1990 (11) TMI 111 - HC - Income Tax

Rectification under s. 254(2) covers ignored limitation objections, allows rehearing for mistakes apparent from record

HC held that though the Tribunal has no power of review, it possesses rectification jurisdiction under s. 254(2) to correct a 'mistake apparent from the ... Jurisdiction u/s 254(2) to reopen and rehear the appeals - Appeal To Tribunal - Mistake Apparent From Record - HELD THAT:- It is a well-settled proposition that an act of court (which, in the context, means and includes a Tribunal of the nature of the Income-tax Appellate Tribunal) should not prejudice a party. In such a case, it would not be just to drive the party to a reference under section 256. It must be left to the Tribunal to reopen the appeal if it finds that it has omitted to deal with an important ground urged by the party. We are not persuaded to agree that the expression 'record' in the phrase 'mistake apparent from the record' in section 254(2) means only the judgment. The record means the record before the Tribunal. Failure to deal with a preliminary objection of the nature concerned herein certainly amounts to a mistake apparent from the record. We must hasten to make it clear that the expression 'error apparent on the face of the record' is not easy to define; see the decision of the Supreme Court in Hari Vishnu Kamath v. Ahmed Ishaque [1954 (12) TMI 22 - SUPREME COURT]. Suffice it to say that failure to deal with a preliminary objection relating to maintainability of the appeal on the ground of limitation does amount to an error apparent on the face of the record. It is neither possible nor desirable to try to define the said expression or to lay down the several situations attracting the same. We must state that no question is raised with respect to the correctness of the finding that the appeals were barred by time. All the three questions sought to be raised relate to the power of the Tribunal to reopen the appeals. We agree with learned counsel for the assessee that the Tribunal has no power to review. Its only power is one of rectification conferred by subsection (2) of section 254. As stated, where the Tribunal fails or omits to deal with an important contention affecting the maintainability/merits of the appeal, it must be deemed to be a mistake apparent from the record which empowers the Tribunal to reopen the appeal and rectify the same if it is so satisfied. Applications fail and are dismissed. 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.