ART HOUSING FINANCE (INDIA) LIMITED,GURGAON V. DCIT CIRCLE-3(1), NEW DELHI

MA 245/DEL/2025

AI Insights

The case involves Art Housing Finance (India) Limited, the appellant, seeking a recall of the Tribunal's order concerning disallowances made on commission and professional expenses for the assessment year 2016-17. The Tribunal had previously reduced the disallowances from 10% to 4% based on the absence of comparable data in the same line of business for estimating the adhoc disallowance. The Assessee's Miscellaneous Application argued for a further reduction, claiming an error in the Tribunal's earlier decision. However, the Tribunal found no mistake apparent on record and dismissed the application, citing legal precedents that restrict the scope of rectification to errors apparent from the record, not errors of judgment or oversight.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717069 (ITAT-DELHI)
• Duration Of Justice: 1 month(s) 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-08-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Appeal Filed On: 09-07-2025
• Other Referred Cases: Ras Bihari Bansal vs. C.I.T. (2007) 293 ITR 365, C.I.T. vs. Hindustan Coca Cola Beverages P. Ltd. (2007) 293 ITR 163
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH
• Assessee Lawyers: MANOJ AGARWAL

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘A’-FRIDAY’ : NEW DELHI) BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER M.A. NO. 245/DEL/2025 IN ITA No. 7635/Del/2019 Asstt. Year : 2016-17 Art Housing Finance (India) Limited, vs. DCIT, Circle 3(1), 49, Udyog Vihar, Phase-IV, New Delhi Gurgaon, Haryana-122015 (PAN: AAGCR4981A) (Appellant) (Respondent) Appellant by : Sh. Manoj Agarwal, CA Respondent by : Sh. Om Prakash, Sr. DR. Date of Hearing 25.07.2025 Date of Pronouncement 22.08.2025 ORDER PER MAHAVIR SINGH, VP: By way of this Miscellaneous Application assessee seeks recall of the order of this Tribunal passed in Assessee’s I.T.A. No. 7635/Del/2019 for AY 2016-17 vide order dated 09.07.2025. Ld. Counsel for the assessee reiterated the contentions made in the said Misc. Application, which read as under:- Printed from counselvise.com 2 | P a g e Printed from counselvise.com 3 | P a g e Printed from counselvise.com 4 | P a g e 2. On the other hand, Ld. DR for the Revenue stated that the Bench has passed a well-reasoned order after perusing the records available and rightly partly allowed the appeal of the Assessee. He further stated that Ld. Counsel for the Assessee did not establish any mistake apparent on record and by way of this Misc. Application only seeks review in the garb of rectification which is not permissible under the law. Therefore, the Misc. Application filed by the Assessee may be dismissed accordingly. 3. We have heard both the parties and perused the records available with us especially the Tribunal’s order dated 09.07.2025 passed in the corresponding Appeal being ITA No. 7635/Del/2019 (AY 2016-17) alongwith the contentions raised by the assessee in the present Misc. Printed from counselvise.com 5 | P a g e Application, which are reproduced as aforesaid, we are of the considered view that Tribunal vide its order dated 09.07.2025 has restricted the disallowances from 10% to 4% on account of disallowance of commission expenses amounting to Rs. 3,61,775/- and disallowance of Rs. 5,43,145/- on account of professional expenses & advt. expenses only due to the fact that as the assessee has not been able to prove his claim nor the department could draw any comparable in the very line of business for estimating the adhoc disallowance @10% for both the disallowances. Therefore, the Tribunal in the larger interest of justice restrict both the aforesaid additions to @4% from 10% as estimated by the Ld. CIT(A), which in our view, do not require any rectification as the Assessee did not establish any mistake apparent on record in the tribunal’s order dated 09.07.2025. 4. Keeping in view of the aforesaid discussions and after perusing the contents of the instant misc. application, as reproduced above as well as findings of the Tribunal’s in its order dated 09.07.2025, we are of the view that there is no apparent mistake in Tribunal’s well reasoned order dated 09.07.2025, hence, the same do not require any rectification, as there is no apparent mistake in the said order dated 09.07.2025. We are further of the view that by way of this Misc. Application Assessee seek review in the garb of rectification which is not permissible under the law. In this regard, we find that it is a settled law that review in the garb of rectification is not permissible u/s. 254(2) of the I.T. Act. 5. We draw support from the decision of the Hon’ble Delhi High Court’s exposition on the scope of rectification u/s 254(2) as reported in the case of Ras Bihari Bansal vs. C.I.T. (2007) 293 ITR 365 is as under:- Printed from counselvise.com 6 | P a g e “Section 254 of the Income Tax Act, 1961, enables the concerned to rectify any “mistake apparent from the record”. It is well settled that an oversight of a fact cannot constitute an apparent mistake rectifiable under this section. Similarly, failure of the tribunal to consider an argument advanced by either party for arriving at a conclusion, is not an error apparent on record, although it may be an error of judgment. The mere fact that the tribunal had not allowed a deduction, even if the conclusion is wrong, will be no ground for moving an application under section 254(2) of the Act. Further, in the garb of an application for rectification, the assessee cannot be permitted to reopen and re-argue the whole matter, which is beyond the scope of the section.” 6. We further draw support from the decision of the Hon’ble Delhi High Court decision in the case of C.I.T. vs. Hindustan Coca Cola Beverages P. Ltd. (2007) 293 ITR 163 has dealt with the issue as under:- “Under section 254(2) of the Income Tax Act, 1961, the tribunal has the power to rectify mistakes in its order. However, it is plain that the power to rectify a mistake is not equivalent to a power to review or recall the order sought to be rectified. Rectification is a species of the larger concept of review. Although it is possible that the prerequisite for exercise of either power may be similar (a mistake apparent from the record), by its very nature the power to rectify a mistake cannot result in the recall and review of the order sought to be rectified.” 7. In view of the aforesaid factual matrix and circumstances of the case, in our considered opinion, we find that there is no mistake apparent on record in the order of the Tribunal and assessee is seeking a review of the Tribunal’s order in the garb of rectification, which is not permissible u/s. 254(2) of the I.T. Act and, therefore, the present Miscellaneous Application, being devoid of any merit, is dismissed as such. Printed from counselvise.com 7 | P a g e 8. In the result, the Misc. Application filed by the Assessee stand dismissed. Order pronounced in the Open Court on 22.08.2025. Sd/- Sd/- (AMITABH SHUKLA) (MAHAVIR SINGH) ACCOUNTANT MEMBER VICE PRESIDENT Date: 22/08/2025 SRBhatnaggar Copy forwarded to: - 1. Appellant 2. Respondent 3. DIT 4. CIT (A) 5. DR, ITAT Assistant Registrar, ITAT, DELHI Printed from counselvise.com "