2021 (1) TMI 400 - AT - Income Tax

Tribunal denies rectification under Income Tax Act, 1961, citing no apparent error.

The Tribunal dismissed the miscellaneous applications filed by the assessee, stating that there was no mistake apparent from the record that warranted ... Rectification u/s 254 - assessee has claimed deduction under section 80IB(10) however the Tribunal observed that deduction under section 80IB shall be calculated on the gains derived for such undertaking and same cannot exceed the profit derived for said undertaking - Tribunal, while adjudicating the assessee`s appeal, has not considered the decision in the case of Goldmine Shares & Stock Finance Pvt. Ltd. [2008 (4) TMI 405 - ITAT AHMEDABAD] hence this is a mistake apparent in the order of the Tribunal which needs rectification. HELD THAT:- It is abundantly clear from the decision of Prem Colonisers Pvt. Ltd [2013 (1) TMI 371 - ITAT DELHI] that failure of the Tribunal to consider an argument advanced by either party for arriving at a conclusion is not an error apparent on the record, although it may be an error of judgment. Review proceedings imply proceedings where a party, as of right, can apply for reconsideration of the matter, already decided upon, after a fresh hearing on the merits of the controversy between the parties, such remedy is certainly not provided by section 254(2) . In the garb of an application for rectification, the assessee cannot be permitted to reopen and re-argue the whole matter, which is beyond the scope of the section 254(2) of the Act. We note that in assessee`s case under consideration, the Tribunal has considered the decision of ACIT vs. Goldmine Shares & Stock Finance Pvt. Ltd(supra) cited by the assessee during the hearing and also considered the entire facts of the assessee`s case, and reached on the conclusion/decision. The said conclusion, that is, the ratio of the decision of the Tribunal, cannot be reviewed or rectified by the Tribunal under section 254(2) of the Act, therefore we dismiss all the miscellaneous application filed by the assessee. Issues Involved:1. Mistake apparent from the record under Section 254(2) of the Income Tax Act, 1961.2. Deduction under Section 80IB(10) of the Income Tax Act, 1961.3. Tribunal's adherence to precedent in ACIT vs. Goldmine Shares & Stock Finance Pvt. Ltd.4. Scope of rectification under Section 254(2) of the Income Tax Act, 1961.Detailed Analysis:1. Mistake Apparent from the Record under Section 254(2) of the Income Tax Act, 1961:The assessee filed miscellaneous applications claiming that the Tribunal's order dated 10.08.2018 contained a mistake apparent from the record within the meaning of Section 254(2) of the Income Tax Act, 1961. The Tribunal had allegedly failed to consider the precedent set in ACIT vs. Goldmine Shares & Stock Finance Pvt. Ltd. while adjudicating the deduction under Section 80IB(10).2. Deduction under Section 80IB(10) of the Income Tax Act, 1961:The core issue revolved around the calculation of deduction under Section 80IB(10). The assessee argued that the Tribunal's observation that the deduction should be calculated on the gains derived from the undertaking and should not exceed the profit derived from the said undertaking was at variance with the Goldmine Shares case, which held that the deduction would be limited to gross total income and not to profit.3. Tribunal's Adherence to Precedent in ACIT vs. Goldmine Shares & Stock Finance Pvt. Ltd.:The Tribunal, in its original order, had considered the decision in ACIT vs. Goldmine Shares & Stock Finance Pvt. Ltd. and other relevant facts before reaching its conclusion. The assessee contended that the Tribunal's decision was incorrect despite considering the precedent, hence constituting a mistake apparent from the record. However, the Tribunal clarified that it had indeed considered the precedent and the entire facts of the case, and the conclusion reached was a matter of judgment, not an apparent mistake.4. Scope of Rectification under Section 254(2) of the Income Tax Act, 1961:The Tribunal emphasized that the power to rectify an order under Section 254(2) is extremely limited. It does not extend to correcting errors of law or reappreciating factual findings. The Tribunal cannot review or obliterate its original order and substitute it with a new one. The Tribunal cited several precedents, including Prem Colonisers Pvt. Ltd. vs. ITO, to underline that a mistake apparent from the record must be patent and obvious, not one that requires elaborate arguments or investigation. The Tribunal concluded that the assessee's application sought a review of the original decision, which is beyond the scope of Section 254(2).Conclusion:The Tribunal dismissed the miscellaneous applications filed by the assessee, stating that there was no mistake apparent from the record that warranted rectification under Section 254(2). The Tribunal had considered the relevant precedent and facts, and the decision reached was a matter of judgment, not an apparent error. The order was pronounced on 21/12/2020.