TaxTMI 
TaxTMI 
2002 (8) TMI 263
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....nducted by the department was illegal. (ii) that the assessee had argued before the Tribunal that the whole search proceedings initiated against the assessee were vitiated in view of the violation of section 132(8) and 132(9A) of IT Act by the Department but the Tribunal has not mentioned anything regarding violation of the provisions of section 132(8) of IT Act in its order and decided the point against the assessee which was a mistake apparent from record. (iii) that the Ground No. 2 of the appeal, w.r.t. addition of Rs. 2,08,250 on account of alleged storage charges on the basis of alleged entries in the Document No. 3, was decided by the Bench without considering the following submissions made by the assessee before the Tribunal: "that the Document No. 3 did not constitute regular books of account. The same was denied as belonging to the partners or the Accountant-cum-Manager of this firm. Hence the contents of the same could not be relied upon and the onus of its authorship and its relevance in the assessment proceedings shifted on the revenue. The revenue failed to bring any evidence whatsoever to prove the authorship of the said note book including transactions havi....
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.... of appeal taken by the assessee related to completion of assessment in regard of legal provisions and violation of provisions of natural justice. The Bench, after considering the legal provisions, the documents relied upon by the assessee before the Bench and the detailed submissions put-forth by the assessee and by the ld. Departmental Representative, decided the ground of appeal against the assessee while passing the following order: "We have carefully considered the rival submissions and have perused the orders and various documents referred to by both the parties. We feel that the provisions of section 132(9A) have to be examined in the light of the provisions of section 158BD of Chapter XIV-B relating to special procedure for assessment of search cases. Under the provisions of section 158BD the books of account, other documents or assets seized are required to be handed over to the Assessing Officer having jurisdiction over the assessee and that the Assessing Officer has to proceed against the assessee. Thus, the period of 15 days, as mentioned in section 132(9A) is not strictly relevant. We feel that there has been no gross violation of principles of natural justice in th....
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....see by recalculating the charges per bag at Rs. 47." 6. In this light of the background, we proceed to decide the present application filed by the assessee mainly on the point that violation of provisions of section 132 by the Department, though argued before the Bench, was not decided and secondly that the submissions of the assessee, have not been considered by the Tribunal while passing order and hence this mistake apparent from record has occurred in the order of the Bench and so, the same requires to be rectified. 7. In support of his contention, ld. AR for the assessee relied upon the following cases: (i) Anil Rai v. State of Bihar JT [2001] (6) SC 515; (ii) Popular Engg. Co. v. ITAT [2001] 248 ITR 577 (Punj. & Har.); (iii) CIT v. Ramesh Chand Modi [2001] 249 ITR 323 (Raj.); (iv) Karan & Co. v. ITAT [2002] 253 ITR 131 (Delhi); (v) Rahulkumar Bajaj v. ITO [1999] 69 ITD 1 (Nag.) (SB); (vi) Munibyrappa v. CIT [2001] 119 Taxman 204 (Kar.); (vii) Asstt. CIT v. Shri Ramesh Chand Modi [2002] 17 ITR 372 (ITAT Jodh.) (NOC). 8. On the other hand the main thrust of the arguments of ld. DR. before us was that the reasons mentioned in the application of the a....
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.... it does not empower the Appellate Tribunal to review its own order and recall its earlier order under the garb of rectification, the Tribunal cannot exercise the power of recall and review its earlier order. (iii) In the case of ITAT, the Hon'ble Orissa High Court held that even assuming that the original conclusion of the Tribunal was erroneous, it could not be characterised as a mistake rectifiable under section 254(2). (iv) Hon'ble High Court of Bombay in the case of Ramesh Electric & Trading Co. held that it is an accepted position that the Appellate Tribunal does not have any power to review its own orders under the provisions of Act. The only power which the Tribunal possesses is to rectify any mistake in its own order which is apparent from the record. This is merely a power of amending its order. The power of rectification under section 254(2) can be exercised only when the mistake which is sought to be rectified is an obvious and patent mistake which is apparent from the record, and not a mistake which requires to be established by arguments and a long drawn process of reasoning on points on which there may conceivably be two opinions, Failure of the Tribunal to con....
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....Ballabh Prasad Agarwalla the Hon'ble Calcutta High Court at relevant page 358, while giving the meaning of word 'review' observed: "It is not in dispute that the Tribunal or a statutory body has not inherent power of review, the power of review must be expressly conferred by the statute. Review of an order means re-examination or to give a second view of the matter for the purpose of alteration or reversal of the view already taken after changing the earlier opinion or view." (ix) In the case of Popular Engineering Co. Hon'ble jurisdictional High Court of Punjab & Haryana observed: "A perusal of section 254 of Income-tax Act, 1961 that under sub-section (1) of section 254 the appellate Tribunal can, after hearing the parties to the appeal, pass such orders as it thinks fit. Sub section (2) of section 254 empowers the Appellate Tribunal to amend any order passed by it under sub-section (1) with a view to rectify any mistake apparent from the record. In the exercise of powers vested in it under section 254(2) the Tribunal cannot review or revise an order made under section 254(1) though it may amend such order for rectifying a patent mistake which may have crept in, in such ....
