Shri Hari Om Soni,S/o Shri JAgdish PRasad Verma, Mathura V. ITO, Mathura

MA 18/AGR/2009

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0325 (ITAT-AGRA)
• Duration Of Justice: 10 year(s) 23 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 27-04-2012
• Assessment Year: misc
• Appeal Filed On: 23-04-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SOHAIL AKHTAR
• Assessee Lawyers: M M AGARWAL
• Keywords: Rectification of order; Search and seizure; Opportunity of being heard; Additional evidence; Reasonable cause; Block assessment; Set aside
• Section: 274; 251; 254(2); 132; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER M.A. NO.18/AGR/2009 (IN IT(SS)A NO.1/AGR/2007) BLOCK ASST. YEARS: 1989-90 TO 1999-2000 (PERIOD UP TO 28.01.1999) SHRI HARI OM SONI, VS. INCOME TAX OFFICER 3(2), S/O. SHRI JAGDISH PRASAD VERMA, MATHURA 750, DWARKADEESH KI KUNJ, GAU GHAT, LAL DARWAJA, MATHURA. (PAN: ANQPS 3614 M). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.M AGARWAL, C.A. RESPONDENT BY : SHRI SOHAIL AKHTAR, JR. D.R. DATE OF HEARING : 27.04.2012 DATE OF PRONOUNCEMENT : 31.05.2012 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THIS MISCELLANEOUS APPLICATION (M.A.) HAS BEEN FILE D BY THE ASSESSEE AGAINST THE ORDER OF THIS TRIBUNAL DATED 23.01.2009 PASSED IN IT(SS)A NO.1/AGR/2007 FOR THE BLOCK ASST. YEARS 1989-90 TO 1999-2000 (PERIOD UPTO 28.01.1999). M.A. NO.18/AGR/2009 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE APPEAL IT(SS)A NO.1/AGR/2007 WAS FILED BY THE ASSESSEE ON 28.02.2007 AND WAS HEARD O N 6 TH OCTOBER, 2008. THE I.T.A.T. AGRA BENCH PASSED THE ORDER ON 23.01.2009 BY THE THEN MEMBERS, LD SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI SANJAY A RORA, ACCOUNTANT MEMBER THE ASSESSEE FILED MISCELLANEOUS APPLICATION AGAINS T THE SAID ORDER ON 20.04.2009. THE LD. JUDICIAL MEMBER SHRI HARI OM MARATHA AND TH E LD. ACCOUNTANT MEMBER SHRI SANJAY ARORA TRANSFERRED FROM AGRA BENCH IN TH E MONTH OF MAY 2009. THIS M.A. NO.18/AGR/2009 WAS EARLIER HEARD ON 25.06.2010 BY THE BENCH HEADED BY MEMBERS, LD SHRI R.K. GUPTA, JUDICIAL MEMBER AND L D. SHRI P.K. BANSAL, ACCOUNTANT MEMBER. THE ORDER COULD NOT BE FINALISE D WITHIN 60 DAYS. THEREFORE, THE CASE WAS DEHEARD AND RE-FIXED. 3. THE SO-CALLED MISTAKES POINTED OUT BY THE ASSESS EE IN THE MISCELLANEOUS APPLICATION ARE REPRODUCED AS UNDER:- MISTAKE NO.1 5.1 THE ORDER PASSED BY THE HONBLE ITAT ON THIS IS SUE RELATED TO VALIDITY OF BLOCK ASSESSMENT ORDER DATED 30.01.2001 UNDER SECTION 158BC, IS AT VARIANCE FROM THE PRONOUNCEMENT MADE I N THE OPEN COURT TO THE EFFECT AS MENTIONED IN PARA 4 HEREINFORE. 5.2 FURTHER, EVEN AFTER HAVING TAKEN NOTE OF THE CA TEGORICAL FINDINGS OF THE LD. CIT(A) TO THE EFFECT THAT THERE EXISTED NO WARRANT OF AUTHORIZATION FOR REQUISITION UNDER SECTION 132A IN THE NAME OF THE ASSESSEE/APPELLANT (KIND ATTENTION IS INVITED T O PARA 5.3 OF THE ORDER UNDER REFERENCE), THE HONBLE ITAT COULD NOT HAVE UPHELD THE M.A. NO.18/AGR/2009 3 VALIDITY OF THE SAID BLOCK ASSESSMENT ORDER EVEN TO THE LIMITED EXTENT, BY REFERRING TO AND RELYING UPON THE CASE ; (I) CHATTURAM VS. CIT REPORTED IN (1947) 15 ITR 3 02, STATED TO HAVE BEEN NOTED WITH THE APPROVAL OF APEX COURT ; (II) CIT VS. JAI PRAKASH SINGH REPORTED IN (1996) 219 ITR 737. (III) KENDARNATH JUTE MANUFACTURING CO. LTD. VS. CIT REPORTED IN (1971) 82 ITR 363. (IV) CIT VS. SHELLY PRODUCTS AND ANOTHER REPORTED IN (2003) 261 ITR 367. AS THE SAID CASE LAWS HAD BEEN RENDERED IN AN ALTOG ETHER DIFFERENT CONTEXT AND CONSTITUTED PRECEDENCE ON THEIR OWN FAC TS. 5.3 THUS, RELIANCE ON THE SAID CASE LAWS EVEN VIOLA TES THE RULE OF FOLLOWING THE PRECEDENCE AS HAS BEEN LAID DOWN, B Y THE HONBLE APEX COURT IN THE CASE OF CIT VS. SUN ENGINEERING W ORKS REPORTED IN (1992) 198 ITR 297, WHEREIN AT PAGE 320 THEIR LORDS HIPS HAVE OBSERVED AND HELD AS UNDER :- IT IS NEITHER DESIRABLE NOR PERMISSIBLE TO PICK OU T A WORD OR A SENTENCE FROM THE JUDGEMENT OF THIS COURT , DIVORCED FROM THE CONTEXT OF THE QUESTION UNDER CONSIDERATIO N AND TREAT IT TO BE THE COMPLETE LAW DECLARED BY THIS COURT. T HE JUDGEMENT MUST BE READ AS A WHOLE AND THE OBSERVATI ONS FROM THE JUDGEMENT HAVE TO BE CONSIDERED IN THE LIGHT OF THE QUESTIONS WHICH WERE BEFORE THIS COURT. A DECISION OF THIS COURT TAKES ITS COLOUR FROM THE QUESTIONS INVOLVED IN THE CASE IN WHICH IT IS RENDERED AND WHILE APPLYING THE DECISION TO A LATER CASE, THE COURTS MUST CAREFULLY TRY TO ASCERTAIN THE TRUE PRINCIPLE LAID DOWN BY THE DECISION OF THIS COURT AND NOT TO PICK OUT WORDS OR SENTENCES FROM THE JUDGEMENT, DIVORCED FROM THE CON TEXT OF THE QUESTIONS UNDER CONSIDERATION BY THIS COURT, TO SUP PORT THEIR REASONINGS. IN MADHAV RAO JIVAJI RAO SCINDIA BAHADU R VS. UNION OF INDIA (1971) 3 SCR 9; AIR 1971 SC 530, THI S COURT CAUTIONED (AT PAGE 578 OF AIR 1971 SC): IT IS NOT PROPER TO REGARD A WORD, A CLAUSE OR A SENTENCE OCCURRING IN A JUDGEMENT OF THIS M.A. NO.18/AGR/2009 4 SUPREME COURT, DIVORCED FROM ITS CONTEXT, AS CONTAINING A FULL EXPOSITION OF THE LAW ON A QUESTION WHEN THE QUESTION DID NOT EVEN FALL TO BE ANSWERED IN THAT JUDGEMENT. 6.1 AS PER THE DISCUSSIONS APPEARING IN PARA 7.1 ON WARD, THE HONBLE ITAT HAS ALSO UPHELD THE VIEW EXPRESSED BY THE LEARNED CIT (APPEALS), IN THE APPEAL THAT HAS BEEN RESTORED BY THE HONBLE ITAT VIDE ITS EARLIER ORDER DATED 20.01.2005 ON THE ISSU E OF APPLICABILITY OF SECTION 158BD. IT IS SUBMITTED WITH GREAT RESPECT THAT THE SAID ISSUE, WHICH HAS BEEN SPECIFICALLY TAKEN BEFORE THE HONBL E ITAT VIDE GROUND NO.2 [AS HAS BEEN REPRODUCED AT SL. NO.