1990 (11) TMI 111 - HC - Income Tax

Tribunal's Authority to Rectify Mistakes in Appeals | Broad Interpretation of 'Mistake Apparent'

Laxmi Electronic Corporation Limited Versus Commissioner Of Income-Tax

Laxmi Electronic Corporation Limited Versus Commissioner Of Income-Tax - [1991] 188 ITR 398, 102 CTR 293, 54 TAXMANN 515 Issues Involved: The judgment involves the following issues: 1. Jurisdiction of the Tribunal to reopen and rehear appeals under section 254(2) of the Income-tax Act, 1961. 2. Power of the Tribunal to rectify mistakes and errors apparent from the record. 3. Interpretation of the expression 'mistake apparent from the record' in section 254(2) of the Act.Jurisdiction to Reopen and Rehear Appeals: The Tribunal reopened and reheard appeals regarding assessment years 1980-81 and 1981-82 under section 254(2) of the Income-tax Act, 1961. The Tribunal found that an important contention raised by the Revenue was not dealt with in its initial judgment. The Tribunal, after considering the submissions of both parties, reopened the appeals and dismissed them as barred by time. The assessee contended that the Tribunal had no jurisdiction to reopen the appeals based on the proposition that when a contention is raised but not addressed by the Tribunal, it must be deemed to have been negatived. However, the Tribunal held that it has the inherent power to reopen an appeal if an important contention was not addressed, to prevent prejudice to the party. The Tribunal clarified that the expression 'mistake apparent from the record' includes failure to address crucial contentions, such as a preliminary objection regarding the maintainability of an appeal on the ground of limitation.Power to Rectify Mistakes: The Tribunal's power is limited to rectification under subsection (2) of section 254 and does not extend to review. The Tribunal's authority to rectify mistakes apparent from the record was affirmed, citing precedents and the interpretation of the expression 'error apparent on the face of the record.' The Tribunal's power to rectify mistakes is crucial when important contentions affecting the appeal's maintainability or merits are not addressed. The decision emphasized that failure to deal with such contentions amounts to an error apparent from the record, justifying the Tribunal's action to reopen and rectify the appeal.Interpretation of 'Mistake Apparent from the Record': The judgment clarified that the term 'record' in the context of 'mistake apparent from the record' encompasses all relevant documents and submissions before the Tribunal, not just the judgment itself. The Tribunal's failure to address a preliminary objection regarding the appeal's timeliness was deemed an error apparent from the record. The judgment highlighted that defining the expression 'error apparent on the face of the record' is complex, citing relevant legal precedents. The decision underscored that the Tribunal's power to rectify mistakes is essential to ensure fairness and prevent prejudice to parties, especially when crucial contentions are overlooked.In conclusion, the applications were dismissed as the Tribunal was deemed to have the authority to reopen and rectify appeals based on errors apparent from the record, ensuring fairness and preventing prejudice to the parties involved.