1979 (3) TMI 6 - HC - Income Tax

Tribunal's Authority to Rectify Errors Upheld under I.T. Act

The court upheld the Tribunal's authority under s. 254(2) of the I.T. Act, 1961 to rectify mistakes in its orders. It emphasized the importance of ... Rectification Issues: Scope and applicability of s. 254(2) of the I.T. Act, 1961; Legality and jurisdiction of passing a corrigendum without notice; Principles of natural justice in passing impugned order.The judgment of the court, delivered by KONDAIAH J., addresses the scope and applicability of s. 254(2) of the I.T. Act, 1961. The case involved an appeal by the assessee to the Income-tax Appellate Tribunal against a penalty levy. The Tribunal allowed the appeal, and later issued a corrigendum to correct typographical errors in its order. The petitioner, the Addl. Commissioner of Income-tax, filed a writ petition to quash the corrigendum, alleging it was illegal and violative of natural justice as no notice was given. The Tribunal contended it had the power under s. 254(2) to correct its order without notice, as it was rectifying mistakes apparent from the record. The court analyzed s. 254(2), which empowers the Tribunal to rectify mistakes within four years of the order, either suo motu or upon being brought to its notice by the assessee or ITO. The court emphasized the importance of giving notice and opportunity to both parties before making amendments under s. 254(2) to ensure fairness and justice. However, in this case, the corrections made were typographical and did not prejudice the petitioner, justifying the rectification without notice. The court held that while notice is not mandatory under s. 254(2), it is equitable for the Tribunal to afford a reasonable opportunity to both parties before making amendments. The judgment concluded that the Tribunal had the jurisdiction to pass the corrigendum without violating natural justice principles, dismissing the writ petition without costs.In conclusion, the court's decision reaffirms the Tribunal's authority under s. 254(2) to rectify mistakes in its orders, emphasizing the importance of fairness and equity in affording opportunities to both parties before making amendments. The judgment clarifies that while notice may not be mandatory for rectifying typographical errors, it is a recommended practice to ensure a just and judicious process. The ruling highlights the balance between statutory powers and principles of natural justice in administrative proceedings, ultimately upholding the legality of the Tribunal's actions in this case.