(XV) OF PARA 3.1 ABOVE ] HAS BEEN DECIDED BY THE HONBLE ITAT WITHOUT GIVI NG THE ASSESSEE AN OPPORTUNITY OF BEING HEARD, WITH REFERENCE TO TH E SAME AS HAS BEEN DISCUSSED IN PARA 4 ABOVE. AS STATED ABOVE, THE HO NBLE ITAT HAD DECLARED APPEAL AS HEARD JUST AFTER IT GOT APPRISED OF THE FACT THAT THERE EXISTED NO WARRANT OF AUTHORIZATION IN THE NA ME OF THE ASSESSEE. IT IS A TRITE LAW THAT NO ADVERSE ORDER CAN BE PASS ED WITHOUT THE AFFECTED PERSON BEING GIVEN AN OPPORTUNITY OF BEING HEARD. 6.2 NOTWITHSTANDING THE AFORESAID, THE VIEW EXPRESS ED BY THE HONBLE ITAT (ON THE ISSUE OF APPLICABILITY OF SECT ION 158BD) COMES IN DIRECT CONFLICT WITH THE DECISION OF HONBLE SUP REME COURT IN THE CASE OF MANISH MAHESHWARI VS. ASSTT. COMMISSIONER O F INCOME-TAX REPORTED IN (2007) 289 ITR 341, WHEREIN AT PAGE 348 THEIR LORDSHIPS HAVE OBSERVED AND HELD AS UNDER :- THE CONDITION PRECEDENT FOR INVOKING A BLOCK ASSESSMENT IS THAT A SEARCH HAS BEEN CONDUCTED UNDE R SECTION 132, OR DOCUMENTS OR ASSETS HAVE BEEN REQUISITIONED UNDER SECTION 132A. THE SAID PROVISI ON WOULD APPLY IN THE CASE OF ANY PERSON IN RESPECT OF WHOM SEARCH HAS BEEN CARRIED OUT UNDER SECTION 132A OR DOCUMENTS OR ASSETS HAVE BEEN REQUISITIONED UNDER SECTION 132A. SECTION 158BD, HOWEVER PROVIDES FOR TAKING RESOURCE TO A BLOCK ASSESSMENT IN TERMS OF S ECTION 158BC IN RESPECT OF ANY OTHER PERSON, THE CONDITION S PRECEDENT WHEREFORE ARE: (I) SATISFACTION MUST BE RECORDED BY THE ASSESSING OFFICER THAT ANY UNDISCLO SED M.A. NO.18/AGR/2009 5 INCOME BELONGS TO ANY PERSON, OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132 O F THE ACT; (II) THE BOOKS OF ACCOUNT OR OTHER DOCUMEN TS OR ASSETS SEIZED OR REQUISITIONED HAD BEEN HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON; AND (III) THE ASSESSING OFFICER HAS PROCEED ED UNDER SECTION 158BC AGAINST SUCH OTHER PERSON. THE CONDITIONS PRECEDENT FOR INVOKING THE PROVISIONS OF SECTION 158BD THUS, ARE REQUIRED TO B E SATISFIED BEFORE THE PROVISIONS OF THE SAID CHAPTER ARE APPLIED IN RELATION TO ANY PERSON OTHER THAN THE PE RSON WHOSE PREMISES HAD BEEN SEARCHED OR WHOSE DOCUMENTS AND OTHER ASSETS HAD BEEN REQUISITIONED UNDER SECTI ON 132A OF THE ACT. (348) XXX XXX XXX XXX A LARGE NUMBER OF DECISIONS OF VARIOUS HIGH COURTS HAVE BEEN CITED AT THE BAR. WE WOULD, AT THE OUT SET, R EFER TO A DECISION OF THE GUJRAT HIGH COURT IN KHANDUBHAI VAS ANJI VS. DEPUTY CIT [1999] 236 ITR 73. THEREIN, IT WAS CLEARLY HELD (PAGE 85). THIS PROVISION INDICATES THAT WHERE THE ASSESSING OFFICER WHO IS SEIZED OF THE MATTER AND HAS JURISDI CTION OVER THE PERSON OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132 OR WHOSE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ANY ASSETS W ERE REQUISITIONED UNDER SECTION 132A, HE SHALL PROCEED AGAINST SUCH OTHER PERSON AS PER THE PROVISIONS OF CHAPTER XIV-B WHICH WOULD MEAN THAT ON SUCH SATISFACTION BEING REACHED THAT ANY UNDISCLOSED INC OME BELONGS TO SUCH OTHER PERSON, HE MUST PROCEED TO SE RVE A NOTICE TO SUCH OTHER PERSON AS PER THE PROVISIONS O F SECTION 158BC OF THE ACT. IF THE ASSESSING OFFICER WHO IS SEIZED OF THE MATTER AGAINST THE RAIDED PERSON REAC HES SUCH SATISFACTION THAT ANY UNDISCLOSED INCOME BELON GS TO SUCH OTHER PERSON OVER WHOM HE HAS NO JURISDICTION, THEN, IN THAT EVENT, HE HAS TO TRANSMIT THE MATERIA L TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTH ER M.A. NO.18/AGR/2009 6 PERSON AND IN SUCH CASES THE ASSESSING OFFICER WHO HAS JURISDICTION WILL PROCEED AGAINST SUCH OTHER PERSON BY ISSUING THE REQUISITE NOTICE CONTEMPLATED BY SECTIO N 158BC OF THE ACT. A SIMILAR VIEW HAS BEEN TAKEN BY THE GUJARAT HIGH C OURT IN RUSHIL INDUSTRIES LTD. V. HARSH PRAKASH [2001] 251 ITR 608, PRIYA BLUE INDUSTRIES P. LTD. V. JOINT CIT [2001] 2 51 ITR 615 (GUJ), PREMIJIBHAI AND SONS V. JOINT CIT(A) [2001] 251 ITR 625(GUJ), AND BY THE KERALA HIGH COURT IN CIT V. DE EP ARTS [2005] 274 ITR 571, CIT V. DON BOSCO CARD CENTER [2 007] 289 ITR 329 (KER) AND BY THE MADHYA PRADESH HIGH CO URT IN CIT V. SMT. MAYA CHOTRANI [2007] 288 ITR 175. (349 & 350) A PLAIN READING OF THE SAID PASSAGE GOES TO SHOW TH AT REQUISITE SATISFACTION HAS TO BE RECORDED BY THE ASSESSING OF FICER HAVING JURISDICTION IN THE CASE OF THE PERSONS SUBJECTED TO SEARCH/REQUISITION. IN THE PRESENT CASE, ADMITTEDL Y NO SATISFACTION HAS BEEN RECORDED BY THE ASSESSING OFFICER HAVING J URISDICTION IN THE CASE OF NEEL KAMAL COURIER SERVICES (WHO IS THE PER SON SUBJECTED TO REQUISITION UNDER SECTION 132A) 6.3 IT IS VERY RELEVANT TO MENTION HERE THAT AS PER THE FINDING GIVEN BY THE HONBLE ITAT, THE PROCEEDINGS HAVE BEEN INIT IATED AT THE BEHEST OF THE ADDITIONAL DIRECTOR OF INCOME-TAX (INVESTIGA TION), CALCUTTA WHO FALLS WITHIN THE DEFINITION OF THE ASSESSING OFFICE R AS GIVEN IN SECTION 2(7A). BE IS SO, THE FACT REMAINS THAT SUCH AN AU THORITY WAS NOT HOLDING JURISDICTION AS ASSESSING OFFICER IN THE C ASE OF NEEL KAMAL COURIER SERVICES (SUPRA). THEREFORE, INITIATION OF PROCEEDINGS AT THE BEHEST OF THE ADDL. DIRECTOR OF INCOME-TAX (INVESTI GATION), CALCUTTA, CAN NOT BE TREATED TO BE THE PROCEEDINGS INITIATED ON A REFERENCE BEING MADE BY THE ASSESSING OFFICER HAVING JURISDIC TION IN THE CASE OF NEEL KAMAL COURIER SERVECES. IT IS EMPHASIZED THAT AS PER THE DECISION OF THE APEX COURT IN THE CASE OF MANISH MA HESHWARI (SUPRA) REFERENCE WAS TO BE MADE ONLY BY THE INCOME-TAX AUT HORITY HOLDING JURISDICTION OF THE ASSESSING OFFICER IN THE CASE O F NEEL KAMAL COURIER SERVICES AND NONE ELSE. 6.4 IN ANY CASE, THE SAID ISSUE RELATED TO APPLICAB ILITY OF SECTION 158BD, COULD NOT BE SAID TO BE WITHIN THE PURVIEW O F HONBLE ITAT, M.A. NO.18/AGR/2009 7 AS THE FIRST APPELLATE AUTHORITY DID NOT HAVE ANY M ANMADE (IN THE RESTORED APPEAL) TO LOOK INTO THE MATTER OF APPLICA BILITY OF SECTION 158BD. THE DUTY OF THE FIRST APPELLATE AUTHORITY W AS CONFINED ONLY TO FIND OUT AS A MATTER OF FACT, AS TO WHETHER THERE E XISTED A WARRANT OF AUTHORIZATION IN THE NAME OF THE APPELLANT OR NOT A ND TO DECIDE THE APPEAL WITH REFERENCE TO HIS FINDINGS ON THIS ISSUE . THE POINT AT ISSUE IS SQUARELY COVERED BY THE PRINCIPLE LAID DOWN BY T HE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF S.P. KOCHH AR VS. ITO REPORTED IN (1984) 145 ITR 255. 