circumstances which would support or not support its conclusion.”
8.2 Further, analysis and discussions on the Jurisdiction of the Tribunal u/s. 254 of the Act would reveal that both issues raised by the assessee, in the said Miscellaneous Application, as discussed above, do not fall under the statutory phrase ‘any mistake apparent from record’. The Tribunal does not enjoy jurisdiction u/s. 254(2) of the Act, which are in the nature of review and reversal of its decision, taken after appreciation of legal and factual position of the case. No such powers are conferred by the Income-tax Act, 1961, on any authority whereby at the convenience and arbitrariness of the authority, the decision already taken on merit can be reversed under the guise of rectification. Such plenary power and jurisdiction falls beyond the purview of section 254(2) of the Act. The issues raised by the assessee, in the impugned Miscellaneous Application decided by the Bench on merit, do not fall under the category of mistake apparent from record, as contemplated under section 254(2) of the Act. It is relevant to refer to the decision of the Hon’ble Apex Court, wherein similar expression ‘error apparent on the face of the record’ came up for consideration before the Hon’ble Supreme Court, in the case of the Balaram, ITO Vs. Volkart Brothers (1971) 82 ITR 50 (SC).The Hon’ble Apex Court observed as under.
“An error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opinions can be hardly be said to be an error apparent on the fact of the record. As the above discussion of the rival contentions show the alleged error in the present case is far from self evident and it can be established, It has to be established by lengthy and complicated arguments. We do not think such an error can be cured by a writ of certiorari according to the rule governing the powers of the superior court to issue such a writ.”
8.3 The expression “any mistake apparent from record” are identical under section 154 and 254 (2) of the Act, hence, the judicial principles laid down by Supreme Court or High Courts are applicable to both the statutory situations contemplated under these sections, provided the mistake falls under the provisions of section 254(2) of the Act. However, the income-tax Authorities or the Tribunal cannot, reconsider, review or revise their order, as held in the case of CIT vs. Sevugan 16 ITR 59; Aruiandam Vs, ITO, 47 ITR 229. Similarly, such authorities cannot reconsider their conclusion, on the facts of the case, or sit in appeal, over the decision as decided in the case(s) of Sidhramappa Vs. CIT, 21 ITR 333; Parameshweran Vs. ITO 28 ITR 885; CIT Vs. Sundram 52 ITR 744; Khorsheed Vs. CED, 122 ITR 21 (SC). The assessee in the present miscellaneous application sought to review and modify the decision rendered by the Bench on merit after detailed discussions. Further, the Supreme Court has held in the case of Pootnundu Planations Pvt. Ltd. Led. Vs. ITO (1996), 221 ITR 557 that only an apparent error of fact or law can be rectified. If the mistake of law has to be established by construing the words of a section, to find its proper meaning, then such an error cannot normally be a rectifiable error. The Supreme Court in T.S. Balram, ITO Vs. Volkart Bros. (1971) 82 ITR 50 (SC) has observed;” it is not open to the Income Tax Officer to go into the true scope of the relevant provisions of the Act in a proceedings under this section. A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may conceivably be two opinions.”
8.4 There has to be a mistake apparent from the record. A look at the record must show that there has been an error, and that error may be rectified as held by the Supreme Court in CIT vs. Keshri Metal (P) Ltd. (1999) 155 CTR (SC) 531; (1999) 237 ITR 165 (SC). Only an apparent error of fact or law can be rectified.
8.5. Thus the issues raised by the assesses, in the impugned Miscellaneous Application have been dealt with by the Bench after appreciation of the factual and legal position of the case and rendered the decision on merit. Therefore, these two grounds mentioned, in the Miscellaneous Application, do not fall under the purview of the provisions of section 254(2) of the Act. The provisions of the section contemplate to rectify any mistake apparent from record and non-consideration of any argument advanced by either party for arriving at a conclusion is not an error apparent on record, although it may be an error of judgment and the same cannot be rectified u/s. 254(2) of the Act, as held by the Hon’ble Jurisdictional High Court in the case of CIT vs. Ramesh Electric & Trading Co. (1993) 203 ITR 497,502 (Bom). Similarly, where two opinions are possible, such a situation do not fall under the provisions of section 254(2) of the Act, as held by the Hon’ble Punjab & Haryana High Court in the case of CIT vs. Vardhaman Spinnings, 226 ITR 296 (P&H). Thus, it is clear that the power so conferred does not contemplate a re-hearing which would have the effect of re-writing an order, affecting the merits of the case, as sought by the assessee, in the present case. There is a difference between a power to review and a power to rectify a mistake apparent from record. In a nut-shell the scope of such power of rectification, in exercise of jurisdiction u/s. 254(2) of the Act, clearly contemplates what can be corrected is an apparent mistake from record and not to deal with merits of the case and to recall the order, on the basis of taking a second opinion, on the merit, which is not the scope of such rectification. It is further added that section 254(2) of the Act doesn’t confer powers on the Tribunal of reviewing its own decision, taken on merits, as held by the Supreme Court, in the case Patel Nareshi Thakershe vs. Pradyum Singhji Arjun Singhji (AIR 970 SC 1273). In view of the above legal and factual discussions, the issues raised by the assessee in the impugned Miscellaneous Application don’t fall within the purview of section 254(2) of the Act. Hence, the impugned miscellaneous application of the assessee is dismissed.
