M/s. Gopal Builders, Surat V. The Principal Commissioner of Income Tax, Surat

MA 13/SRT/2022

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1763 (ITAT-SURAT)
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 17-08-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 26-05-2022
• Assessment Year: 2013-2014
• Appeal Filed On: 24-02-2022
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Revision of order
• Section: 263; 143(3); 142(1); 254(2); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM MA Nos. 13 & 14/SRT/2022 [Arising in ITA Nos. 634/SRT/2018 & 28/SRT/2019] Assessment Years: (2013-14 to 2014-15) (Physical Court Hearing) M/s. Gopal Builder, 93, Akhand Anand Society, B/h. Swaminarayan Mandir, Adajan, Surat-395009. Vs. The PCIT-1, Surat èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AACFG2281R (Applicant) (Respondent) Assessee by Shri Ashutosh P. Nanavaty, AR Respondent by Shri Vinod Kumar, Sr. DR Date of Hearing 27/05/2022 Date of Pronouncement 18/08/2022 आदेश / O R D E R PER DR. A. L. SAINI, ACCOUNTANT MEMBER: By way of these captioned applications, the assessee has sought to point out that a mistake apparent from record within the meaning of section 254(2) of the Income Tax Act, 1961(in short ‘the Act’) has crept in the order of the Tribunal dated 23.08.2021. 2. The contention of the assessee in this miscellaneous application (in short the “MA”), is that order passed by the Tribunal in ITA No. 634/SRT/2018 for AY.2013-14 and ITA No.28/SRT/2019 for AY. 2014-15, contain mistake apparent from record. The Ld. Counsel for the assessee invited our attention towards para 19 of the Tribunal order dated 23.08.2021 and contended that the notice under section 142(1) of the Act was not submitted at the time of hearing, however it is mentioned in the assessment order that Assessing Officer has Page | 2 MA Nos. 13 & 14/SRT/2022 AYs:2013-14 to 2014-15 Gopal Builders issued notice under section 142(1) of the Act. The Ld. Counsel also submitted that order passed by the Assessing Officer is under section 143(3) of the Act, therefore Assessing Officer should have issued the notice on time. The ld. Counsel submits that ld. PCIT has exercised his jurisdiction on the recommendation of the Assessing Officer and therefore ld. PCIT has not applied his mind, therefore jurisdiction exercised by the ld. PCIT under section 263 of the Act is bad in law, therefore order passed by the Ld. PCIT u/s 263 of the Act should have been quashed. Since Tribunal has not quashed the order of Ld. PCIT, hence, it is mistake apparent from record therefore both the orders of the Tribunal may be re-called. 3. On the other hand, Ld. DR for the Revenue pleads that Tribunal has considered the entire facts of the assessee`s case carefully and then adjudicated both assessees` appeals on merit, hence orders of the Tribunal should not be re- called. 4. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee. We note that during the course of hearing, the Ld. Counsel did not produce before the Bench, the notice under section 142(1) of the Act. The notice under section 142(1) of the Act contains the query raised by the Assessing Officer in respect of the issue raised by the ld. PCIT under section 263 of the Act. The Bench was unable to examine the query raised by the Assessing Officer, that is, whether Assessing Officer has asked the query in respect of the grounds on which ld. PCIT has exercised jurisdiction under section 263 of the Act. Besides, there was no information before the Bench whether Assessing Officer has conducted enquiry by issuing notice under section 142(1) of the Act in respect of the issues raised by the ld. PCIT under section 263 of the Act, therefore in absence of the notice under section 142(1) of the Act, it was held that Assessing Officer did not make enquiry on the issue raised by the ld. PCIT under section 263 of the Act. We note that Tribunal has concluded the issue on merit after considering both sides and Page | 3 MA Nos. 13 & 14/SRT/2022 AYs:2013-14 to 2014-15 Gopal Builders based on the material available at the time of hearing, therefore the decision which is rendered on merits by way of passing a speaking order cannot be rectified. 