6.5 THUS, THE SECOND ISSUE HAS BEEN DECIDED BY THE HONBLE ITAT, NOT ONLY IN CONTRAVENTION OF THE PRINCIPLE LAID DOW N BY THE APEX COURT IN THE MATTER OF APPLICABILITY OF SECTION 158BD, WH ICH WAS BINDING ON ALL THE SUBJECTS UNDER ARTICLE 141 OF THE CONSTIT UTION OF INDIA, BUT ALSO IN VIOLATION OF THE PRINCIPLE LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF S.P. KOCHH AR (SUPRA). THEREFORE, THE ORDER UNDER REFERENCE DESERVES TO BE MODIFIED SO AS TO BRING THE SAME IN CONFORMITY WITH THE SAID BINDING PRECEDENCE. A COPY OF THE ORDER DATED 23.01.2009 PASSED BY THE HONBLE ITAT IN IT(SS) APPEAL NO.1/AGRA/2007 IS ENCLOSED AN D THE SAME HAS BEEN MARKED AS ANNEXURE-I, HERETO. PRAYER 7. IN VIEW OF THE SUBMISSION MADE ABOVE, IT IS RESP ECTFULLY PRAYED THAT THE HONBLE BENCH BE PLEASED (A) TO DEAL AND DECIDE THE ISSUES THAT HAVE BEEN RA ISED IN THIS MISC. APPLICATION; (B) TO PASS AN ORDER RECALLING THE ORDER DATED 23.0 1.2009 PASSED IN IT (SS) APPEAL NO.1/AGRA/07 AND/OR APPROPRIATELY MO DIFY THE SAME; AND (C) TO GRANT SUCH OTHER RELIEF AS IS FOUND ADMISSIB LE UNDER LAW AND EQUITY. 4. THE LD. AUTHORISED REPRESENTATIVE ARGUED THE M.A . ON THE BASIS OF CONTENTS AND SUBMISSIONS MADE IN THE M.A. WHICH ARE REPRODUC ED ABOVE. LD. AUTHORISED M.A. NO.18/AGR/2009 8 REPRESENTATIVE SUBMITTED THAT AT THE TIME OF HEARIN G THE BENCH ENQUIRED WHETHER IT WAS CORRECT THAT THERE WAS NO WARRANT OF AUTHORIZAT ION IN THE NAME OF THE ASSESSEE. ON BEING APPRISED OF THE CATEGORICAL FINDING RECORD ED BY THE FIRST APPELLATE AUTHORITY TO THE EFFECT THAT THERE WAS NO WARRANT O F AUTHORIZATION IN THE NAME OF THE ASSESSEE, THE BENCH WAS PLEASED TO ANNOUNCE IN THE OPEN COURT THAT THE ISSUE STOOD SETTLED IN FAVOUR OF THE ASSESSEE AND THE APPEAL SH ALL BE DECIDED ACCORDINGLY. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT IN THE LIGHT OF FACTS, NO FURTHER ARGUMENT TOOK PLACE THEREAFTER FROM EITHER SIDE NOR ANY FURTHER ARGUMENT ON THE REST OF THE ISSUES WERE CONSIDERED NECESSARY BY THE BENCH. 5. LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT T HERE MAY BE ERROR IN THE ORDER BUT THERE IS NO APPARENT MISTAKE WHICH CAN BE RECTIFIED UNDER SECTION 254(2) OF THE ACT. 6. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES, RECORDS PERUSED AND GONE THROUGH THE M.A. INCLUDING THE DECISIONS CITED . THE ISSUE TO BE EXAMINED IN THE CASE UNDER CONSIDERATION WHETHER UNDER THE FACT S AND CIRCUMSTANCES OF THE CASE SO-CALLED MISTAKES POINTED OUT IN THE M.A. ARE SUCH MISTAKES WHICH CAN BE RECTIFIED UNDER SECTION 254(2) OF THE ACT OR NOT ? TO EXAMIN E THE ISSUE FIRST WE SEE THE RELEVANT PROVISIONS WHICH IS SECTION 254(2) READS A S UNDER:- M.A. NO.18/AGR/2009 9 254. (1) . (1A) [***] (2) THE APPELLATE TRIBUNAL MAY, AT ANY TIME WITHI N FOUR YEARS FROM THE DATE OF THE ORDER, WITH A VIEW TO RE CTIFYING ANY MISTAKE APPARENT FROM THE RECORD, AMEND ANY ORDER PASSED BY IT UNDER SUB- SECTION (1), AND SHALL MAKE SUCH AMENDMENT IF THE M ISTAKE IS BROUGHT TO ITS NOTICE BY THE ASSESSEE OR THE [ASSESSING] OF FICER : PROVIDED THAT AN AMENDMENT WHICH HAS THE EFFECT OF ENHANCIN G AN ASSESSMENT OR REDUCING A REFUND OR OTHERWISE INCREA SING THE LIABILITY OF THE ASSESSEE, SHALL NOT BE MADE UNDER THIS SUB-S ECTION UNLESS THE APPELLATE TRIBUNAL HAS GIVEN NOTICE TO THE ASSESSEE OF ITS INTENTION TO DO SO AND HAS ALLOWED THE ASSESSEE A REASONABLE OPP ORTUNITY OF BEING HEARD : [ PROVIDED FURTHER THAT ANY APPLICATION FILED BY THE ASSESSEE IN THIS SUB-SECTION ON OR AFTER THE 1ST DAY OF OCTOBER, 199 8, SHALL BE ACCOMPANIED BY A FEE OF FIFTY RUPEES.] 7. TO APPRECIATE THE ISSUE, WE WOULD ALSO LIKE TO G O THROUGH SOME JUDICIAL VIEWS EXPRESSED BY THE APEX COURT AND HIGH COURTS WHICH ARE AS UNDER:- 8. THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT V RAMESH ELECTRIC AND TRADING CO., 203 ITR 497 (BOMB) HELD AS UNDER: - (PAGE NOS. 500 & 501) UNDER SECTION 254(2) OF THE INCOME-TAX ACT, 1961, THE APPELLATE TRIBUNAL MAY, WITH A VIEW TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD, AMEND ANY ORDER PASSED B Y IT UNDER SUB- SECTION (1) WITHIN THE TIME PRESCRIBED THEREIN. IT IS AN ACCEPTED POSITION THAT THE APPELLATE TRIBUNAL DOES NOT HAVE ANY POWER TO REVIEW ITS OWN ORDERS UNDER THE PROVISIONS OF THE I NCOME-TAX ACT, 1961. THE ONLY POWER WHICH THE TRIBUNAL POSSESSES I S TO RECTIFY ANY MISTAKE IN ITS OWN ORDER WHICH IS APPARENT FROM THE RECORD. THIS IS MERELY A POWER OF AMENDING ITS ORDER. THE EXTENT O F THIS POWER OF M.A. NO.18/AGR/2009 10 RECTIFICATION WAS CONSIDERED BY THE SUPREME COURT A S FAR BACK AS IN 1971 IN THE CASE OF T. S. BALARAM, ITO V. VOLKART B ROTHERS [1971] 82 ITR 50. THE SUPREME COURT SAID (HEADNOTE) : 'A MISTAKE APPARENT ON THE RECORD MUST BE AN OBVIOU S AND PATENT MISTAKE AND NOT SOMETHING WHICH CAN BE E STABLISHED BY A LONG DRAWN PROCESS OF REASONING ON POINTS ON W HICH THERE MAY BE CONCEIVABLY TWO OPINIONS. A DECISION ON A DE BATABLE POINT OF LAW IS NOT A MISTAKE APPARENT FROM THE REC ORD.' THIS VIEW OF THE SUPREME COURT HAS HELD THE FIELD F OR A LONG TIME, AND HAS BEEN FOLLOWED BY OTHER HIGH COURTS. T HUS, FOR EXAMPLE, IN THE CASE OF V. P. MINOCHA, ITO V. ITAT [1977] 10 6 ITR 691, THE GUJARAT HIGH COURT RELYING UPON BALARAM'S CASE [197 1] 82 ITR 50 (SC), SAID THAT A DECISION GIVEN BY THE TRIBUNAL ON A DEBATABLE POINT OF LAW CANNOT BE SUBSEQUENTLY CONSIDERED AS SHOWING ANY MISTAKE APPARENT FROM THE RECORD WHICH THE TRIBUNAL COULD C ONSEQUENTLY RECTIFY. SIMILARLY, THE MADRAS HIGH COURT IN THE CA SE OF CIT V. R. CHELLADURAI [1979] 118 ITR 108, SAID THAT THE TRIBU NAL'S POWER UNDER SECTION 254(2) IS NOT TO REVIEW ITS EARLIER ORDER B UT ONLY TO AMEND IT WITH A VIEW TO RECTIFYING ANY ERROR APPARENT FROM T HE RECORD. 