Department's rectification plea under section 254(2) rejected for lacking apparent mistake on record

The ITAT Raipur rejected the department's miscellaneous application seeking rectification under section 254(2) of the Income Tax Act. The department requested rehearing of a tribunal order regarding assessment jurisdiction under section 153A where requisition was made under section 132A. The tribunal held that the department's lengthy contentions requiring detailed deliberation did not constitute a mistake apparent from record warranting rectification. The application was deemed an impermissible attempt at review rather than rectification, as the department failed to identify any glaring mistake on the face of records that would justify invoking section 254(2) powers.

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Issues Involved:
1. Non-issuance of notice under Section 153A of the Income Tax Act.
2. Applicability of Rule 112F of the Income Tax Rules, 1962.
3. Applicability of CBDT Circular No. 10/2012.
4. Jurisdiction to complete the assessment under Section 153A vs. Section 143(3).
5. Scope and ambit of Section 254(2) of the Income Tax Act for rectification of mistakes.

Issue-wise Detailed Analysis:

1. Non-issuance of notice under Section 153A of the Income Tax Act:
The department argued that the non-issuance of notice under Section 153A was justified as the case fell under the conditions specified in Rule 112F of the Income Tax Rules, 1962. The tribunal had initially observed that the assessment was wrongly framed under Section 143(3) instead of Section 153A. The department contended that this constituted an error apparent from the record, warranting rectification.

2. Applicability of Rule 112F of the Income Tax Rules, 1962:
The department submitted that the provisions of Rule 112F were applicable since the assessee was found in possession of unaccounted cash during a search operation conducted under Section 132A. The search was conducted in the territorial area of an assembly constituency during municipal elections, fulfilling the conditions under Sub-Rules (i) and (ii) of Rule 112F. The tribunal, however, did not consider these provisions in its initial order.

3. Applicability of CBDT Circular No. 10/2012:
The department referred to CBDT Circular No. 10/2012, which specifies that in cases where a search is conducted under Section 132 or a requisition is made under Section 132A, the Assessing Officer is not required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which the search is conducted. The department argued that this circular was not considered by the tribunal, leading to an error in the order.

4. Jurisdiction to complete the assessment under Section 153A vs. Section 143(3):
The department argued that the tribunal erred in holding that the assessment should have been completed under Section 143(3) instead of Section 153A. The department contended that the jurisdiction to complete the assessment was governed by Section 153A due to the requisition made under Section 132A. The tribunal, however, had decided in favor of the assessee, stating that the assessment was wrongly framed under Section 143(3).

5. Scope and ambit of Section 254(2) of the Income Tax Act for rectification of mistakes:
The tribunal emphasized that its powers under Section 254(2) are limited to rectifying any mistake apparent from the record. The tribunal cannot re-hear the entire case on merits or review its earlier order. The department's request for recalling the order and re-hearing the appeal was deemed beyond the scope of Section 254(2). The tribunal cited several judgments, including those from the Hon'ble Apex Court, to support its stance that rectification under Section 254(2) is not equivalent to a review or recall of the order.

Conclusion:
The tribunal concluded that the department's contentions required a long-drawn deliberation and debate, which is not permissible under Section 254(2). The tribunal cannot re-hear the entire case or revisit its earlier order. The department failed to point out any mistake apparent from the record. Therefore, the Miscellaneous Application filed by the department was dismissed. The tribunal's order dated 11.10.2021 in ITA No. 53/RPR/2021 remained unchanged. The order was pronounced in the open court on 23/07/2024.

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