5.Later on, the assessee filed RTA application before the Department and obtained notice under section 142(1) of the Act. Thus, by way of this Miscellaneous Application, the assessee has produced before the Bench, a new material, [notice u/s 142(1)], which cannot be considered now to revise the order of Tribunal. Only apparent mistake can be corrected, review of the order is not permitted. For that reliance can be placed on the decision of the Co- ordinate Bench of ITAT, Delhi in the case of Prem Colonisers Pvt. Ltd. vs. ITO, Ward-14(3) [in MA No. 130/Del/2012 for AY.2002-03] order dated 12.12.2012 wherein it was held as follows: “3. We have heard both the sides, considered the material on record and before reverting to facts, it would be apt to consider the relevant provisions of law relating to section 254(2). A bare look at section 254(2) of the Act, which deals with rectification, makes it amply clear that a ‘mistake apparent from the record’ is rectifiable. In order to attract the application of section 254(2), a mistake must exist and the same must be apparent from the record. The power to rectify the mistake, however, does not cover cases where a revision or review of the order is intended. ‘Mistake’ means to take or understand wrongly or inaccurately; to make an error in interpreting, it is an error; a fault, a misunderstanding, a misconception. ‘Apparent’ means visible; capable of being seen; easily seen; obvious; plain. A mistake which can be rectified under section 254(2) is one which is patent, which is obvious and whose discovery is not dependent on argument or elaboration. The language used in section 254(2) is permissible where it is brought to the notice of the Tribunal that there is any mistake apparent from the record. Accordingly, the amendment of an order does not mean obliteration of the order originally passed and its substitution by a new order which is not permissible under the provisions of section 254(2). Further, where an error is far from self evident, it ceases to be an apparent error. It is no doubt true that a mistake capable of being rectified under section 254(2) is not confined to clerical or arithmetical mistakes. On the other hand, it does not cover any mistake which may be discovered by a complicated process of investigation, argument or proof. As observed by the Supreme Court in Master Construction Co. (P.) Ltd. v. State of Orissa [1966] 17 STC 360, an error which is apparent on the face of the record should be one which is not an error which depends for its discovery on elaborate arguments on questions of fact or law. A similar view was also expressed in Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tirumale AIR 1960 SC 137. It is to be noted that the language used in Order 47, Rule 1 of the Code of Civil Procedure, 1908 is different from the language used in section 254(2) of the Act. Power is given to various authorities to rectify any ‘mistake apparent from the record’ is undoubtedly not more Page | 4 MA Nos. 13 & 14/SRT/2022 AYs:2013-14 to 2014-15 Gopal Builders than that of the High Court to entertain a writ petition on the basis of ‘an error apparent on the face of the record’. Mistake is an ordinary word, but in taxation laws, it has a special significance. It is not an arithmetical or clerical error alone that comes within its purview. It comprehends errors which, after a judicious probe into the record from which it is supposed to emanate, are discerned. The word ‘mistake’ is inherently indefinite in scope, as what may be a mistake for one may not be one for another. It is mostly subjective and the dividing line in border areas is thin and indiscernible. It is something which a duly and judiciously instructed mind can find out from the record. In order to attract the power to rectify under section 254(2) it is not sufficient if there is merely a mistake in the orders sought to be rectified. The mistake to be rectified must be one apparent from the record. A decision on the debatable point of law or undisputed question of fact is not a mistake apparent from the record. The plain meaning of the word ‘apparent’ is that it must be something which appears to be so ex facie and it is incapable of argument or debate. It is therefore, follows that a decision on a debatable point of law or fact or failure to apply the law to a set of facts which remains to be investigated cannot be corrected by way of rectification. 4. As is apparent from the discussion held in the preceding paragraphs, that a rectification application can lie only with regard to an error on the face of the record which has not emerged from the material on record and moreover, the assessee has not been able to point out any apparent mistake in the order passed by the Tribunal and in case application of the assessee is accepted, it would tantamount to review of the order of the Tribunal, as has rightly been pleaded by the ld. DR, that reviewing of the order of the Tribunal is not permissible and for that purpose useful reference can be made to the following decisions. 