9. THE HONBLE HIGH COURT OF MADHYA PRADESH IN THE CASE OF COMMISSIONER OF INCOME-TAX VS. K.D. WIRES P. LTD. (M.P.) 323 ITR 25 7 (M.P.) HELD AS UNDER :- (PAGES 259-260) FROM A PERUSAL OF THE SECTION 254(2), IT IS LUCULEN T THAT RECTIFICATION UNDER THAT SECTION IMPLIES AMENDMENT IF THE MISTAKE IS BROUGHT TO THE NOTICE OF THE TRIBUNAL BY THE ASSESS EE OR THE ASSESSING OFFICER. LEARNED COUNSEL HAS ALSO BROUGHT TO OUR NO TICE THE JUDGMENT OF THIS COURT IN DR. HUKUMCHAND MAROTHI V. CIT [200 2] 254 ITR 602 TO THE EFFECT THAT SCOPE OF THE PROCEEDINGS UNDER A RTICLE 254(2) OF THE INCOME-TAX ACT IS LIMITED AND IS NARROWER THAN THE PROCEEDINGS FOR REVIEW. ATTENTION HAS ALSO BEEN INVITED TO THE DECI SION OF THE DELHI HIGH COURT IN CIT V. HONDA SIEL POWER PRODUCTS LTD. [2007] 293 ITR 132 THAT POWER OF RECTIFICATION UNDER SECTION 254(2 ) OF THE INCOME-TAX ACT DOES NOT IMPLY THE POWER TO RECALL OR REVIEW TH E ORDER. M.A. NO.18/AGR/2009 11 IT IS NOT DISPUTED BEFORE US THAT ON AN APPLICATION UNDER SECTION 254(2) OF THE INCOME-TAX ACT HAVING BEEN FILED, THE TRIBUNAL SET ASIDE ITS OWN ORDER IN ITS ENTIRETY FOR PASSING AN ORDER AFRESH. THIS WAS TANTAMOUNT TO REVIEWING THE ORDER AND NOT RECTIFYIN G IT. UNDER THESE CIRCUMSTANCES, THE ORDER OF THE TRIBUNAL PASSED UND ER THE PROVISIONS OF SECTION 254(2) OF THE INCOME-TAX ACT AND THE SUB SEQUENT FRESH ORDER PASSED ON APRIL 23, 2004, CANNOT BE SUSTAINED 10. THE HONBLE HIGH COURT OF DELHI IN THE CASE OF COMMISSIONER OF INCOME- TAX, DELHI IV VS. HONDA SIEL POWER PRODUCTS LTD., 2 93 ITR 132 (DELHI) HELD AS UNDER: - ( PAGE 136 TO 146) A PLAIN READING OF THE ABOVE PROVISION INDICATES T HAT IN ORDER TO EXERCISE THE POWER VESTED IN IT UNDER SECTION 25 4(2) OF THE ACT, THE TRIBUNAL HAS TO ENSURE THAT THE FOLLOWING FACTORS A RE PRESENT : (A) THE APPLICATION IS MADE WITHIN 4 YEARS FROM THE DATE OF THE ORDER SOUGHT TO BE RECTIFIED. (B) THERE IS A MISTAKE APPARENT FROM THE RECORD WHI CH IS BROUGHT TO ITS NOTICE BY EITHER THE ASSESSEE OR THE ASSESSING OFFICER. AS REGARDS THE PROCEDURE TO BE FOLLOWED, IF THE AME NDMENT SOUGHT HAS THE EFFECT OF ENHANCING THE ASSESSMENT O R REDUCING A REFUND OR INCREASING THE LIABILITY OF THE ASSESSEE, THE TRIBUNAL HAS TO GIVE PRIOR NOTICE TO THE ASSESSEE AND ALSO ALLOW TH E ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 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 PRE-REQUISITE FOR EXERCISE OF EITHER POWER MAY BE SIMILAR (A MISTAKE APPARENT FROM THE RECORD), BY IT S VERY NATURE THE POWER TO RECTIFY A MISTAKE CANNOT RESULT IN THE REC ALL AND REVIEW OF THE ORDER SOUGHT TO BE RECTIFIED. OTHERWISE, WHAT CANNO T BE DONE DIRECTLY BY SEEKING A REVIEW OF AN ORDER CAN BE ACHIEVED IND IRECTLY, BY SEEKING A RECTIFICATION OF THAT ORDER. THIS IS EVEN MORE SI GNIFICANT IN LIGHT OF M.A. NO.18/AGR/2009 12 THE FACT THAT UNDER THE ACT THERE IS NO EXPRESS POW ER GIVEN TO THE TRIBUNAL TO REVIEW ITS OWN ORDERS. A REFERENCE MAY BE MADE TO THE OBSERVATION OF THE HONBLE SUPREME COURT IN S. NAGA RAJ V. STATE OF KARNATAKA [1993] SUPPL. 4 SCC 595 THAT 'RECTIFICATI ON OF AN ORDER STEMS FROM THE FUNDAMENTAL PRINCIPLE THAT JUSTICE I S ABOVE ALL. IT IS EXERCISED TO REMOVE THE ERROR AND NOT FOR DISTURBIN G FINALITY'. THE FIRST SIGNIFICANT DECISION IN THIS REGARD IS K .L. BHATIAS CASE (SUPRA). THE FACTS OF THAT CASE WERE THAT THE ASSESSEE FILED AN APPLICATION BEFORE THE TRIBUNAL UNDER SECTION 254(2) OF THE ACT STATING TH AT CERTAIN MATERIAL FACTS WERE NOT CORRECTLY NOTED BY THE TRIBUNAL IN ITS ORDER DA TED 27-6-1985 IN WHICH IT CONCLUDED THAT THE PROPERTY CLAIMED BY THE ASSESSEE AS BELONGING TO HIS WIFE, IN FACT BELONGED TO HIM AND THAT THE WIFE WAS ONLY A B ENAMIDAR. THE TRIBUNAL ACCEPTED THIS APPLICATION AND CAME TO THE CONCLUSIO N THAT THERE WAS A MISTAKE IN THE EARLIER ORDER DATED 27-6-1985 AND AS SUCH THE O RDER WAS REQUIRED TO BE RECALLED. ONE OF THE QUESTIONS RAISED IN THE APPEAL BEFORE THIS COURT WAS WHETHER THE TRIBUNAL HAD ANY POWER TO RECALL ITS EARLIER OR DER. THIS COURT CATEGORICALLY HELD THAT THE TRIBUNAL HAD NO POWER TO RECALL ITS O RDER ON MERITS IN EXERCISE OF ITS POWERS UNDER SECTION 254 OF THE ACT. THIS COURT HEL D AS UNDER :- AS WE HAVE ALREADY OBSERVED, THE TRIBUNAL IS A CRE ATION OF THE STATUTE. IT IS AN ADMITTED CASE, AND IT IS NOW WELL -SETTLED, THAT THOUGH THE TRIBUNAL HAS NO INHERENT POWER OF REVIEWING ITS ORDER ON MERITS, THE TRIBUNAL HAS INCIDENTAL OR ANCILLARY POWERS WHI CH CAN BE EXERCISED BY IT. BUT SUCH POWER CANNOT BE INVOKED T O REHEAR A CASE ON MERITS. THE TRIBUNAL CAN, AFTER DISPOSING OF THE AP PEAL UNDER SECTION 254(1), (PAGE138) REHEAR THE MATTER ON MERITS ONLY WITHIN THE PURVIEW OF SECTION 254(2). THE SUPREME COURT HAS HELD IN PA TEL NARSHI THAKERSHI V. PRADYUMANSINGHJI ARJUNSINGHJI AIR 1970 SC 1273, THAT M.A. NO.18/AGR/2009 13 THE POWER TO REVIEW IS NOT AN INHERENT POWER. IT MU ST BE CONFERRED BY LAW EITHER SPECIALLY OR BY NECESSARY IMPLICATION. I T DOES NOT STAND TO REASON THAT, IF THE POWER OF REVIEW IS NOT PRESENT WITH THE TRIBUNAL, IT, NEVERTHELESS, CAN EXERCISE SUCH POWER INDIRECTLY WH EN IT CANNOT DO SO DIRECTLY. IF THE CONTENTION OF LEARNED COUNSEL FOR THE RESPONDENT IS CORRECT, THEN IT COULD MEAN THAT, EVEN ON MERITS, T HE TRIBUNAL CAN RECALL ITS EARLIER ORDER AND THEN HEAR THE CASE AFR ESH AND PASS A DIFFERENT ORDER. IF THIS IS SO, IT WOULD AMOUNT TO THE TRIBUNAL EXERCISING POWER OF REVIEW WHEN IT DOES NOT HAVE AN Y SUCH POWER. TO GIVE AN EXAMPLE, UNDER THE PROVISIONS OF THE CODE O F CIVIL PROCEDURE, ORDER 47 PROVIDES THE CIRCUMSTANCES IN WHICH A JUDG MENT MAY BE REVIEWED. IF THE CONTENTION OF LEARNED COUNSEL FOR THE RESPONDENT IS CORRECT, THEN, APPLYING THE SAME ANALOGY TO A CIVIL CASE, IT WOULD BE OPEN TO A COURT TO RECALL