ITO Vs SEL Resources Ltd. (ITAT Hyderabad)
Summary: The Hyderabad Bench of the Income Tax Appellate Tribunal, in Income Tax Officer Vs SEL Resources Ltd, allowed the Revenue’s miscellaneous application under Section 254(2) of the Income-tax Act, 1961 and recalled its earlier order dated 20 August 2025 in ITA No. 679/Hyd/2025 for Assessment Year 2017–18. The order dated 6 May 2026 was passed by Judicial Member Ravish Sood and Accountant Member Madhusudan Sawdia.
The Revenue contended that the Tribunal’s earlier decision proceeded on the mistaken factual assumption that the Assessing Officer had referred the matter to the Valuation Officer under Section 142A. On that premise, the Tribunal had applied the six-month limit in Section 142A(6) to the valuation report. The Departmental Representative explained that the reference had actually been made under Section 50C read with Section 55A, rather than Section 142A. The assessee’s authorised representative did not dispute the Revenue’s clarification and stated that the earlier submissions had been made under the impression that Section 142A governed the valuation reference. After examining the record and its earlier order, the Tribunal accepted that its application of the Section 142A(6) time limit rested on an incorrect factual foundation.
The Tribunal held that a decision founded on an undisputed mistaken assumption of fact going to the root of the matter contains a mistake apparent from the record capable of rectification under Section 254(2). It therefore recalled the order dated 20 August 2025 and directed fresh adjudication after considering the correct statutory provisions and providing both parties an opportunity of hearing. The Registry was directed to list the appeal in the normal course. The Revenue’s miscellaneous application was allowed; the underlying appeal was not finally decided on its merits.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
The present Miscellaneous application is filed by the Revenue under section 254(2) of the Income-tax Act, 1961, seeking recall of the order passed by the Tribunal while disposing of the appeal in ITA No. 679/Hyd/2025, vide its order dated 20.08.2025.
2. The Ld. Departmental Representative (for short, “DR”) at the threshold of hearing of the application, has submitted that the order of the Tribunal suffers from a mistake apparent from record inasmuch as it has proceeded on an incorrect factual premise that the reference made by the AO to the Valuation Officer was under section 142A of the Act, and, thus, based on its said wrong factual observation applied the statutory time limit prescribed under section 142A(6) of the Act for receipt of valuation report.
3. The Ld. DR submitted that the aforesaid observation of the Tribunal is factually incorrect. Elaborating on his contention, the Ld. DR submitted that as the reference to the Valuation Cell was actually made under section 50C r.w. Section 55A of the Act and not under section 142A of the Act, therefore, the assumption of applicability of the six-month time limit under section 142A(6) is fundamentally erroneous and has resulted in an incorrect conclusion in the order of the Tribunal.
4. The learned Authorised Representative (for short, “AR”) for the assessee, while not being in a position to controvert the factual assertion made by the Revenue, has stated that he in the course of hearing of the appeal had proceeded under the impression that the reference to the Valuation Cell was made under section 142A of the Act.
5. We have heard the Ld. Authorised Representatives of both parties, and perused the record including the order of the Tribunal dated 20.08.2025.
6. Admittedly, the Tribunal, while disposing of the appeal had proceeded on the basis that the reference to the Valuation Officer was made under section 142A of the Act and accordingly applied the time limit prescribed under sub-section (6) thereof. The Ld. DR has specifically pointed out that the reference was not made under section 142A but under section 50C r.w section 55A of the Act. The Ld. AR has not been able to dispute this factual position and has only expressed that the earlier submissions were made under a mistaken impression.
7. We have given thoughtful consideration and find that the foundation of the Tribunal’s conclusion on the applicability of the six-month time limit under section 142A(6) is thus shown to be based on an incorrect factual premise, which goes to the root of the matter. It is well settled that an order founded on a mistaken assumption of fact, not borne out from the record and not disputed by the parties, constitutes a mistake apparent from the record amenable to rectification under section 254(2) of the Act.
8. In view of the undisputed position that the reference was made under section 50C r.w Section 55A of the Act and not under section 142A of the Act, the reliance placed in the order on the time limit prescribed under section 142A(6) of the Act suffers from a mistake apparent from the record which requires correction.
9. We, thus, are of the considered view that there exists a mistake apparent from the record warranting rectification. Accordingly, the order of the Tribunal passed while disposing of the appeal in ITA No. 679/Hyd/2025 dated 20.08.2025, is recalled for fresh adjudication in accordance with law, after considering the correct statutory provisions and affording due opportunity to both the parties.
10. The registry is directed to fix the case in the normal course after putting both parties to notice about the fresh date of hearing of the appeal.
11. In the result, the Miscellaneous Petition filed by the Revenue is allowed in the above terms.
Order pronounced in the open court on 06th May, 2026.
