AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2004 (7) TMI 77
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....n 215 by an order dated May 1, 1989, the Assessing Officer fully waived interest under section 139(8) for the year 1981-82 and partially for the assessment year 1982-83; and the interest under section 215 was partially waived for both the years. Subsequently, by an order dated May 22, 1989, in terms of the order dated March 17, 1989, of the Commissioner of Income-tax (Appeals), the Assessing Officer had held that the interest under section 139(8) for the assessment year 1981-82 was fully waived and the other interest was partially waived, therefore, no further step need be taken. Against this order an appeal was preferred. The Commissioner of Income-tax (Appeals) by his order dated June 14, 1991, directed the assessee to file a rectification application under section 154 before the Assessing Officer. By an order dated June 26, 1992, passed on the application for rectification so filed, the Assessing Officer held that the interest had already been waived to the extent attributable to the income disclosed in the amnesty returns and there was no scope for further waiver. On appeal the Commissioner of Income-tax (Appeals) by an order dated August 19,1993, deleted the entire interest ....
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....on a decision in Bata India Ltd. v. Deputy CIT [1996] 217 ITR 871 (Cal), to support his contention that when the breach resulting from an order is attributable to the Tribunal's mistake, error or omission, it is the bounden duty of the Tribunal to set it right. Mr. Khaitan then relied upon a decision in CIT v. Ballabh Prasad Agarwalla [1998] 233 ITR 354 (Cal) and contended that the Tribunal has no inherent power to review, neither it can re-examine or give a second view but section 254(2) expressly confers power upon the Tribunal to correct any mistake apparent from the record and power to amend any order passed under subsection (1) of section 254. Elaborating, he contended that it must be left to the Tribunal to reopen an appeal if it finds that it has omitted to deal with an important ground urged by the party. Failure to deal with a preliminary objection amounts to a mistake apparent from the record. The primary aim of legal policy flowing from section 254(2) is to do justice. Parliament did not intend to do injustice or to allow a wrong thing to continue contrary to law or public policy. Therefore, it has incorporated the provision for rectification of a mistake apparent on th....
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....54(2). Therefore, the appeal should be allowed. Respondent's contention: Mr. Mullick, learned counsel for the Department, on the other hand, contended drawing our attention to the respective orders and materials available before us on record that the learned Tribunal had noted the fact with regard to the order dated March 17, 1989, and its impact and had noted the contention on behalf of the assessee. After having considered the question the Tribunal had given its decision. This decision may be wrong but then it would be a wrong decision or wrong judgment, it cannot be an error apparent rectifiable under section 254(2). According to him, in order to assert that there was an error apparent on the face of the record a long drawn argument is necessary and there is scope for forming two opinions with regard thereto. He relied on the decision in CIT v. Gokul Chand Agarwal [1993] 202 ITR 14 (Cal) in support of his contention wherein it was held that it is only a mistake which can be corrected, it cannot re-evaluate the total effect of the facts found by it nor can it review its order. He also relied upon a decision in CIT v. Ramesh Electric and Trading Co. [1993] 203 ITR 497 (Bom) to ....
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....ough noted by the Tribunal and considered by it, yet it would come within the purview of section 254(2) for rectification as an error apparent on the face of the record? Finality of order dated March 17,1989: From the facts disclosed, it appears that the order dated March 17, 1989, has since reached its finality. No appeal had since been preferred against the same. As rightly pointed out by Mr. Khaitan the interest under section 139(8) and section 215 are chargeable in respect of regular assessment which in Explanation 2 of section 139(8) and sub-section (6) of section 215, respectively, included the first time assessment under section 147 as a regular assessment. By converse analogy, it can be said that no interest can be charged under section 139(8) and section 215 when it is a case of reassessment under section 147 as in the present case. The law is clear. Following this principle as was held, in Volkart Bros. [1971] 82 ITR 50, by the apex court, drawing the converse analogy the principle seems to be settled, and it was so accepted by the Commissioner of Income-tax (Appeals) in his order dated March 17, 1989. The facts revealed that in the process of giving effect to this ord....
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....ome final and it was no more open to interference by the Tribunal since the appeal that was preferred before the Tribunal was not an appeal against the order dated March 17,1989, and it was preferred against an order seeking to give effect to the order dated March 17, 1989, no argument is necessary, neither there could be two opinions with regard thereto. The jurisdiction of the Tribunal was confined within the scope of looking into the question as to whether the Assessing Officer had rightly enforced or had given effect to the order dated March 17, 1989, which had fully waived the interest. Whether there was any mistake amenable to section 254(2): Thus, even if the order dated March 17,1989, was noted or even if the contention of the assessee was noted even then non-consideration of the fact or omission to note the fact of finality of the order dated March 17, 1989, staring on the face of the Tribunal outside the scope and jurisdiction of the Tribunal's interference within the scope of the appeal preferred before it, is a mistake which comes within the scope of section 254(2) as an error apparent on the face of the record or a mistake. In the facts and circumstances of the case,....
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....ng a reassessment within the ratio decided in K. Govindan and Sons [2001] 247 ITR 192 (SC) since followed in Keshoram Industries Ltd. [2004] 271 ITR 353 (Cal) involving an identical question. Therefore, there is no doubt about the justifiability of the order dated March 17,1989, against which no appeal having been preferred, the order had attained finality. Therefore, it was staring on the face of the Tribunal that this could not be interfered with in an appeal against an order seeking to give effect to the order dated March 17, 1989. The decision in Neeta S. Shah [1991] 191 ITR 77 by the Karnataka High Court had held that if the order is founded on a mistaken assumption and the error is discovered, the Tribunal has power to invoke jurisdiction under section 254(2) because the very basis of the earlier order sought to be rectified requires rectification. We are in agreement with the said view of the Karnataka High Court having regard to the facts and circumstances of the case where the very foundation of the orders of the learned Tribunal sought to be rectified herein was based on the misconceived notion that the learned Tribunal was sitting on appeal in the order dated March 17,1....