ITS JUDGMENT IN A CASE WH ERE THE PROVISIONS OF ORDER 47 ARE NOT APPLICABLE, AND THEN TO REHEAR THE CASE. WITH RESPECT, WE SEE NO WARRANT FOR THIS IN LEGAL JURISP RUDENCE. THE APPELLATE COURT CAN HEAR A CASE AND DECIDE IT ON ME RITS, ONCE FOR ALL, AND CANNOT KEEP ON REHEARING THE SAME APPEAL OVER A ND OVER AGAIN. FULL EFFECT HAS TO BE GIVEN TO THE PROVISIONS OF SE CTION 254(4) WHICH SPECIFICALLY PROVIDES THAT A DECISION OF THE TRIBUN AL PASSED IN APPEAL IS FINAL. THIS DECISION IS FINAL NOT ONLY FOR THE A SSESSEE BUT ALSO FINAL AS FAR AS THE TRIBUNAL ITSELF IS CONCERNED. (P. 367) IN THE COURSE OF THE JUDGMENT IN K.L. BHATIAS CAS E (SUPRA) IT WAS OBSERVED :- THE INCOME-TAX ACT IS A SELF-CONTAINED CODE. THE I NCOME-TAX APPELLATE TRIBUNAL IS A CREATION OF THE STATUTE AND ITS POWERS ARE CIRCUMSCRIBED BY THE PROVISIONS OF THE ACT. APPEALS ARE FILED BEFORE IT UNDER SECTION 253 OF THE ACT. SECTION 254(1) CONTEM PLATES DISPOSAL OF THE SAID APPEAL AFTER GIVING AN OPPORTUNITY TO BOTH THE PARTIES OF BEING HEARD. SUB-SECTION (2) OF SECTION 254 ENABLES THE T RIBUNAL TO RECTIFY ANY MISTAKE APPARENT FROM THE RECORD. SUB-SECTION ( 4) OF SECTION 254 SPECIFIES THAT SAVE AS PROVIDED IN SECTION 256, THE ORDER PASSED BY THE APPELLATE TRIBUNAL ON APPEAL ARE FINAL. A READING OF SECTION 254 SHOWS THAT THE ORDERS WHIC H ARE PASSED UNDER SECTION 254 ARE FINAL EXCEPT UNDER TWO CIRCUMSTANCES: (1) IF A RECTIFICATION IS CALLED FOR, THEN SUCH AN ORDER CAN BE PASSED M.A. NO.18/AGR/2009 14 UNDER SECTION 254(2), AND (2) A REFERENCE CAN BE MA DE ON QUESTIONS OF LAW ARISING OUT OF THIS ORDER UNDER THE PROVISIONS OF SECTION 256. AS FAR AS THE TRIBUNAL IS CONCERNED, SECTION 254(4) PR OVIDES THAT THE ORDERS PASSED BY IT ON APPEAL ARE FINAL. (P. 364-6 5) IMPORTANTLY THIS COURT IN K.L. BHATIAS CASE (SUPR A) DREW A DISTINCTION BETWEEN THE POWER UNDER SECTION 35 OF THE INDIAN IN COME-TAX ACT, 1922 (1922 ACT) (WHICH WAS THE CORRESPONDING PROVISION RELATI NG TO RECTIFICATION OF ORDERS) AND THE PRESENT SECTION 254 OF THE 1961 ACT. REFERR ING TO THE JUDGMENT OF THE HONBLE SUPREME COURT IN CIT V. MTT. AR. S. AR. ARU NACHALAM CHETTIAR [1953] 23 ITR 180 THIS COURT IN K.L. BHATIAS CASE ( SUPRA ) OBSERVED AS UNDER :- ... ARUNACHALAM CHETTIARS CASE [1953] 23 ITR 180 , WAS ONE WHERE THE SUPREME COURT DECIDED THAT, IF AN APPLICATION H AD NOT BEEN DECIDED UNDER THE PROVISIONS OF SECTION 33(4) OF TH E INCOME-TAX ACT, THEN A REFERENCE UNDER SECTION 66(1) OF THE INDIAN INCOME-TAX ACT, 1922, WAS NOT MAINTAINABLE. THE SUPREME COURT DID N OT, IN THAT CASE, HOLD WHETHER THE MISCELLANEOUS APPLICATION HAD BEEN FILED AND DECIDED UNDER THE PROVISIONS OF SECTION 35 OF THE I NDIAN INCOME-TAX ACT, 1922, OR NOT. THE REASON FOR THAT WAS THAT FRO M AN ORDER PASSED UNDER SECTION 35 OF THE 1922 ACT, NO REFERENCE APPL ICATION COULD BE FILED UNDER SECTION 66 OF THE 1922 ACT. THE POSITIO N IN LAW HAS NOW CHANGED WITH THE ENACTMENT OF THE 1961 ACT WHERE EV EN FROM AN ORDER OF RECTIFICATION, A REFERENCE APPLICATION UNDER SEC TION 256 CAN BE FILED.' (P. 366) THE NEXT IMPORTANT DECISION IS MS. DEEKSHA SURI V. ITAT [1998] 232 ITR 395 (DELHI). IN THE SAID CASE, THE ASSESSEES HAD MO VED AN APPLICATION UNDER RULE 29 OF THE INCOME-TAX (APPELLATE TRIBUNAL) RULES, 19 63 (RULES), SEEKING ADMISSION BY WAY OF ADDITIONAL EVIDENCE BEFORE THE TRIBUNAL. THE TRIBUNAL, AFTER HEARING THE M.A. NO.18/AGR/2009 15 APPEAL ON MERITS, DISMISSED IT BY ORDER DATED 3-1-1 997. ON 5-2-1997 THE ASSESSEES MOVED AN APPLICATION UNDER SECTION 254(2) STATING T HAT VERY SERIOUS ERRORS OR MISTAKES HAD CREPT INTO THE FINAL ORDER OF THE TRIB UNAL. THEY POINTED OUT THAT THE TRIBUNAL HAD OVERLOOKED ITS EARLIER ORDER DATED 23- 10-1996 DIRECTING THE APPLICATION UNDER RULE 29 TO BE DISPOSED OF FIRST. THE TRIBUNAL REJECTED THE RECTIFICATION APPLICATION OBSERVING: 'IT WAS INDEED THE DUTY OF THE COUNSEL TO ADDRESS THIS BENCH FIRST ON THE RULE 29 APPLICATION IF AT ALL THE SAME WAS DESIRED TO BE PRESSED OR ARGUED. ADMITTEDLY, NOT HAVING DONE SO IT CANNOT NOW BE ATTRIBUTED AS A MISTAKE APPARENT FROM RECORD TO THE TRIBUNAL. THE TRIBUNAL CONCLUDED: 14.7 IN THE CIRCUMSTANCES, THE APPELLANTS HAVING A RGUED ON MERITS, NOT HAVING HIGHLIGHTED/ARGUED PETITION UNDE R RULE 29 AND THE TRIBUNAL IN ITS ORDER HAVING DEALT WITH IN EXTENSOR THE LETTER DATED 21- 2-1995, THERE IS NO MISTAKE APPARENT FROM RECORD CA LLING FOR RECTIFICATION UNDER SECTION 254(2) OF THE ACT AND R ESTRICTING THE APPELLANT TO THE MATERIAL ON RECORD SANS ADDITIONAL EVIDENCE, WAS IN ORDER AND NOT A MISTAKE APPARENT FROM RECORD. WE, T HEREFORE, FIND NO MERIT IN THESE APPLICATIONS AND DISMISS THE SAME. (P. 406) BEFORE THIS COURT, THE QUESTION THAT AGAIN AROSE W AS WHETHER THE TRIBUNAL HAD ERRED IN REJECTING THE APPLICATIONS FOR RECTIFI CATION. THIS COURT FORMULATED THE QUESTION AND ANSWERED IT AS UNDER :- COULD ANY RELIEF HAVE BEEN ALLOWED TO THE PETITION ERS IN EXERCISE OF JURISDICTION CONFERRED BY SECTION 254(2 ) OF THE ACT AMENDING THE ORDER PASSED BY THE TRIBUNAL WITH A VI EW TO RECTIFY ANY MISTAKE APPARENT FROM THE RECORD? THE LANGUAGE OF T HE PROVISIONS IS CLEAR. THE FOUNDATION FOR EXERCISING THE JURISDICTI ON IS WITH A VIEW TO RECTIFY ANY MISTAKE APPARENT ON THE RECORD AND THE OBJECT IS ACHIEVED M.A. NO.18/AGR/2009 16 BY AMENDING ANY ORDER PASSED BY IT. THE POWER SO CONFERRED DOES NOT CONTEMPLATE A REHEARING WHICH WOULD HAVE THE EF FECT OF REWRITING AN ORDER AFFECTING THE MERITS OF THE CASE. EVEN THE RE WOULD BE NO DISTINCTION BETWEEN A POWER TO REVIEW AND A POWER T O RECTIFY A MISTAKE. WHAT IS NOT PERMITTED TO BE DONE BY THE ST ATUTE HAVING DELIBERATELY OMITTED TO CONFER REVIEW JURISDICTION ON THE TRIBUNAL, CANNOT BE INDIRECTLY ACHIEVED BY RECOURSE TO SECTIO N 254(2) OF THE ACT.