2023 (2) TMI 909 - AT - Income Tax

Tribunal denies rectification under Income Tax Act, upholding classification as 'Income from House Property.'

M/s. Eskay Electronics India Pvt. Ltd. Versus ITO, Ward-11 (2), New Delhi

The Tribunal dismissed the Miscellaneous Application filed by the assessee, holding that there was no mistake apparent from the record that warranted ... Rectification of mistake u/s 254 - Income from factory premises - income from business OR income from other sources - HELD THAT:- Assessee is seeking recalling of the order [2015 (8) TMI 1566 - ITAT DELHI] passed by the Tribunal. The assessee has failed to point out error which is apparent from the record and can be rectified u/s 254 The judgments relied by the Ld. Counsel for the assessee do not help as in the case of Radhasoami Satsang [1991 (11) TMI 2 - SUPREME COURT] has clarified that the decision is confined to the facts of the case and may not be treated as an authority on aspects which have been decided for general application. Therefore, respectfully following the judgment of Hon’ble Supreme Court in the case of CIT vs M/s Reliance Telecom Ltd. [2021 (12) TMI 211 - SUPREME COURT] no merit in the contention of the assessee that there is a mistake apparent on record and needs to be rectified. On the contrary, it would tantamount to revisit the decision of the Tribunal on merit and to disturb the observations of the Tribunal which was given after appreciating the facts on record.M.A. filed by the assessee is dismissed. Issues Involved:1. Classification of income as 'Income from House Property' vs. 'Income from Business.'2. Alleged mistake apparent from the record in the Tribunal's order.3. Assessee's request for recalling the Tribunal's order.4. Legal precedents and their applicability.Issue-wise Detailed Analysis:1. Classification of Income:The primary issue revolves around the classification of income derived from the factory premises. The assessee argued that the income should be classified as 'Income from Business' based on historical treatment by CIT(A) in earlier years (2006-07 and 2008-09) and cited the Supreme Court case of CIT Vs Vikram Cotton Mills Ltd. The Tribunal, however, observed that the assessee had not resumed its business since 1988 due to ongoing litigation and had let out the factory premises for a fixed rent. The Tribunal concluded that the income should be classified as 'Income from House Property,' affirming the CIT(A)'s decision.2. Alleged Mistake Apparent from the Record:The assessee contended that the Tribunal incorrectly appreciated the facts, constituting a mistake apparent from the record. The Tribunal had noted that the assessee's business had been discontinued since 1988, and the chairman, being 88 years old, was unlikely to restart the business. The assessee argued that the Tribunal's observations were incorrect, emphasizing that the business discontinuation was due to a workers' strike and not merely litigation.3. Assessee's Request for Recalling the Tribunal's Order:The assessee sought to recall the Tribunal's order dated 03.08.2015, arguing that the Tribunal had misinterpreted the facts and the nature of the income. The Tribunal, however, held that it could not revisit its order on merit and could only rectify mistakes apparent from the record. The Tribunal cited the Supreme Court's decision in CIT vs M/s Reliance Telecom Ltd., which clarified that the Tribunal's powers under Section 254(2) of the Income Tax Act are limited to rectifying mistakes apparent from the record and do not extend to re-hearing the appeal on merits.4. Legal Precedents and Their Applicability:The assessee relied on the Supreme Court judgment in Radhasoami Satsang vs CIT and the Allahabad High Court judgment in Laxmi Electronic Corporation Ltd. vs CIT to support its case. The Tribunal, however, found these judgments inapplicable. The Supreme Court in Radhasoami Satsang had confined its decision to the specific facts of that case, and the Tribunal emphasized that it could not disturb its earlier observations based on these precedents.Conclusion:The Tribunal dismissed the Miscellaneous Application filed by the assessee, holding that there was no mistake apparent from the record that warranted rectification under Section 254 of the Income Tax Act. The Tribunal reaffirmed its original decision, classifying the income as 'Income from House Property' and not 'Income from Business.' The Tribunal's order was pronounced in the open Court on 20th February 2023.