TaxTMI 
TaxTMI 
2020 (3) TMI 790
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....the Act was carried out on 16.06.1998 in the residence-cum-office premises of Shri. Y. J. Chokshi and his associates - Shri. Rajendra C. Shah and Shri. Jayantilal M. Shah. In the course of the search proceeding, it was found that respondent / assessee had issued certain cheques after depositing cash received from the said persons. Assessee admitted and explained that he was a Hawala operator and accepted cash deposits in bank account while issuing cheques for the said amount to the party; in the process, he earned commission for carrying out such Hawala business. 5. Pursuant to the search operations, block assessment for the period 01.04.1988 to 16.06.1998 was carried out by the assessing authority under Section 158BD of the Act. At the same time, for the assessment year 1999-2000, respondent - assessee filed return of income declaring total income of Rs. 1,94,857.00. The return was processed under Section 143(3) of the Act. Following the assessment proceedings, assessing officer passed assessment order dated 26.03.2002 under Section 143(3) of the Act adding an amount of Rs. 72,89,385.00 to the income of the respondent /assessee as income from undisclosed sources. 6. Responde....
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....e said provision, Tribunal can only rectify a mistake which is apparent from the record. Tribunal has no power to recall its order in entirety. Recalling of an order in entirety is only provided under Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963 which deals with a situation of exparte hearing for default of the appellant. In support of his contention, he has placed reliance on a Division Bench decision of the Delhi High Court in C.I.T. Vs. Income Tax Appellate Tribunal, 293 ITR 118 and a Division Bench decision of the Allahabad High Court in C.I.T. Vs. Kamal Bhai Ismailji, 288 ITR 297. His further contention is that no prejudice has been caused to the respondent / assessee by the order passed by the Tribunal in the quantum appeal in as much as Tribunal had only remanded the matter back to the assessing officer for a fresh decision giving liberty to the respondent / assessee to adduce evidence as well as to make submissions. 12. Per contra, learned counsel for the respondent at the outset submits that the Division Bench decision of the Delhi High Court in C.I.T. Vs. Income Tax Appellate Tribunal (supra) has been overruled by the Full Bench of the same High Court in ....
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....Court. In the instant case, the writ petition has been filed within eight months of passing of the impugned order. In the facts and circumstances of the case, filing of the writ petition within eight months of the impugned order cannot be construed to be a belated filing. That apart, we find that by order dated 17.11.2009, this Court had admitted the writ petition for hearing by issuing Rule. Once a writ petition is admitted for hearing, it necessarily implies that the Court is satisfied about the timely filing of the writ petition and in such circumstances, the writ petition is required to be heard and decided on merit. 16. Having answered the preliminary objection as above, we may now deal with the issue in substance. Since Section 254(2) is central to the debate, the same is referred to and extracted hereunder for ready reference: "254(2) The Appellate Tribunal may, at any time within six months from the end of the month in which the order was passed, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the Assessing ....
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....must be manifest on the face of the record. 18.4. Regarding the second expression i.e., 'amend any order passed by it', we may refer to the decision of the Supreme Court in Honda Siel Power Products Ltd. (supra). In that case, Supreme Court examined the scope of the power of rectification under Section 254(2) of the Act. Supreme Court observed that the purpose behind enactment of Section 254(2) is based on the fundamental principle that no party appearing before the Tribunal, be it the assessee or the Revenue, should suffer on account of any mistake committed by the Tribunal. Clarifying the matter, Supreme Court held that this fundamental principle has nothing to do with the inherent power of the Tribunal or the power of review. This power is vested with the Tribunal to see that no prejudice is caused to either of the parties appearing before the Tribunal by its decision based on a mistake apparent from the record. In the facts and circumstances of that case, Supreme Court held that the Tribunal was justified in exercising its power under Section 254(2) in recalling its order and the High Court had erred in interfering with such decision of the Tribunal. 19. This position has....
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.... Court in K.L. Bhatia [1990] 182 ITR 361 (Delhi), Deeksha Suri [1998] 232 ITR 395, Karan and Co. [2002] 253 ITR 131 (Delhi), J.N. Sahni [2002] 257 ITR 16 (Delhi) and Smt. Baljeet Jolly [2001] 250 ITR 113 (Delhi) which lay down the principle that the tribunal under no circumstances can recall its order in entirety do not lay down the correct statement of law. (C) Any other decision or authority which has been rendered by-pressing reliance on K. L. Bhatia (supra) and the said line of decisions are also to be treated as not laying down the correct proposition of law that the tribunal has no power to recall an order passed by it in exercise of power under Section 254(2) of the Act. (D) The tribunal, while exercising the power of rectification under Section 254(2) of the Act, can recall its order in entirety if it is satisfied that prejudice has resulted to the party which is attributable to the tribunal's mistake, error or omission and which error is a manifest error and it has nothing to do with the doctrine or concept of inherent power of review. (E) When the justification of an order passed by the tribunal recalling its own order is assailed in a writ peti....
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....nce or documents and on this matter, in the interest of justice, we restore the matter back to the Assessing Officer to examine the issue afresh. The assessee is directed to furnish the necessary evidences to prove the genuineness of cash credit to the satisfaction of the Assessing Officer. Order of the CIT(A) is set aside and the matter is restored to the Assessing Officer for fresh consideration." 27. Careful reading of the order passed by the Tribunal, as extracted above, would go to show that the initial assessment order dated 26.03.2002 passed by the assessing officer has not attained finality. No doubt the order of the first appellate authority interfering with the order of assessment has been set aside, but the matter has been remanded back to the assessing officer for fresh consideration. It is open to such further order that the assessing officer may pass on the matter being restored back to him and after hearing the respondent / assessee, who has the liberty to make fresh submissions before the assessing officer. 28. We have carefully perused the miscellaneous application filed by the respondent / assessee before the Tribunal for recall of its order dated 30.04.2008....