TaxTMI 
TaxTMI 
2025 (9) TMI 1037
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....en filed seeking setting aside of the Order dated 17th September 2024 passed by the ITAT, under Section 254(1) of the IT Act, in I.T. Appeal No. 299/Pune/2021. WRIT PETITION NO. 1489 OF 2025 3. Rule. Rule made returnable forthwith. Heard finally by consent of the parties. 4. Before we consider the issues involved in this Writ Petition, it would be appropriate to set out the relevant facts of the matter. 5. The Petitioner filed his return of income for the AY 2019-20 on 5th October, 2019 declaring an income of Rs. 1,19,20,710/-. 6. The said return was processed and an intimation was issued to the Petitioner on 14th May, 2020 u/s 143(1) of the IT Act. In the said intimation, inter alia, an adjustment was made and a sum of Rs. 57,92,151/- was disallowed and added to the total income, being the amount received from the employees as contribution to any provident fund, superannuation fund etc. and not paid within the due dates prescribed u/s 36(1)(va) of the IT Act. This adjustment was made apparently u/s sub-sections (i), (ii) and (iv) of Section 143(1)(a). It is the case of the Petitioner that, prior to such adjustment, a proposal was sent and which was duly replied to. ....
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....l the Order dated 5th September, 2022. The Miscellaneous Application was heard on 19th July, 2024. At the hearing of the said Miscellaneous Application, the Petitioner relied upon the decision of the Mumbai Bench of the ITAT in DCIT vs. ANI Integrated Services Ltd. [2024] 162 taxmann.com 889 and submitted that, since the judgement in the case of Checkmate Services (supra) was passed after the Order of the ITAT [dated 5th September 2022], the judgement in Checkmate Services (supra), which was a subsequent decision, could not be the basis for recalling the Order dated 5th September 2022 on the ground that there was a mistake apparent from the record. 12. However, by Order dated 17th September 2024, the ITAT allowed the said Miscellaneous Application of the Revenue by relying upon the decision of the Hon'ble Supreme Court in Checkmate Services (supra) [which was a subsequent decision], and recalled its Order dated 5th September 2022. Further, by the said Order dated 17th September 2024, the ITAT also dismissed the Appeal filed by the Petitioner. Further, in coming to the conclusion that the judgement of the Hon'ble Supreme court in Checkmate Services (supra), which was passed subse....
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...."...(T)he theory of case law is that a judge does not make law; he merely declares it; and the overruling of a previous decision is a declaration that the supposed rule never was law. Hence any intermediate transactions made on the strength of the supposed rule are governed by the law established in the overruling decision. The overruling is retrospective, except as regards matters that are res judicata accounts that have been settled in the meantime". 14.2 In the case of Saurashtra Kutch Stock Exchange Ltd. (supra), the Hon'ble Supreme Court upheld the order of the ITAT, exercising power under Section 254(2) and rectifying a "mistake apparent from the record", on the basis of a decision that was delivered few months prior to the decision of the ITAT. This is clear from paragraph 47 of the said judgement, which reads as follows: "47. In the present case, according to the assessee, the Tribunal decided the matter on October 27, 2000. Hiralal Bhagwati was decided few months prior to that decision, but it was not brought to the attention of the Tribunal. In our opinion, in the circumstances, the Tribunal has not committed any error of law or of jurisdiction in exercising p....
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....e case in which such expressions are to be found. The other is that a case is only an authority for what it actually decides. I entirely deny that it can be quoted for a proposition that may seem to follow logically from it. Such a mode of reasoning assumes that the law is necessarily a logical Code, whereas every lawyer must acknowledge that the law is not always logical at all." (emphasis supplied) We entirely agree with the above observations. 15. In Ambica Quarry Works vs. State of Gujarat & others (vide SCC p.211, para18 ) this Court observed: "18. The ratio of any decision must be understood in the background of the facts of that case. It has been said a long time ago that a case is only an authority for what it actually decides, and not what logically follows from it." 16. In Bhavnagar University vs. Palitana Sugar Mills Pvt. Ltd.(vide SCC p. 130, para 59) this Court observed: "59. ...It is well settled that a little difference in facts or additional facts may make a lot of difference in the precedential value of a decision." (emphasis supplied) 17. As held in Bharat Petroleum Corpn. Ltd. v. N.R. Vairama....