4.1 The Hon’ble Calcutta High Court in the case of CIT vs Gokul Chand Agarwal (202 ITR 14), has held as under: “Section 254(2) of the Income Tax Act, 1961, empowers the Tribunal to amend its order passed under section 254(1) to rectify any mistake apparent from the record either suo moto or on an application. The jurisdiction of the Tribunal to amend its order thus depends on whether or not there is a mistake apparent from the record. If, in its order, there is no mistake which is patent and obvious on the basis of the record, the exercise of the jurisdiction by the Tribunal under section 254(2) will be illegal and improper. An oversight of a fact cannot constitute an apparent mistake rectifiable under section 254(2). This might, at the worst, lead to perversity of the order for which the remedy available to the assessee is not under section 254(2) but a reference proceeding under section 256. The normal rule is that the remedy by way of review is a creature of the statute and, unless clothed with such power by the statute, no authority can exercise the power. Review proceedings imply proceedings where a party, as of right, can apply for reconsideration of the matter, already decided upon, after a fresh hearing on the merits of the controversy between the parties. Such remedy is certainly not provided by the Income Tax Act, 1961, in respect of proceedings before the Tribunal.” Page | 5 MA Nos. 13 & 14/SRT/2022 AYs:2013-14 to 2014-15 Gopal Builders 4.2 In similar situation, while dealing with the rectification, the Hon'ble Andhra Pradesh High Court in the case of CIT and Anor vs. I.T.A.T and Anor (206 ITR 126 has held as under: “The appellate Tribunal, being a creature of the statute, has to confine itself in the exercise of its jurisdiction to the enabling or empowering terms of the statute. It has no inherent power. Even otherwise, in cases where specific provision delineates the powers of the court or Tribunal, it cannot draw upon its assumed inherent jurisdiction and pass orders as it pleases. The power of rectification which is specifically conferred on the Tribunal has to be exercised in terms of that provision. It cannot be enlarged on any assumption that the Tribunal has got an inherent power of rectification or review or revision. It is axiomatic that such power of review or revision has to be specifically conferred, it cannot be inferred. Unless there is a mistake apparent from the record in the sense of patent, obvious and clear error or mistake, the Tribunal cannot recall its previous order. If the error or mistake is one which could be established only by long drawn arguments or by a process of investigation and research, it is not a mistake apparent from the record.” 4.3 Further, the Hon'ble Supreme Court in the case of CIT vs Karam Chand Thapar and Br.P.Ltd. (176 ITR 535) has held as under: “APPELLATE TRIBUNAL – DUTY TO CONSIDER CUMULATIVE EFFECT OF CIRCUMSTANCES AND TOTALITY OF FACTS – NO NEED TO STATE SO IN APPELLATE ORDER SPECIFICALLY – INCOME TAX ACT, 1961, SEC. 254,Further it was held as under: “It is equally well settled that the decision of the Tribunal has not to be scrutinized sentence by sentence merely to find out whether all facts have been set out in detail by the Tribunal or whether some incidental fact which appears on the record has not been noticed by the Tribunal in its judgment. If the court, on a fair reading of the judgment of the Tribunal, finds that it has taken into account all relevant material and has not taken into account any irrelevant material in basing its conclusions, the decision of the Tribunal is not liable to be interfered with, unless, of course, the conclusions arrived at by the Tribunal are perverse. It is not necessary for the Tribunal to state in its judgement specifically or in express words that it has taken into account the cumulative effect of the circumstances or has considered the totality of the facts, as if that were a magic formula; if the judgment of the tribunal shows that it has, in fact, done so, there is no reason to interfere with the decision of the Tribunal. Similarly the Bombay High Court in the case of CIT-vs- Ramesh Electric and Trading Co. (203 ITR 497) .............It is an accepted position that the Appellate Tribunal does not have any power to review its own orders under the provisions of the Act. The only power which the Tribunal possesses is to rectify any mistake in its own order which is apparent from the record........ 