AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2004 (3) TMI 41
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...., in Appeal No. W.T.A.25/C.II/CIT (A)-I of 1996-97. The further appeal filed by the assessee in W.T.A. No. 23/Bang of 1999 was partly allowed by the Income-tax Appellate Tribunal by order dated August 27, 2002, reducing the penalty to the minimum leviable under the Act which is equal to the amount of tax sought to be evaded. Thereafter, the assessee filed an application (M.P. No. 204/Bang of 2002) for rectification of the order dated August 27,2002, under section 35 of the Act by recalling the said order and to pass appropriate orders after considering all the evidence and facts furnished by it. On hearing, the Tribunal was satisfied that it had not examined the issue from the angle as to whether the assets not disclosed in the return could be subjected to wealth-tax or not and that it had also not considered the decision relied on by the assessee in CIT v. India Sea Foods [1996] 218 ITR 629 (Ker) [FB]. Therefore, the Tribunal held that there was a mistake in its order and allowed the application for rectification and recalled the order dated July 28, 2002, passed in W.T.A. No. 23/Bang of 1999. As a consequence W.T.A. No. 23/Bang of 1999 is to be heard afresh. Feeling aggriev....
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....n the appeal. An order under section 254(2) does not have existence de hors the order under section 254(1). Recalling of an order is not permissible under section 254(2). Recalling of an order automatically necessitates rehearing and readjudication of the entire subject-matter of appeal. The dispute no longer remains restricted to any mistake sought to be rectified. Power to recall an order is prescribed in terms of rule 24 of the Income-tax (Appellate Tribunal) Rules, 1963, and that too only in cases where the assessee shows that it had a reasonable cause for being absent at a time when the appeal was taken up and was decided ex parte ....." A similar view was expressed by another Division Bench of the Delhi High Court in J.N. Sahni v. ITAT [2002] 257 ITR 16: "The Tribunal in the absence of any express power cannot be said to have a power of substantive review. The Tribunal has merely the power to amend its order. While exercising the said power it cannot recall its order. The expression 'amendment' must be assigned its true meaning. While an order of amendment is passed, the order remains, but when an order is recalled it stands obliterated. It is well settled that what can....
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....d. Amendment of the order is the consequence of the rectification and its purpose is to give effect to the rectification. If the rectification involves an amendment, which will affect the whole of the order, it cannot be said that simply because of the use of the word 'amend', which normally may not mean the cancellation of the whole order, the Income-tax Officer should be powerless to rectify the mistake or error which is apparent on the face of the order. The word 'amend' with reference to legal documents means correct an error and the expression 'amend the order' would mean correct the error in the order. Under section 154 power to rectify the error is to be exercised by correcting the error in the order and the correction must, therefore, extend to the elimination of the error. What the effect of the elimination of the error will be on the original order will depend upon each case. It may be that the elimination of the error may affect only a part of the order. It may also be that the error may be such as may go to the root of the order and its elimination may result in the whole order falling to the ground. In our opinion the Income-tax Officer will be able to amend or correct....
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....esh. In S.S. Gupta [2002] 257 ITR 440, the Rajasthan High Court held, relying on the decision in Blue Star [1969] 73 ITR 283(Bom), that where the Tribunal concludes that there is a mistake apparent on the face of the record, the Tribunal has power to rectify its order for eliminating its mistake by recalling the order and passing a fresh order. The decisions relied on by the assessee no doubt laid down the principle that the Tribunal, while exercising the power under section 254(2) of the Income-tax Act or section 35 of the Wealth-tax Act, can recall the original order, if it is satisfied that there was a mistake apparent from the record. The decisions relied on by the assessee are cases where the order has been recalled either on the ground that the appeal had been heard ex parte or where the order related to only one issue and the decision on such issue was founded by a mistaken assumption or non-consideration of relevant grounds/documents relating to such issues. Learned counsel for the assessee submitted that the principle laid down in the line of cases represented by Karan and Co, [2002] 253 ITR 131 by the Delhi High Court and C. N. Ananthram [2004] 266 ITR 470 by thi....
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.... that order is to be interpreted as permitting recalling of the original order, then the original order ceases to exist arid a fresh original order is made. Recalling the original order involves rehearing of the matter which is not the purpose and intention of the provision for rectification. Where the wording of the statutory provision is clear and unambiguous and can be given effect without any difficulty, it is not permissible to give an extended meaning to the provision. The words "amend the original order to rectify any mistake apparent from the record" does not mean recall the original order, rehear the matter and replace the original order by a fresh order. The purpose can be achieved by continuing the original order and passing an amendment order stating whatever is necessary to rectify the mistake apparent from the record. Whether the issue involved is one or more makes no difference, as what is contemplated and provided for is an amendment to the original order and not an order in substitution of the original order. It is true that when the original order is made without notice, or without hearing, the order will be recalled and a fresh order is passed after rehearing.....