Revenue's Application Dismissed, No Error Found, Rectification Scope Limited under Section 254(2)

The Tribunal dismissed the Miscellaneous Application filed by the Revenue, holding that the Tribunal did not commit any mistake or error in its original order. The communication dated 03.09.2019 was not part of the record, and the scope of rectification under Section 254(2) does not allow for a review of the earlier decision. The order was pronounced in the open court on 03-05-2023.

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Issues Involved:
1. Whether the Tribunal erred in quashing the intimation passed under Section 143(1) of the Act.
2. Whether the communication dated 03.09.2019 was properly considered.
3. Scope of rectification under Section 254(2) of the Act.

Summary:

Issue 1: Quashing of Intimation under Section 143(1)
The Tribunal quashed the intimation passed under Section 143(1) by CPC, citing that the assessee was not afforded an opportunity to make the adjustment either in writing or electronically as per the first proviso to Section 143(1) of the Act. The Revenue contended that a communication was sent to the assessee on 03.09.2019 proposing disallowance under Section 36(1)(va), but the assessee did not respond. The Tribunal found no evidence of such communication during the hearing, leading to the adjournment of the Miscellaneous Application (M.A.) multiple times. The Tribunal ultimately held that the Revenue failed to produce the required documents, and thus, the intimation was rightly quashed.

Issue 2: Consideration of Communication Dated 03.09.2019
The Revenue produced the communication dated 03.09.2019 in the M.A., arguing that the Tribunal's earlier order was factually incorrect. However, the Tribunal noted that the document was not part of the record during the original hearing. The Tribunal emphasized that documents referred to and relied upon during arguments alone are treated as part of the record, as per Rule 18(6) of the ITAT Rules, 1963. The Tribunal concluded that the notice dated 03.09.2019 was not part of the record and thus could not be considered in the rectification application.

Issue 3: Scope of Rectification under Section 254(2)
The Tribunal reiterated that the scope of rectification under Section 254(2) is extremely limited and does not extend to correcting errors of law or re-appreciating factual findings. The Tribunal cited several judgments, including CIT vs. Reliance Telecom Ltd. and Vrundavan Ginning and Oil Mills vs. AR, which clarified that rectification is only for mistakes apparent from the record and does not allow for re-hearing or reviewing the merits of the case. The Tribunal concluded that the M.A. filed by the Revenue was an attempt to review the earlier decision, which is not permissible under Section 254(2).

Conclusion:
The Tribunal dismissed the Miscellaneous Application filed by the Revenue, holding that the Tribunal did not commit any mistake or error in its original order. The communication dated 03.09.2019 was not part of the record, and the scope of rectification under Section 254(2) does not allow for a review of the earlier decision. The order was pronounced in the open court on 03-05-2023.

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