2013 (2) TMI 401

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....Tribunal") in ITA No.5302/DEL/1997, for the assessment year 1995-96, claiming following substantial questions of law:- 1. Whether on the facts and in the circumstances of the case, the ITAT is right in law in admitting a second Misc. Application for recalling the original order when the first Misc. Application has been rejected by holding that there was no mistake apparent from the records which required action under section 254(2) of the Income tax Act? 2. Whether, on the facts and in the circumstances of the case, the ITAT is right in law in holding that the disallowance of the claim of interest of Rs.3,23,29,399/- by way of prima-facie adjustment under section 143(1)(a) and further rejection of the assessee's claim under section 15....

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....pant financial institutions. It had to pay interest of Rs.3,23,29,399/- as on 31.3.1995. Due to financial crisis the assessee-company was not in position to pay interest. It requested the IDBI to re-schedule the interest payment by converting the same to term loan. Its request was accepted and interest due was converted into term loan deferred interest account. The assessee company relying upon circulars dated 25.9.1987 and 29.12.1993 prayed that the statutory liability be treated as discharged for the purpose of Section 43B of the Act. The Assessing Officer rejected the Application for rectification under section 154 of the Act. Aggrieved by the order, the assessee-company filed an appeal before the CIT(A), which was dismissed vide o....

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....tion of the order dated 14.8.1998 on the ground that there were numerous errors which existed in the order and the same was required to be recalled and appeal refixed for de novo hearing. The said application has been illegally allowed on 13.3.2000 vide order impugned herein. 4. Learned counsel for the revenue argued that the order passed by the Tribunal allowing the misc. application under section 254 (2) of the Act amounted to review of the order and the same was barred in view of Division Bench judgment of this Court in the Commissioner of Income tax, Ludhiana v. M/s Pearl Woolen Mills, Ludhiana, (2011) 330 ITR 164. 5. Learned counsel for the assessee on the other hand supported the order passed by the Tribunal. It was further cont....

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....le of inherent power and incidental power and also the principle that act of Court cannot prejudice anyone. Scope of the principle "Actus curiae neminem gravabit" i.e. nobody will be prejudiced by act of court, extends to correcting an error from an accidental slip or omission. Such power is available under section 254 (2) of the Act, which is akin to Section 152 CPC. In Niyamat Ali Molla v. Sonargon Housing Coop. Society Ltd.,(2007) 13 SCC 421, after referring to earlier judgments, the scope of such power was considered and it was observed that the said power was neither akin to power of review nor could clothe the court to modify judgment on merits. Scope of power of rectification has been repeatedly considered, inter-alia, in Volkart Bro....