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....R for the assessee, Spl. Bench of ITAT Nagpur has held: "Section 254(2) specialty empowers the Tribunal to rectify any apparent mistake in an order passed by it. Even without such specific provisions, the Tribunal has inherent power to set aside an order deciding an appeal on wrong grounds. The inherent power to rectify a wrong committed by itself, by a Court or a Tribunal is not readily speaking a power to review. It is the atonement to the wronged party by the Court or the Tribunal for the wrong that it has itself committed. The two powers operate in different fields and are different in essential quality or nature. It is the basic principles of jurisprudence that if there is a mistake committed by the Court or the Tribunal, if needs to be rectified as no one should suffer or come to grief on account of the mistake committed by the Court. Even the rules of procedure and technicalities should not come in the way in rendering the justice to parties by correcting the mistakes committed by the Court or the Tribunal. Rectification of an order stamps from the fundamental principle that justice is above all. It is exercised to remove error and not for disturbing finality. The purpose....
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....ppellant not considered by ITAT while passing that judgment--Whether it, will tantamount to review which power is not vested in the Tribunal--Held, no--Recalling an order for correcting an apparent mistake in procedural aspect cannot be equated with review--Where a Tribunal fails to notice a question raised before it inadvertantly under any misapprehension, correcting such error by recalling the order for deciding such question, which goes to the root of the matter, appropriately falls in such category of procedural mistake which the Tribunal must correct ex-debit justice, even in the absence of any express power." 12. The contention put forth by the ld. counsel is founded on the premise that recalling of the order for making a fresh order amounts to rectification and not review of the order. In order to support this contention, he submitted that while referring to the decision of Apex Court delivered in the case of Anil Rai, that, in the instant case of the assessee, arguments were heard by the Tribunal on 12-11-1998 but the order was delivered on 29-10-1999 which resulted into miscarriage of justice as certain submissions and arguments escaped the notice of the Tribunal while ....
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....ling the orders only for reviewing the mistake apparent on record conferring power on the Tribunal under section 254(2) of IT Act and not beyond that. Hence we find no merits in the arguments of ld. AR for the assessee for recalling the order merely on the basis of inordinate delay in the delivery of the order of the Tribunal. Since it is not within the scope of powers of the Tribunal conferred under section 254(2) of IT Act. 14. In the instant case of the assessee, we would like to mention that, in the entire order of the Tribunal dated 29-10-1999 the ld. counsel has neither been able to point out any patent mistake or an obvious mistake of clerical, grammatical or arithmetical or like nature for rectification which could be done without hearing the re-arguments of the parties on the points mentioned by the assessee in its application or without re-appraisal of the facts from the records of the case. We may further mention that ld. counsel has not been able to point out any ground taken by the assessee before the Bench in the appeal or any issue arising therefrom which remained undecided by the Tribunal in its order. The only thrust of the arguments of ld. counsel hinges around....
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....d that there cannot be any dispute with the proposition that the power under sub-section (2) of section 254 is to rectify a mistake apparent from the record once such mistake is brought to the notice of the Tribunal either by the assessee or by the ITO. But that power does not clothe the Tribunal with the Tribunal with the jurisdictionto review its earlier decision of to rewrite a fresh judgment.' 17. It is important to mention here that the decision of Delhi High Court in the case of Karan & Co. has been relied upon by both the parties in order to support their rival submissions. In order to canvass his point, ld. counsel relied upon the following portion of the headnote of the citation: "On a rectification application under section 254(2) of Income-tax Act, 1961, on 20-10-1994 filed by the Department, the Appellate Tribunal allowed this application, observing that since the vital information in the form of court proceedings was not before the Assessing Officer the observation made in its appellate order dated 24-11-1993 without appreciating this position constituted a mistake apparent from the record, Accordingly, it held that 'to the extent the order of the ITAT would stan....
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....o to be rectified. Even in the instant case of the assessee, we reiterate that recalling of the order on the points detailed in the petition of the assessee would necessitate rehearing and readjudication of the entire subject matter of the appeal. So, the dispute no longer remains restricted to any mistake sought to be rectified and the same was held to be not permissible under section 254(2) of IT Act by the Hon'ble Delhi High Court. In this view of the matter, even this contention of the ld. counsel has no merit and the same is rejected. 20. In the case of Ramesh Chand Modi relied upon by the ld. counsel we find that it does not apply to the facts of the instant case of the assessee because in that case decided by the Hon'ble High Court, the Tribunal had not decided Ground Nos. 31 to 42 of the appeal raised before it. In those circumstances, High Court held that the Tribunal was justified in recalling its order for hearing the appeal afresh for deciding the grounds in accordance with law whereas the assessee has not been able to point out any ground of appeal taken by the assessee or any issue arising therefrom, which remained undecided by the Tribunal in the appeal of the ass....
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....ake which may have crept in such order.' 24. Now according to the assessee, the arguments raised by its counsel before the Tribunal have not been considered by the Tribunal in its order so in view of the ratio of the decisions in the case of Popular Engg. Co. impugned order of the Bench can be recalled whereas on the other hand ld. Departmental Representative relied upon the ratio of the decision to contend that since the assessee has not been able to point out any mistake apparent from record in the impugned order of the Bench, so, recalling of the order on the ground that the arguments advanced by the assessee, were not considered by the Tribunal, would amount to reviewing of initial order passed by the Bench constituting the members who are not the Members constituting present Bench for deciding this application arising out of that order. There is nothing on record which can be brought to the notice of the Bench to show that the arguments alleged to have been not considered by the erstwhile Bench were urged before the Bench at the time of hearing. We agree with these submissions of ld. Departmental Representative that in the existing facts and circumstances of the instant cas....