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.... 12. The following words of Lord Hidayatullah,J. in the matter of applying precedents have become locus classicus:(Abdul Kayoom v. CIT, AIR p.688, para 19 ) '19. Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect, in deciding such cases, one should avoid the temptation to decide cases (as said by Cardozo) by matching the colour of one case against the colour of another. To decide therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive.' * * * 'Precedent should be followed only so far as it marks the path of justice, but you must cut the dead wood and trim off the side branches else you will find yourself lost in thickets and branches. My plea is to keep the path of justice clear of obstructions which could impede it.' " (emphasis supplied) 18. We have referred to the aforesaid decisions and the principles laid down therein, because often decisions are cited for a proposition without reading the entire decision and the reasoning contained therein. In our opinion, t....
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....as not a ground for review of such judgement. Hence, the said Explanation under Order 47 Rule 1 of the CPC expressly bars a review on the ground that there is a mistake apparent on the face of the record on the basis of a subsequent decision of a Court. 17. Further, this exposition of law in respect of the Explanation under Order 47 Rule 1 has been confirmed by a decision of the Hon'ble Supreme Court in Commissioner of Income-tax vs. Gracemac Corporation (2023) 456 ITR 135. Paragraph 5 of the said judgement is relevant and reads as under: "Apart from this, it has also been brought to our notice by the learned Additional Solicitor General that in Microsoft Corporation (MS Corp) bearing SLP (C) Diary No. 7076 of 2023, (Since Reported as CIT(International Taxation) v. Microsoft Corporation (MS Corp) [2023] 453 ITR 746 (SC) a coordinate Bench of this Court by an order dated March 20.2023 dismissed the special leave petition and liberty has been reserved to reopen and/or revive the special leave petition in the event the review petition in Engineering Analysis Centre of Excellence Pvt. Ltd. (supra) is allowed. In our view, as on today, Engineering Analysis Centre of Excellen....
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.... Hon'ble Supreme Court. Justice Nagarathna, whilst disagreeing with Justice M.R. Shah, held that, in view of a specific bar created by the Explanation to Rule 1 of Order 47 of the Code of Civil Procedure, 1908, the Review Petition could not be entertained by taking into consideration a subsequent overruling of a determined judgement. Paragraphs 67 and 68 of the said disagreeing opinion of Justice Nagarathna referred to the decision of the Hon'ble Supreme Court in Saurashtra Kutch Stock Exchange Ltd. (supra) whilst coming to the said view. Paragraphs 67 and 68 of the said disagreeing opinion of Justice Nagarathna reads as under: "67. Similarly, reliance was placed on Assistant CIT v. Saurashtra Kutch Stock Exchange Ltd. A judgement which was pronounced earlier by a superior Court and holding the field, was not noticed by the Income Tax Appellate Tribunal, subsequently, while deciding a matter. Hence, it was observed that there was a mistake apparent from the record as there was non-consideration of a binding decision of superior Court by the said Tribunal. Hence, the same could be rectified under Section 254(2) of the Income Tax Act, 1961. 68. The above decision in....
