2013 (4) TMI 547 - AT - Income Tax

Tribunal rejects Revenue's bid for rectification under Income-tax Act S.254(2), tax effect < Rs.3 lakhs

The Tribunal upheld its original decision, dismissing the Revenue's application for rectification/recall under S.254(2) of the Income-tax Act. The ... Rectification/recall of the order of the Tribunal seeked - Held that:- The Tribunal has rendered its decision, after hearing both the parties to the dispute, and the decision to dismiss the appeal of the Revenue, treating the same as non maintainable on the ground that the tax effect was less than Rs.3 lakhs, was duly pronounced in the open court at the conclusion of hearing. The finding of the Tribunal that the tax effect was less than Rs.3 lakhs was a finding of fact and the same was not disputed by the DR when the decision was pronounced in the open court at the conclusion of hearing. The department, having not raised any contentions, to dispute the said finding of the Tribunal, as to the tax effect involved, and by adducing necessary evidence to substantiate the said contentions, at that stage, it cannot be said that there was any mistake apparent from record in the order of the Tribunal dated 17.10.2012. - application of the Revenue Rejected. Issues Involved:Rectification/recall of the order based on the tax effect involved in the appeal being less than Rs.3 lakhs.Detailed Analysis:The Revenue filed an application under S.254(2) of the Income-tax Act, 1961 seeking rectification/recall of the Tribunal's order dated 17.10.2012 in ITA No.1041/Hyd/2012 for the assessment year 2009-10. The Tribunal had dismissed the appeal of the Revenue in limine as the tax effect involved was less than Rs.3 lakhs, making the appeal not maintainable as per CBDT Instruction No.3 of 2011. The Revenue contended that the tax effect was actually Rs.3,19,996, above the threshold, and there was an error in the Tribunal's order. The assessee's counsel argued that the tax effect was below Rs.3 lakhs, supported by detailed calculations.Upon hearing both parties, the Tribunal found that the tax effect was less than Rs.3 lakhs, a fact not disputed by the Revenue during the hearing. The Tribunal's decision to dismiss the appeal based on the tax effect was a finding of fact and not challenged by the Revenue at the appropriate stage. The Revenue's contentions regarding the Assessing Officer's subsequent order were deemed untimely and insufficient to prove any mistake apparent from the record. The Tribunal held that the Department failed to demonstrate any errors in the tax calculations provided by the assessee, further supporting the original decision.Referring to a decision of the jurisdictional High Court, the Tribunal emphasized that rectification powers under S.254(2) are limited to correcting patent, obvious, and clear errors or mistakes. In the absence of such mistakes, the Tribunal cannot recall its previous order. As there was no mistake apparent from the record regarding the tax effect, the Tribunal rejected the Revenue's application, deeming it meritless.Therefore, the Tribunal upheld its original decision, dismissing the Revenue's application for rectification/recall, as there was no mistake apparent from the record within the scope of S.254(2) of the Act.