1963 (7) TMI 86 - HC - Income Tax

Tribunal Exceeded Jurisdiction in Order Revision: Court Rules

The court held that the Tribunal exceeded its jurisdiction by revising its order under section 35 of the Income-tax Act based on factors beyond the ... - Issues:Jurisdiction of the Tribunal to revise or review its own order under section 35 of the Income-tax Act.Analysis:The judgment in this case revolves around the jurisdiction of the Tribunal to revise or review its own order under section 35 of the Income-tax Act. The petitioner, an exporter of coir mats and mattings, disclosed a net income of Rs. 1,827 despite significant business receipts. Subsequently, penalties were imposed under section 28(1)(c) of the Income-tax Act for concealment of income. The Appellate Assistant Commissioner and the Income-tax Appellate Tribunal upheld the penalties, emphasizing the lack of mens rea. The petitioner then filed a review petition before the Tribunal, seeking a reduction in penalties based on cooperation with the department. The Tribunal, while acknowledging the penalties as justified, reduced them citing extenuating circumstances and cooperation. The Tribunal's action was purportedly under section 35 of the Income-tax Act, allowing rectification of mistakes apparent from the record.The crux of the issue lies in the interpretation of section 35 of the Income-tax Act. The court delved into precedents to determine the scope of this provision. Referring to Commissioner of Income-tax v. Sevugan, the court reiterated that section 35 permits correction of errors apparent on the face of the record, not revision or review of orders. The court cited judgments from various High Courts, emphasizing that rectification under section 35 is limited to errors evident from the record without the need for extensive reasoning or investigation. Mistakes requiring complex analysis fall outside the purview of section 35. The court highlighted that the Tribunal exceeded its jurisdiction by revising its order based on factors beyond the record, such as cooperation with the department.Ultimately, the court held that the Tribunal's order was illegal, void, and without jurisdiction. The court emphasized that the Tribunal cannot reduce penalties based on factors not apparent from the record, especially after affirming the correctness of the penalties initially. The judgment underscores the limited scope of section 35 for rectification of errors and precludes the Tribunal from revising its orders under this provision. Consequently, the petition was allowed, with no costs imposed.In conclusion, the judgment clarifies the boundaries of the Tribunal's authority under section 35 of the Income-tax Act, emphasizing that rectification is confined to errors evident from the record. The court's decision reaffirms the principle that the Tribunal cannot revise its orders under the guise of rectification, especially when the original decision was based on valid grounds and no new errors are apparent from the record.