TaxTMI 
TaxTMI 
2003 (3) TMI 70
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....istration dated February 20, 1998, under section 12A of the Act by the Commissioner of Income-tax, Rajkot. The Assessing Officer vide assessment order dated February 3, 1999, rejected the claim for exemption under section 11 of the Act. The assessee went in appeal before the Commissioner of Income-tax (Appeal)-I, Rajkot. However, on February 28, 2000, the Commissioner of Income-tax (Appeals) confirmed the order of the Assessing Officer denying exemption under section 11 of the Act. The assessee preferred second appeal before the Income-tax Appellate Tribunal, Rajkot Bench, Rajkot, which came to be registered as I.T.A. No. 69 Rajkot of 2000. The Tribunal for the reasons stated in its order dated October 27, 2000, confirmed the orders of the Assessing Officer and the Commissioner of Income-tax (Appeals). The assessee filed a miscellaneous application dated November 13, 2000, seeking rectification of the aforesaid order dated October 27, 2000. In the said miscellaneous application various mistakes of facts and law were pointed out. One of the principal contentions raised in the miscellaneous application was that the applicant-assessee had relied upon a decision of this court in ....
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....ring on behalf of the petitioner, contended that: (a) The Tribunal had wrongly exercised jurisdiction under section 254(2) of the Act; (b) Section 254(2) of the Act only permitted amendment of an order with a view to rectifying a mistake apparent from the record, and the said provision did not permit review in the guise of rectification; (c) The Tribunal was a creature of the statute as could be seen from the provision of section 252 of the Act and hence it could not go beyond the powers granted under the Act; (d) Under section 254(4) of the Act the order passed by the Tribunal in appeal was final and by purported exercise under section 254(2) of the Act such finality could not be disturbed; (e) There was no mistake in the order dated October 27, 2000, and alternatively there was no mistake apparent from the record; (f) The appeal was heard by the Rajkot Bench, of the Tribunal while the miscellaneous application was heard and disposed of by order dated September 5, 2001, by Ahmedabad Bench "C" despite the fact that the Rajkot Bench had in the meantime started functioning from May 28, 2001; (g) The Tribunal did not have power to recall its order as could be seen....
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....ion but had participated in the hearing of the miscellaneous application before the Ahmedabad Bench; (d) That rule 34A of the Tribunal rules itself provided for posting rectification applications for hearing; (e) That various judgments regarding review jurisdiction relied on by the petitioner were not applicable on the facts of the case; (f) That whether an order was required to be recalled or not before rectification could be made would depend on the facts of the case and the issue involved; (g) That the Tribunal in the impugned order dated September 5, 2001, had posted the appeal for rehearing and no prejudice had been caused to the petitioner by the said order and no vested right could be claimed by the petitioner. The parties before us are at ad idem that the Tribunal has jurisdiction to rectify but it has no jurisdiction or power to review its own order. There is no dispute as regards the well settled proposition that power of review is not an inherent power and must be conferred by law, either specifically or by necessary implication. The only point wherein the parties joined issue is whether there is a mistake apparent from the record and if yes, what should b....
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....er an administrative order taking into consideration the fact that the Rajkot Bench was not available. Once the miscellaneous application had been validly transferred under a valid and legal order of transfer by way of an administrative exigency, unless a fresh order retransferring the matter from the Ahmedabad Bench to the Rajkot Bench was made it would be the Ahmedabad Bench which would be seized of the jurisdiction to hear and determine the miscellaneous application. The contention of the petitioner on this count cannot be countenanced and is devoid of any merit. The petitioner not only filed his written objections to the miscellaneous application but was also heard through his representative. Thus no prejudice has been suffered by the petitioner on this count. Section 254 of the Act as is material for the purpose reads as under: "254. Orders of Appellate Tribunal.--(1) The Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. (2) The Appellate Tribunal may, at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend....
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.... in section 256 or section 260A of the Act. It may be noted that the language employed in the orders passed by the Tribunal on appeal. The order passed on appeal can be an order passed under sub-section (1) of section 254 of the Act or it could be an order passed under sub-section (1) as amended by an order under subsection (2) of section 254 of the Act. In both the situations an order would none the less remain an order on appeal. As already seen hereinbefore, the Tribunal has power to rectify the mistake apparent from the record in two situations. One is on its motion and the other is on an application being made by a party before it. It cannot be contended that if a Tribunal is given power to rectify its own mistake on its own motion, that power excludes the power to rectify the same mistake at the instance of a party or when the attention of the Tribunal is drawn to the said mistake by a party to the appeal. The power to rectify on its own motion is a larger power than the power to rectify on the application of a party. When the statute confers a power on Tribunal to make an order on the application of a party it is limited to rectification of the mistakes pointed out in the....
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....ived is correct only up to a stage. Once a party brings to the notice of the Tribunal that an important point or contention raised by the party has not been dealt with it would be within the jurisdiction and powers of the Tribunal to decide whether the same constitutes a mistake apparent from the record and thereafter, if necessary, reopen the appeal. Such a power is inherent in the Tribunal, as a party has suffered prejudice due to a lapse on the part of the Tribunal and not on account of any fault of such a party. An act of the Tribunal should not prejudice a party so as to force the party into unwarranted litigation. The principle which forms the basis for undertaking review of an order or judgment would be equally applicable in cases of exercise of powers of rectification. The principle is: "18. Justice is a virtue which transcends all barriers. Neither the rules of procedure nor technicalities of law can stand in its way. The order of the court should not be prejudicial to anyone. Rule of stare decisis is adhered for consistency but it is not as inflexible in administrative law as in public law. Even the law bends before justice. Entire concept of writ jurisdiction exerc....
