2019 (4) TMI 1618 - AT - Income Tax

Tribunal denies rectification request, clarifies Sec. 254(2) only for correcting mistakes, not reviews.

Popatlal N. Shah 1802 Versus ACIT-19 (2)

The Tribunal dismissed the applicant's miscellaneous application seeking rectification of the order in the case of Popatlal N. Shah Vs. ACIT 19(2), Mumbai ... Revision u/s 254 - Bogus purchases - addition @ 6.18% - estimation of profit percentage - HELD THAT:- Assessee by filing the present application under Sec. 254(2) is seeking a review of the order passed by the Tribunal while disposing off his appeal viz. Popatlal N. Shah Vs. ACIT 19(2), Mumbai [2017 (11) TMI 1816 - ITAT MUMBAI] As per the settled position of law, though a mistake which is glaring, patent, apparent and obvious from the records is amenable for rectification under sub-section (2) of Sec.254, however, the powers therein vested cannot be exercised for allowing a review of the order. In sum and substance, as the assessee in the case before us is seeking a review of the order passed by the Tribunal while disposing off its appeal, which as observed by us is not permissible in the eyes of law, therefore, the application filed by him does not merit acceptance. Issues:Application for rectification of mistake apparent from record under Sec.254(2) of the Income Tax Act, 1961.Analysis:The applicant filed a miscellaneous application seeking rectification under Sec.254(2) of the Income Tax Act, 1961, based on the Tribunal's order in the case of Popatlal N. Shah Vs. ACIT 19(2), Mumbai for A.Y. 2012-13. The applicant contended that the Tribunal had erred in confirming the addition at 3% of the aggregate value of purchases made from three concerns, as the Tribunal failed to consider certain crucial facts. These facts included the GP margin on alleged bogus transactions, the applicant's net margin during the relevant year, and the GP of 5.91% that was not considered for grant of credit while estimating the addition. The applicant argued that the Tribunal's order contained a mistake apparent from the record, making it eligible for rectification under Sec.254(2) of the Income Tax Act, 1961.The Departmental Representative opposed the application, stating that no mistake was evident in the Tribunal's order. The Departmental Representative argued that the application lacked merit and should be dismissed. Upon hearing both parties and examining the available material, the Tribunal observed that in the original order, the Tribunal had upheld the CIT(A)'s decision and restricted the additions to 3% of the aggregate value of purchases from the alleged bogus concerns. The Tribunal emphasized that seeking a review of the order passed by the Tribunal was not permissible under the law, as the powers vested in rectification under Sec.254(2) could not be utilized for allowing a review. Therefore, the Tribunal concluded that the applicant's request for a review did not meet the legal requirements and dismissed the miscellaneous application accordingly.In summary, the Tribunal dismissed the miscellaneous application filed by the applicant seeking rectification of the order passed by the Tribunal in the case of Popatlal N. Shah Vs. ACIT 19(2), Mumbai for A.Y. 2012-13. The Tribunal clarified that while rectification of a glaring, patent, and apparent mistake from the records is permissible under Sec.254(2) of the Income Tax Act, 1961, the powers granted cannot be used for a review of the order. As the applicant's request amounted to seeking a review, which is not allowed under the law, the application was deemed unacceptable and dismissed by the Tribunal.