(P. 415) FOLLOWING THE DECISION IN K.L BHATIAS CASE (SUPRA ) THIS COURT IN DEEKSHA SURIS CASE (SUPRA) DISMISSED THE APPEALS OF THE AS SESSEE HOLDING THAT THE TRIBUNAL WAS RIGHT IN DISMISSING THE RECTIFICATION APPLICATI ON. THE THIRD IMPORTANT DECISION IS J.N. SAHNIS CASE (SUPRA), AGAIN BY A DIVISION B ENCH OF THIS COURT. IN THAT CASE, THE TRIBUNAL ENTERTAINED THE APPLICATIONS FILED BY THE REVENUE SEEKING RECTIFICATION OF AN ORDER ON THE GROUND THAT THERE WERE CERTAIN M ISTAKES APPARENT FROM THE RECORD. THE TRIBUNAL THEN PROCEEDED TO RECALL THE E NTIRE ORDER AND FIXED THE APPEALS FOR RE-HEARING. THE ASSESSEE THEN MOVED THI S COURT BY WAY OF AN APPEAL AND PLACING RELIANCE UPON THE DECISIONS IN DEEKSHA SURIS CASE ( SUPRA ) AND K.L BHATIAS CASE SUPRA), URGED THAT THE TRIBUNAL HAD EXCEEDED ITS JURISDICTION UNDER SECTION 254(2) OF THE ACT AND COULD NOT HAVE POSSIB LY RECALLED THE ENTIRE ORDER. AFTER REFERRING TO THE CASE LAW, THIS COURT REITERA TED THAT THE POWER ENTRUSTED UNDER SECTION 254(2) COULD NOT BE USED TO RECALL THE ORDE R ITSELF. REFERENCE WAS MADE TO THE DECISION IN SMT. BALJEET JOLLYS CASE ( SUPRA ) , WHERE IT WAS CATEGORICALLY HELD THAT 'AMENDMENT OF AN ORDER DOES NOT MEAN OBLITERAT ION OF AN ORDER ORIGINALLY PASSED AND ITS SUBSTITUTION BY A NEW ORDER'. THIS C OURT EXPRESSLY DISSENTED FROM M.A. NO.18/AGR/2009 17 THE DECISION OF THE RAJASTHAN HIGH COURT IN CIT V. RAMESH CHAND MODI [2001] 249 ITR 323 1 WHERE IT HAD BEEN HELD THAT WHERE THE TRIBUNAL FAI LS TO DECIDE SOME OF THE QUESTIONS RAISED BEFORE IT INADVERTENTLY OR BY OVERSIGHT, IT COULD EXERCISE THE POWER UNDER SECTION 254(2) TO RECTIFY SUCH A MISTAK E. THIS COURT IN J.N. SAHNIS CASE (SUPRA) OBSERVED : WITH UTMOST RESPECT WE ARE UNABLE TO SUBSCRIBE TO THE AFOREMENTIONED VIEW. THE TRIBUNAL IN THE ABSENCE OF ANY EXPRESS POWER CANNOT BE SAID TO HAVE A POWER OF SUBSTANTIVE REVIEW. THE TRIBUNAL HAS MERELY THE POWER TO AMEND ITS ORDER. W HILE EXERCISING THE SAID POWER IT CANNOT RECALL ITS ORDER. THE EXPR ESSION AMENDMENT MUST BE ASSIGNED ITS TRUE MEANING. WHIL E AN ORDER OF AMENDMENT IS PASSED, THE ORDER REMAINS BUT WHEN AN ORDER IS RECALLED IT STANDS OBLITERATED. IT IS WELL-SETTLED THAT WHAT CANNOT BE DONE DIRECTLY, CANNOT BE DONE INDIRECTLY. THE REVIE W OF ITS OWN ORDER BY THE TRIBUNAL IS FORBIDDEN IN LAW, IT CANNOT BE P ERMITTED TO ACHIEVE THE SAME OBJECT BY EXERCISING ITS POWER UNDER SUB-S ECTION (2) OF SECTION 254. THE INCOME-TAX APPELLATE TRIBUNAL DOES NOT HAVE AN INHERENT POWER OF REVIEW. (P. 21) IN VICHTRA CONSTRUCTION (P.) LTD.S CASE (SUPRA), THE TRIBUNAL DECIDED TO RECALL THE EARLIER ORDER IN ITS ENTIRETY WHILE ACCE PTING THE APPLICATION FOR RECTIFICATION. THIS COURT HELD THAT SUCH AN ORDER B Y THE TRIBUNAL WAS BEYOND THE SCOPE OF THE SECTION 254(2). IT WAS HELD AS UNDER:- 'IN VIEW OF THE PROVISIONS AND JUDICIAL PRONOUNCEME NT INDICATED HEREINABOVE, WE ARE OF THE VIEW THAT THE POWER TO RECTIFY A MISTAKE UNDER SECTION 254(2) CANNOT BE USED FOR REC ALLING THE ENTIRE ORDER. NO POWER OF REVIEW HAS BEEN GIVEN TO THE TRI BUNAL UNDER THE INCOME-TAX ACT. THUS, WHAT IT CANNOT DO DIRECTLY, C ANNOT BE ALLOWED TO BE DONE INDIRECTLY. IF THE ASSESSEE WAS AGGRIEVED, IT WAS OPEN FOR HIM TO APPROACH THE APPROPRIATE FORUM BUT THE TRIBUNAL COULD NOT HAVE M.A. NO.18/AGR/2009 18 REVIEWED THE ENTIRE JUDGMENT DELIVERED BY IT EARLIE R IN THE GARB OF EXERCISING ITS POWER UNDER SECTION 254(2). ACCORDIN GLY, THE ANSWER IS REQUIRED TO BE GIVEN IN FAVOUR OF THE REVENUE AND A GAINST THE ASSESSEE. (P. 374) RECENTLY, IN CIT V. ITAT [2006] 155 TAXMAN 378 A D IVISION BENCH OF THIS COURT WAS CONSIDERING A CASE WHERE THE TRIBUNAL HAD RECALLED THE EARLIER ORDER ON THE GROUND THAT IT HAD FAILED TO NOTE OF A DECISION RENDERED BY A THREE MEMBER BENCH OF THE TRIBUNAL AT ALLAHABAD. THE REVENUE IN APPEAL BEFORE THIS COURT CONTENDED THAT THIS COULD HARDLY BE A GROUND FOR TH E RECALL OF THE ENTIRE ORDER IN TERMS OF SECTION 254(2) OF THE ACT. IN PARAS 6 AND 7 THIS COURT IN ITATS CASE ( SUPRA ) HELD AS UNDER :- 6. IT IS EVIDENT FROM THE ABOVE THAT THE POWER AVA ILABLE TO THE TRIBUNAL IS NOT IN THE NATURE OF A REVIEW AS IS UND ERSTOOD IN LEGAL PARLANCE. THE POWER IS LIMITED TO CORRECTION OF MIS TAKES APPARENT FROM THE RECORD. WHAT IS SIGNIFICANT IS THAT THE SE CTION ENVISAGES AMENDMENT OF THE ORIGINAL ORDER OF THE TRIBUNAL AND NOT A TOTAL SUBSTITUTION THEREOF. THAT POSITION IS FAIRLY WELL- SETTLED BY TWO DECISIONS OF THIS COURT IN MS. DEEKSHA SURI V. ITAT [1998] 232 ITR 395/ 100 TAXMAN 573 AND KARAN & CO. V. ITAT [2002] 253 ITR 131/[2001] 118 TAXMAN 473 . THIS COURT HAS IN BOTH THESE DECISIONS HELD THAT THE FOUNDATION FOR THE EXERCISE OF THE JU RISDICTION LIES IN THE RECTIFICATION OF A MISTAKE APPARENT FROM THE RECORD WHICH OBJECT IS ENSUED BY AMENDING THE ORDER PASSED BY THE TRIBUNAL . THE SAID POWER DOES NOT, HOWEVER, CONTEMPLATE A REHEARING OF THE A PPEAL FOR A FRESH DISPOSAL. DOING SO WOULD OBLITERATE THE DISTINCTION BETWEEN THE POWER TO RECTIFY MISTAKES AND THE POWER TO REVIEW THE ORD ER MADE BY THE TRIBUNAL. THE FOLLOWING PASSAGE FROM THE DECISION O F THIS COURT IN KARAN & CO.S CASE (SUPRA) ELUCIDATES THE DIFFERENC E BETWEEN REVIEW AND RECTIFICATION OF AN ORDER MADE BY THE TRIBUNAL : THE SCOPE AND AMBIT OF APPLICATION OF SECTION 254( 2) IS VERY LIMITED. THE SAME IS RESTRICTED TO RECTIFICATION OF MISTAKES APPARENT FROM THE M.A. NO.18/AGR/2009 19 RECORD. WE SHALL FIRST DEAL WITH THE QUESTION OF TH E POWER OF THE TRIBUNAL TO RECALL AN ORDER IN ITS ENTIRETY. RECALL ING THE ENTIRE ORDER OBVIOUSLY WOULD MEAN PASSING OF A FRESH ORDER. THAT DOES NOT APPEAR TO BE THE LEGISLATIVE INTENT. THE ORDER PASSED BY T HE TRIBUNAL UNDER SECTION 254(1) IS THE EFFECTIVE ORDER SO FAR AS THE APPEAL IS CONCERNED. ANY ORDER PASSED UNDER SECTION 254(2) EITHER ALLOWI NG THE AMENDMENT OR REFUSING TO AMEND GETS MERGED WITH THE ORIGINAL