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....cord'." The provisions of sections 154 and 254(2) of the Act, section 35 of the Indian Income-tax Act, 1922, section 35 of the Wealth-tax Act, 1957, and section 13 of the Companies (Profits) Surtax Act, 1964, are pari materia. Though the Supreme Court and various High Courts have sought to lay down precisely what is a mistake apparent from the record or an error apparent on the face of the record it has been difficult to provide a definite comprehensive definition. Various factors like: mistake/error should be self-evident, should not be debatable, should not be arrived at after long drawn out process of reasoning, etc., are more easily stated. It is the applicability to the facts and circumstances of a case which raises difficulties. A question can thus be posed: In what circumstances or situation can a writ of certiorari issue? This is what is laid down by a Constitutional Bench of the Supreme Court in the case of Hari Vishnu Kamath v. Ahmad Ishaque, AIR 1955 SC 233: "In T.C. Basappa v. T. Nagappa, AIR 1954 SC 440, the law was thus stated: 'An error in the decision or determination itself may also be amenable to a writ of "certiorari;" but it must be a "manifest error....
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....uld not be subjected to a rigorous construction but should be construed in a manner which makes the machinery workable. Procedural provisions should be so construed as to subserve the course of justice and not to hinder it. Hearing of an appeal and passing an order thereon is a part of the machinery prescribed for collection and recovery of tax. The power to make an order encompasses within its fold the power to rectify. Rule 24 of the Tribunal Rules provides for hearing of an appeal ex parte for default by the appellant and by virtue of the proviso under the said rule it is laid down that where an appeal has been disposed of in the absence of the appellant and the appellant appears afterwards and satisfies the Tribunal that there was sufficient cause for his non-appearance, when the appeal was called on for hearing, the Tribunal shall make an order setting aside the ex parte order and restore the appeal. On the basis of this rule it was contended on behalf of the petitioner that in no other situation can an appeal be restored to file and hence the impugned order dated September 5, 2001, was bad in law and deserved to be quashed and set aside. Rule 24 of the Tribunal Rules is an....
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....e application shall dispose of it after hearing both the parties to the application, but an exception has been carved out by the portion in parentheses whereby it is stipulated that unless the President, Senior Vice-President, Vice-President or the senior member present at the station otherwise directs. That means if any of the aforesaid authorities directs that the miscellaneous application shall be heard by a Bench comprised of the members other than the Bench which heard the appeal, such other Bench would hear and dispose of the miscellaneous application. This rule does nothing else but provide for an administrative contingency. In case one or both members comprising the Bench which heard the appeal are transferred, or retired or for any other reason are not available to hear the miscellaneous application (which should be filed within a period of four years from the date of the order in appeal), a situation cannot be permitted to come about whereby the miscellaneous application may not be proceeded with in the absence of the original Bench being available. In fact, in the present case, this very situation came about and hence the order transferring miscellaneous application from....
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.... computing its net wealth. The said claim was disallowed by the Assessing Officer as according to him the provision for tax liability did not constitute a "debt owed" on the valuation date. Though the said assessment was not challenged by way of appeal, when the petitioner came to know subsequently about a decision of the Tribunal allowing such a claim in some other case, the petitioner applied to the Assessing Officer for rectifying the assessment order under section 35 of the Wealth-tax Act, 1957. The said application came to be rejected on the ground that there was no mistake apparent on the face of the record. The petitioner filed a revision application before the Commissioner of Wealth-tax but did not succeed. Thereupon the petitioner applied to the High Court for exercising writ jurisdiction to quash the order and for a direction to rectify the assessment order. The High Court after referring to the earlier decision of this court in the case of CWT v. Raipur Manufacturing Co. Ltd. [1964] 52 ITR 482 and of the Supreme Court in the case of Kesoram Industries and Cotton Mills Ltd. v. CWT [1966] 59 ITR 767, held that the provision for taxation was a "debt owed" and was deductible....
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....tial order, i.e., how should the original order be rectified and in what form must the amendment be carried out. In the case of Sidhramappa Andannappa Manvi v. CIT [1952] 21 ITR 333 (Bom), almost a similar contention was raised before the Bombay High Court on behalf of the assessee as is raised on behalf of the Revenue in the present petition. It is contended by Mr. Desai that in the guise of rectification it is not open to the Tribunal to pass an order which is contrary to the order already passed. The Bombay High Court has dealt with the contention as follows: "But the more substantial question raised by Mr. Kola is as to the power of the Tribunal to rectify the mistake. Now the power is undoubtedly a limited power; it is not a power of revision or review, but it is limited to correcting only those mistakes which are apparent on the record. A mistake must be patent on the record; it must not be a mistake which can be discovered by a process of elucidation, or argument, or debate. The mistake being patent on the record, rectification must be limited to correcting that mistake only without any further argument or debate. The rectification must follow as a necessary logical conse....