Rectification for omission of binding precedent allowed, while statutory interest under Chapter XIV-B remained non-interferable

Omission to consider a binding Third Member decision was treated as a mistake apparent from the record, so the rectification application was allowed and the matter recalled for fresh hearing. The Tribunal also stated that interest under section 158BFA is statutory and cannot be waived or interfered with by any forum; that issue was decided against the assessee. The Chapter XIV-B estimation question was not finally determined and was left open for reconsideration in the rehearing.

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Issues: (i) Whether the rectification application under section 254 was liable to be allowed on the ground that the earlier order had not considered a binding Third Member decision; (ii) whether interest under section 158BFA could be waived or interfered with, and whether the Chapter XIV-B assessment issue should be reopened for fresh hearing.

Issue (i): Whether the rectification application under section 254 was liable to be allowed on the ground that the earlier order had not considered a binding Third Member decision.

Analysis: The omission to consider the cited Third Member decision was treated as a mistake apparent from the record. The Tribunal accepted that the earlier order had been rendered without taking that decision into account, and in the light of the jurisdictional principle that the opinion of the majority or the Third Member is binding, the order required recall for fresh consideration.

Conclusion: The rectification application was allowed and the matter was directed to be reheard afresh.

Issue (ii): Whether interest under section 158BFA could be waived or interfered with, and whether the Chapter XIV-B assessment issue should be reopened for fresh hearing.

Analysis: The Tribunal held that the levy of interest under section 158BFA was statutory and that no forum had power to condone or interfere with it. As to the assessment being framed on estimation under Chapter XIV-B, the Tribunal did not finally decide the point and left it to be argued again in the rehearing.

Conclusion: Interest under section 158BFA was held to be non-interferable, while the estimation issue was kept open for fresh consideration.

Final Conclusion: The application succeeded because the earlier order was recalled for rehearing, but the statutory interest issue was decided against the assessee.

Ratio Decidendi: An order may be rectified under section 254 when it has omitted to consider a binding decision that goes to the root of the matter, but statutory interest cannot be waived where the statute does not confer such power.

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