ORDER PASSED. THE ORDER AS AMENDED OR REMAINING UNAMENDED IS THE EFFE CTIVE ORDER FOR ALL PRACTICAL PURPOSES. THE SAME CONTINUES TO BE AN ORDER UNDER SECTION 254(1). THAT IS THE FINAL ORDER IN THE APPE AL. AN ORDER UNDER SECTION 254(2) DOES NOT HAVE EXISTENCE DE HORS THE ORDER UNDER SECTION 254(1). RECALLING OF THE ORDER IS NOT PERMISSIBLE U NDER SECTION 254(2). RECALLING OF AN ORDER AUTOMATICALLY NECESSITATES RE -HEARING AND READJUDICATION OF THE ENTIRE SUBJECT-MATTER OF APPE AL. THE DISPUTE NO LONGER REMAINS RESTRICTED TO ANY MISTAKE SOUGHT TO BE RECTIFIED. POWER TO RECALL AN ORDER IS PRESCRIBED IN TERMS OR RULE 2 4 OF THE INCOME-TAX (APPELLATE TRIBUNAL) RULES, 1963, AND THAT TOO ONLY IN CASES WHERE THE ASSESSEE SHOWS THAT IT HAD A REASONABLE CAUSE FOR B EING ABSENT AT A TIME WHEN THE APPEAL WAS TAKEN UP AND WAS DECIDED E X PARTE. THIS POSITION WAS HIGHLIGHTED BY ONE OF US (JUSTICE ARIJ IT PASAYAT, CHIEF JUSTICE) IN CIT V. ITAT [1992] 196 ITR 640 (ORI). J UDGED IN THE ABOVE BACKGROUND, THE ORDER PASSED BY THE TRIBUNAL IS INDEFENSIBLE (P.136) THAT BEING THE LEGAL POSITION, THE TRIBUNAL WAS NO T IN OUR OPINION JUSTIFIED IN RECALLING THE ORDER PASSED BY IT IN TOTO AND SETTIN G THE MATTER DOWN FOR A FRESH HEARING. JUST BECAUSE A PRONOUNCEMENT MADE ON THE S UBJECT EITHER BY THE TRIBUNAL OR BY ANY OTHER COURT WAS NOT NOTICED BY THE TRIBUN AL WHILE TAKING A PARTICULAR VIEW ON THE MERITS OF THE CONTROVERSY MAY CONSTITUT E AN ERROR THAT WOULD CALL FOR CORRECTION IN AN APPROPRIATE APPEAL AGAINST THE ORD ER. ANY SUCH ERROR MAY HOWEVER FALL SHORT OF CONSTITUTING A MISTAKE APPARE NT FROM THE RECORD WITHIN THE MEANING OF SECTION 254(2) OF THE ACT. MORE IMPORTAN TLY JUST BECAUSE A POINT IS M.A. NO.18/AGR/2009 20 DEBATABLE (WHICH IS ONE OF THE REASONS GIVEN BY THE TRIBUNAL IN THE INSTANT CASE) WOULD HARDLY PROVIDE A JUSTIFICATION FOR RECALLING THE ORDER AND FIXING THE APPEAL FOR A DE NOVO HEARING. WHILE DOING SO, THE TRIBUNAL HAS NO DOUBT MADE CERTAIN OBSERVATIONS IN REGARD TO THE LEVY OF INTEREST UNDE R SECTION 158BFA BEING STATUTORY IN NATURE WITH NO POWER VESTED IN ANY AUTHORITY OR TRIBUNAL TO CONDONE THE SAME, BUT THE VERY FACT THAT THE TRIBUNAL HAS MADE THOSE OBSERVATIONS WOULD NOT RENDER VALID THE ORDER OF RECALL PASSED BY IT. THE NET RES ULT OF THE ORDER MADE BY THE TRIBUNAL CONTINUES TO REMAIN THE SAME VIZ., THE APP EAL HAS TO BE HEARD AGAIN SIMPLY BECAUSE ONE OF THE ISSUES DECIDED BY THE TRI BUNAL IS DEBATABLE OR THE TRIBUNAL HAS NOT NOTICED AN EARLIER DECISION RENDER ED BY ANOTHER BENCH. BOTH THESE REASONS WERE INSUFFICIENT TO JUSTIFY THE ORDE R OF RECALL MADE BY THE TRIBUNAL.' (P. 381) TURNING TO THE FACTS OF THE PRESENT CASE, WE ARE O F THE CONSIDERED VIEW THAT IT MAKES NO DIFFERENCE WHETHER THE ENTIRE ORDER IS SOU GHT TO BE RECALLED OR THE ORDER PASSED BY THE TRIBUNAL ON INDIVIDUAL GROUNDS IS SOU GHT TO BE RECALLED IN ENTIRETY. IN OTHER WORDS, IF THE TRIBUNAL HAS GIVEN ITS DECIS ION ON SAY GROUNDS 3 AND 4 IN A PARTICULAR WAY IN ITS FIRST ORDER WHILE DEALING WIT H TEN SEPARATE GROUNDS AND PURSUANT TO A RECTIFICATION APPLICATION, IT RECALLS ITS DECISION ON GROUNDS 3 AND 4 AND GIVES A COMPLETELY DIFFERENT DECISION ON THE SA ID GROUNDS, THEN IT WOULD CERTAINLY AMOUNT TO RECALL AND REVIEW OF ITS ENTIRE ORDER IN RESPECT OF THOSE M.A. NO.18/AGR/2009 21 GROUNDS. WE ARE UNABLE TO PERSUADE OURSELVES TO ACC EPT THE SUBMISSION OF MR. SYALI THAT WHAT THE DECISION IN K.L BHATIAS CASE ( SUPRA ) AND OTHER DECISIONS THAT HAVE FOLLOWED IT, FORBIDS IS ONLY A RECALL OF THE T RIBUNALS ENTIRE DECISION ON ALL THE TEN GROUNDS AND NOT TO THE RECALL AND REVIEW OF ONL Y TWO OUT OF THE TEN GROUNDS. THERE IS NO BASIS FOR SUCH A DISTINCTION EITHER FRO M THE LANGUAGE OF SECTION 254(2) OF THE ACT OR OF THE DECISIONS OF THIS COURT IN THE NUMEROUS CASES NOTICED HEREINABOVE. THE DECISIONS CITED BY MR. SYALI IN K. VENKATACHAL AMS CASE ( SUPRA ), S.A.L. NARAYAN ROWS CASE ( SUPRA ) TURNED ON THEIR OWN FA CTS. K. VENKATACHALAM PERTAINED TO THE POWER UNDER SECTION 35 OF THE 1922 ACT. AS OBSERVED BY DIVISION BENCH OF THIS COURT IN K.L. BHATIAS CASE ( SUPRA ) SECTION 35 OF THE 1922 ACT DID NOT PROVIDE FOR A FURTHER REFERENCE TO THE HIGH COU RT AGAINST THE DECISION THEREUNDER WHEREAS UNDER THE PRESENT ACT A REFERENC E UNDER SECTION 256 IS PERMISSIBLE IN RESPECT OF A DECISION UNDER SECTION 254. IN S.A.L. NARAYAN ROWS CASE (SUPRA) A SUBSEQUENT LEGISLATIVE CHANGE RELATE D BACK TO THE ASSESSMENT PERIOD COVERED BY THE ASSESSMENT ORDER IN QUESTION NECESSI TATING ITS RECALL. THIS WAS NOT AN INSTANCE OF A MISTAKE ON RECORD. KARAMCHAND PREM CHAND (P.) LTD.S CASE (SUPRA) INVOLVED SECTION 256(1) OF THE COMPANIES (P ROFITS) SURTAX ACT AND NOT SECTION 254(2) OF THE INCOME-TAX ACT, 1961. NOT SUR PRISINGLY, THEREFORE, THE SAID DECISION IN KARAMCHAND PREMCHAND (P.) LTD.S CASE ( SUPRA) DOES NOT REFER TO ANY M.A. NO.18/AGR/2009 22 OF THE DECISIONS DISCUSSED HEREINABOVE AND IS, THER EFORE, DISTINGUISHABLE ON THAT GROUND ITSELF. MR. SYALI PLACED CONSIDERABLE RELIANCE ON THE DECI SION OF THE GUJARAT HIGH COURT IN SAURASHTRA KUTCH STOCK EXCHANGE LTD.S CAS E ( SUPRA ) WHERE IT WAS HELD : 'THE PROPOSITION THAT A CONTENTION RAISED BUT NOT D EALT WITH BY THE TRIBUNAL SHOULD BE HELD TO HAVE BEEN NEGATIVED IS C ORRECT ONLY UP TO A STAGE. ONCE A PARTY BRINGS TO THE NOTICE OF THE TRI BUNAL THAT AN IMPORTANT POINT OR CONTENTION RAISED BY THE PARTY H AS NOT BEEN DEALT WITH IT WOULD BE WITHIN THE JURISDICTION AND POWERS OF THE TRIBUNAL TO DECIDE WHETHER THE SAME CONSTITUTES A MISTAKE APPAR ENT FROM THE RECORD AND THEREAFTER, IF NECESSARY, REOPEN THE APP EAL. SUCH A POWER IS INHERENT IN THE TRIBUNAL, AS A PARTY HAS SUFFERE D PREJUDICE DUE TO A LAPSE ON THE PART OF THE TRIBUNAL AND NOT ON ACCOUN T OF ANY FAULT OF SUCH A PARTY. AN ACT OF THE TRIBUNAL SHOULD NOT PRE JUDICE A PARTY SO AS TO FORCE THE PARTY INTO UNWARRANTED LITIGATION.' (P . 