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....a subsequent judgement is rendered by a superior court, then the order of the Tribunal should be recalled within the scope of Section 254(2) of the IT Act. Paragraphs 20 to 22 of the said judgement are relevant and are set out hereunder: "20. We are aware that many of the Co-ordinate Benches have recalled the order of the Tribunal on this issue on the principle of the Hon'ble Supreme Court in the case of Asstt. CIT v. Saurashtra Kutch Stock Exchange Ltd. [2008]173 Taxman 322/305 ITR 227. In the aforesaid case the issue was that the Tribunal has passed an order on 27/10/2000 upholding the decision of CIT that assessee was not entitled for exemption u/s.11. Thereafter, the Miscellaneous Application was filed u/s. 254(2) to rectify the error committed by the Tribunal in the decision rendered by any appeal as it has not followed the judgement of the Hon'ble Jurisdictional High Court in the case of Hiralal Bhagwati vs. CIT reported in [2000] 246 ITR 188(Guj.) ; Suhrid Geigy Ltd vs. Commissioner of Surtax [1999] [1999] 107 Taxman 347/237 ITR 834(Guj.) which was already available on the date of the order. Thus, non- consideration of binding decision of the Jurisdictional ....
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.... that there would be no review or recall of the order based on the subsequent judgement. Finally, the Hon'ble Supreme Court in the case of Saurashtra Kutch Stock Exchange Ltd. on the fact of the case has concluded as under:- "In the present case, according to the assessee, the Tribunal decided the matter on October 27, 2000. Hiralal Bhagwati was, decided a few months prior to that decision, but it was not brought to the attention of the Tribunal In our opinion, in the circumstances, the Tribunal has not committed any error of law or of jurisdiction in exercising power under sub-section (2) of section 254 of the Act and in rectifying the "mistake apparent from the record" Since no error was committed by the Tribunal in rectifying the mistake, the High Court was not wrong in confirming the said order Both the orders, therefore, in our opinion, are strictly in consonance with law and no interference is called for." 21. The sequitur of the aforesaid decision of the Hon'ble Supreme Court is that, if already existing judgement of Jurisdictional High Court is not brought to the notice or attention of the Tribunal, then the Tribunal can recall the order while exer....
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....ed the existing position in law, as laid down by the Supreme Court or the High Court, so as to bring about a situation that the law declared by the Supreme Court was not followed by the Tribunal and/or the decision of the Tribunal is contrary to the law as laid down by the Supreme Court. Such decision of the Supreme Court which never existed when the Tribunal passed the original order could never have been applied by the Tribunal, and hence it cannot be said that there was any mistake on the face of the record, so as to confer jurisdiction on the Tribunal to exercise its jurisdiction under Section 254(2) of the IT Act. 16. In so far as the petitioner's contention on the jurisdiction of the Tribunal to entertain the Miscellaneous Application is concerned, it appears that the position in law is well settled. The jurisdiction as conferred under sub-Section(2) of Section 254 is akin to the jurisdiction conferred on the Civil Court under the provisions of Order XLVII, Rule 1 of the CPC inter alia to correct mistakes apparent on the face of the record. However, on a comparative reading of sub-Section (2) of Section 254 of the IT Act, and Rule 1 of Order XLVII of CPC, it appe....
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....n under Section 254(2) in passing the impugned order. The petitions accordingly need to succeed. The petitions are allowed in terms of prayer clause (a) of each of these petitions." (emphasis supplied) 23. As far as the judgement of the Gujarat High Court in Suhrid Geygy Limited vs. Commissioner of Surta (99) 107 taxmann.com 347 Gujarat is concerned, the same does hold that if a point is covered by the decision of a jurisdictional court rendered prior or even subsequent to the order of rectification, it could be said to be "mistake apparent from the record" under Section 254(2) of the I.T. Act and could be corrected by the Tribunal. However, in light of the aforesaid position in law, as laid down by various judgements of the Hon'ble Supreme Court and by the judgement of this Court, we are unable to agree with the said conclusion arrived at by the Gujarat High Court. 24. For all the aforesaid reasons, we hold that a subsequent ruling of a Court cannot be a ground for invoking the provisions of Section 254(2) of the IT Act. Section 254(2) of the IT Act can be invoked with a view to rectify any mistake apparent from the record. Admittedly, on the date when the original ....