1996 (2) TMI 199 - AT - Income Tax

Assessee's application under Income Tax Act dismissed for not rectifying Tribunal's decision

The miscellaneous application filed by the assessee to rectify mistakes apparent from the record under sec. 254(2) of the Income Tax Act was dismissed. ... Appellate Tribunal, Power To Rectify Mistakes Issues Involved:1. Whether there are any mistakes apparent from the record so as to invoke the provision of sec. 254(2) of the Income Tax Act, 1961.2. Whether the Tribunal is competent to take a decision in a miscellaneous application filed u/s 254(2) contrary to the decision on merits taken in order passed u/s 254(1) of the Income Tax Act, 1961.3. Whether the miscellaneous application filed by the assessee is to be allowed or dismissed.Detailed Analysis:Issue 1: Mistakes Apparent from RecordThe assessee filed a miscellaneous application to rectify an apparent mistake on the face of the consolidated order of the Tribunal. The primary contention was that the Tribunal did not consider the decision of the Bombay Bench in the case of Deccan Poultry Industries, which was on an identical issue. The Tribunal had considered the decision in Marshall Poultry Farm but failed to take into account other relevant decisions. The argument was that this non-consideration constituted a mistake apparent from the record.Upon review, it was found that the Tribunal had indeed considered the Marshall Poultry Farm decision but not the Deccan Poultry Industries case. The Tribunal acknowledged that the sheds used for hatching chicks should be treated as plants for depreciation purposes. Despite this, the Tribunal's final decision did not align with these facts, suggesting a contradiction that warranted rectification.However, the Accountant Member disagreed, stating that the observations in para 8 were the arguments of the assessee, and para 13 contained the arguments of the departmental representative. The Tribunal's conclusion in para 14 was based on a comprehensive review of facts and case law, and thus, no apparent mistake existed.The Third Member concluded that the non-mention of the Deccan Poultry Industries decision did not affect the outcome. The Tribunal's decision not to follow Marshall Poultry Farm implied it would not follow Deccan Poultry Industries either. Therefore, there was no mistake apparent from the record.Issue 2: Competence of Tribunal to Decide Contrary to MeritsThe Tribunal's power to rectify mistakes under sec. 254(2) does not extend to reviewing its own decisions. The Delhi High Court in CIT v. K.L. Bhatia held that the Tribunal has no inherent power to review its orders on merits, only to rectify mistakes apparent from the record.The Tribunal's decision in the miscellaneous application to treat poultry sheds as plants for special depreciation amounted to a review of its earlier order, which is not permissible by law. The Orissa High Court in CIT v. Jagabandhu Roul also ruled that the Tribunal does not have the power of review, only rectification of mistakes.The Third Member agreed with the Accountant Member that the Tribunal's decision in the miscellaneous application was not a rectification but a review, which is not allowed under sec. 254(2).Issue 3: Allowing or Dismissing the Miscellaneous ApplicationThe Judicial Member initially allowed the miscellaneous application, citing the non-consideration of relevant decisions and contradictions in the Tribunal's order. However, the Accountant Member rejected it, stating there was no mistake apparent from the record.The Third Member, after reviewing the arguments, concluded that there was no rectifiable mistake in the Tribunal's appellate order. The Tribunal had considered the necessary facts and case law, and the omission of specific decisions did not constitute an apparent mistake. Therefore, the miscellaneous application was dismissed.ConclusionThe Third Member agreed with the Accountant Member that there was no mistake apparent from the record to be rectified under sec. 254(2). Consequently, the miscellaneous application filed by the assessee was dismissed, and the Tribunal's original decision was upheld.