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 required to be established by arguments and a long drawn process of reasoning on points on which there may conceivably be two opinion. Failure of the Tribunal to consider an argument advanced by either party for arriving at a conclusion is not an error apparent on the record, although it may be an error of judgments........................” Page | 6 MA Nos. 13 & 14/SRT/2022 AYs:2013-14 to 2014-15 Gopal Builders 4.4 We also draw support here from Hon’ble Madras High Court decision in T.C.(A) No. 156 of 2006 dated 21.08.2007 in the case of CIT Vs. Tamil Nadu Small Industries Development Corporation Ltd. wherein the Hon’ble High Court held as under:- “The Tribunal has no power to review its order. When the Tribunal has already decided an issue by applying its mind against the assessee, the same cannot be rectified under Section 254 (2) of the Act. There was no necessity whatsoever on the part of the Tribunal to review its own order. Even after the examination of the judgments of the Tribunal, we could not find a single reason in the whole order as to how the Tribunal is justified and for what reasons. There is no apparent error on the face of the record and thereby the Tribunal sat as an appellate authority over its own order. It is completely impermissible and the Tribunal has traveled out of its jurisdiction to allow a Miscellaneous Petition in the name of reviewing its own order. In the present case, in the guise of rectification, the Tribunal reviewed its earlier order and allowed the Miscellaneous Petition which is not in accordance with law. Section 254(2) of the Act does not contemplate rehearing of the appeal for a fresh disposal and doing so, would obliterate the distinction between the power to rectify mistakes and power to review the order made by the Tribunal. The scope and ambit of the application of Section 254(2) is limited and narrow. It is restricted to rectification of mistakes apparent from the record. Recalling the order obviously would mean passing of a fresh order. Recalling of the order is not permissible under Section 254(2) of the Act. Only glaring and any mistake apparent on the face of the record alone can be rectified and hence anything debatable cannot be a subject matter of rectification.” 4.5 Further, we place reliance upon Hon’ble Delhi High Court exposition on the scope of rectification u/s 254(2) as reported in the case of Ras Bihari Bansal Vs. Commissioner of Income Tax (2007) 293 ITR 365: “Section 254 of the Income Tax Act, 1961, enables the concerned authority 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 the 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.” Therefore, in view of the facts, circumstances, in the light of ratio of decisions cited and discussion as held above, we do not find any substance in the application of the assessee and dismiss the same being devoid of any merits. 5. As a result, this misc. application filed by the assessee gets dismissed.” 6.Thus, it is abundantly clear from the decision of the Coordinate Bench in the case of Prem Colonisers Pvt. Ltd(supra) that failure of the Tribunal to consider Page | 7 MA Nos. 13 & 14/SRT/2022 AYs:2013-14 to 2014-15 Gopal Builders an argument advanced by either party for arriving at a conclusion is not an error apparent on the record, although it may be an error of judgment. Review proceedings imply proceedings where a party, as of right, can apply for reconsideration of the matter, already decided upon, after a fresh hearing on the merits of the controversy between the parties, such remedy is certainly not provided by section 254(2) the Income Tax Act, 1961. 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 254(2) of the Act. The grievance in both the Miscellaneous Application are identical and similar, therefore we dismiss both Miscellaneous Applications. 7. In the result, both the MAs filed by the assessee are dismissed. Registry is directed to place one copy of this order in all appeals folder / case file(s). Order is pronounced in the open court on 18/08/2022 by placing the result on the Notice Board as per Rule 34(5) of the Income Tax (Appellate Tribunal) Rule 1963. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER lwjr /Surat Ǒदनांक/ Date: 18/08/2022 SAMANTA Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // True Copy // Assistant Registrar/Sr. PS/PS ITAT, Surat