155) IT WAS FURTHER OBSERVED IN THE ABOVE DECISION THAT 'AFTER THE MISTAKE IS CORRECTED, CONSEQUENTIAL ORDER MUST FOLLOW, AND THE TRIBUNAL HAS POWER TO PASS ALL NECESSARY CONSEQUENTIAL ORDERS'. MR. SYALI ACCORDIN GLY ADVOCATES FOR A SIMILAR WIDER INTERPRETATION OF THE SCOPE OF THE POWER UNDE R SECTION 254(2) OF THE ACT BY THIS COURT, IN THE PECULIAR FACTS OF THIS CASE. WE ARE UNABLE TO AGREE WITH THIS SUBMISSION OF MR. SYALI. ONE INSTANCE OF A MISTAKE APPARENT FROM THE RECORD IS INDICATED IN RU LE 24 OF THE INCOME-TAX APPELLATE TRIBUNAL RULES AND THAT MISTAKE IS PERMIS SIBLE TO BE CORRECTED BY M.A. NO.18/AGR/2009 23 RECALLING THE ORDER. HOWEVER, IN ORDER TO INVOKE TH E POWER UNDER SECTION 254(2) THE MISTAKE WOULD HAVE TO BE SHOWN TO BE A MISTAKE APPARENT FROM THE RECORD. THE TRIBUNAL, IN THE PRESENT CASE RECORDS IN PARA 5 OF THE IMPUGNED ORDER DATED 10-9- 2003 THAT ADMITTEDLY, A DECISION OF THE CO-ORDINATE BENCH WAS CITED AND PLACED ON RECORD BUT THE SAME HAS ESCAPED THE ATTENTION OF TH IS BENCH. WE HAVE ALREADY HELD THIS CAN HARDLY BE CONSTRUED AS A MISTAKE APPARENT FROM THE RECORD. AS POINTED OUT BY THIS COURT IN CIT V. ITAT [2006] 155 TAXMAN 378 THIS MIGHT BE A GOOD GROUND FOR AN APPEAL BUT NOT FOR A RECTIFICATION. A DISTIN CTION AS RIGHTLY BEEN DRAWN IN SEVERAL DECISIONS OF THIS COURT BETWEEN THE SCOPE O F THE POWER OF REVIEW AND RECALL AND THAT OF RECTIFICATION. IN THE CIRCUMSTANCES WE ARE, WITH RESPECT, UNABLE TO SUBSCRIBE TO THE BROAD-BRUSH APPROACH OF THE GUJARA T HIGH COURT. WE MAY ADD THAT UNDER SECTION 254(2) THE LIMITATIO N FOR FILING AN APPLICATION FOR RECTIFICATION IS AN UNUSUALLY LONG PERIOD OF FO UR YEARS. CONTRASTED WITH FAR LESSER PERIODS OF LIMITATION FOR FILING APPEALS, IT UNDERSCORES THE NEED FOR THE TRIBUNAL TO BE CIRCUMSPECT ABOUT THE INSTANCES WHER E IT WILL ENTERTAIN APPLICATIONS FOR RECTIFICATION. IT MUST BE REMEMBERED THAT THIS IS NOT A POWER OF REVIEW BUT IS RESTRICTED TO RECTIFYING MISTAKES 'APPARENT FROM TH E RECORD'. A LIBERAL APPROACH MIGHT CONSTITUTE AN INVITATION TO PARTIES TO ALLOW THE PERIOD FOR FILING AN APPEAL TO EXPIRE, ANTICIPATE A CHANGE OF CORAM OF THE BENCH T HAT HEARD THE APPEAL IN THE FIRST INSTANCE, AND THEN AT THEIR OWN SWEET WILL TAKE A CHANCE BY FILING A RECTIFICATION M.A. NO.18/AGR/2009 24 APPLICATION ON ANY FANCY IMAGINED 'MISTAKE APPARENT FROM THE RECORD' AT ANY TIME BEFORE THE EXPIRY OF FOUR YEARS. THE LIKELIHOOD OF INGENUOUS LOWERING RESULTING IN THE ABUSE OF THE PROVISION CANNOT BE RULED OUT. IN THE CIRCUMSTANCES, WE WOULD CAUTION AGAINST THE TRIBUNAL INTERPRETING THE NARRO W POWER OF RECTIFICATION WIDER THAN WHAT IT IS. IN CONCLUSION, WE ARE OF THE VIEW THAT THE IMPUGNE D ORDER OF THE TRIBUNAL DATED 10-9-2003 BY WHICH IT RECALLED AND REVERSED I TS EARLIER DECISION DATED 2-4- 2002 ON GROUNDS 2 AND 3, IS IMPERMISSIBLE AND UNSUS TAINABLE IN LAW. WE REITERATE THAT IN THE FACTS OF THE PRESENT CASE IT MAKES NO D IFFERENCE WHETHER THE ENTIRE ORDER IS SOUGHT TO BE RECALLED OR THE ORDER PASSED BY THE TRIBUNAL ON INDIVIDUAL GROUNDS IS SOUGHT TO BE RECALLED IN ITS ENTIRETY. NEITHER I S PERMISSIBLE UNDER THE GARB OF RECTIFICATION. 11. THE HONBLE APEX COURT OF IN THE CASE OF CIT V KARAMCHAND THAPAR & BROS (P) LTD 176 ITR 535(SC) IT WAS HELD AS UNDER:- (PAGE 540 -541) IT IS EQUALLY SETTLED THAT THE DECISION OF THE TRI BUNAL HAS NOT TO BE SCRUTINISED SENTENCE BY SENTENCE MERELY TO FIND OUT WHETHER ALL FACTS HAVE BEEN SET OUT IN DETAIL BY THE TRIBUNAL O R WHETHER SOME INCIDENTAL FACT WHICH APPEARS ON RECORD HAS NOT BEE N NOTICED BY THE TRIBUNAL IN ITS JUDGMENT. IF THE COURT, ON A FAIR R EADING OF THE JUDGMENT OF THE TRIBUNAL, FINDS THAT IT HAS TAKEN I NTO ACCOUNT ALL RELEVANT MATERIAL AND HAS NOT TAKEN INTO ACCOUNT AN Y IRRELEVANT M.A. NO.18/AGR/2009 25 MATERIAL IN BASING ITS CONCLUSIONS, THE DECISION OF THE TRIBUNAL IS NOT LIABLE TO BE INTERFERED WITH, UNLESS, OF COURSE, TH E CONCLUSIONS ARRIVED AT BY THE TRIBUNAL ARE PERVERSE.. KEEPING THES E PRINCIPLES IN MIND IN THE PRESENT CASE, WE FIND THAT THE TRIBU NAL HAS TAKEN NOTE OF ALL THE RELEVANT CIRCUMSTANCES WHICH APPEAR ON RECO RD AND WHICH WERE REFERRED TO BY THE DEPARTMENTAL REPRESENTATIVE S BEFORE THE TRIBUNAL. IT HAS NOT TAKEN INTO ACCOUNT ANY MATERIA L WHICH COULD BE SAID TO BE IRRELEVANT IN ARRIVING AT ITS CONCLUSION S. IN CONSIDERING WHETHER THE SHARES OF BHARAT STARCH & CHEMICALS LTD . AND GREAVES COTTON & CO. LTD. WERE HELD BY THE ASSESSEE AS STOC K-IN-TRADE OR AS CAPITAL, THE TRIBUNAL HAS TAKEN INTO ACCOUNT THE FA CT THAT THE ASSESSEE WAS EARLIER TREATED BY THE DEPARTMENT AS A DEALER I N SHARES, AS POINTED OUT BY MR. MANCHANDA, BUT THAT CIRCUMSTANCE CANNOT BE REGARDED AS IRRELEVANT IN VIEW OF THE DECISION TO W HICH WE HAVE ALREADY REFERRED. IT IS ALSO NOT POSSIBLE TO SAY TH AT THE DECISION OF THE TRIBUNAL IS PERVERSE. MR. MANCHANDA STRONGLY CONTEN DED BEFORE US THAT THE TRIBUNAL HAS NOWHERE STATED IN TERMS THAT IT HAS TAKEN INTO CONSIDERATION THE TOTALITY OF CIRCUMSTANCES OR THE CUMULATIVE EFFECT OF THE CIRCUMSTANCES POINTED OUT TO THE TRIBUNAL AND H ENCE THE MATTER SHOULD BE REMANDED TO THE TRIBUNAL. IN OUR VIEW, TH ERE IS NO SUBSTANCE IN THIS SUBMISSION. IT IS TRUE THAT THE T RIBUNAL HAS NOT STATED IN TERMS THAT IT HAS CONSIDERED THE CUMULATIVE EFFE CT OF THE CIRCUMSTANCES POINTED OUT TO THE TRIBUNAL, BUT, ON THE OTHER HAND, A PLAIN READING OF THE JUDGMENT OF THE TRIBUNAL MAKES IT CLEAR THAT THE TRIBUNAL HAS, IN FACT, TAKEN INTO ACCOUNT THE CUMUL ATIVE EFFECT OF THE CIRCUMSTANCES ON RECORD BEFORE THE TRIBUNAL. IT IS NOT NECESSARY FOR THE TRIBUNAL TO STATE IN ITS JUDGMENT SPECIFICALLY OR IN EXPRESS WORDS THAT IT HAS TAKEN INTO ACCOUNT THE CUMULATIVE EFFEC T OF THE CIRCUMSTANCES OR HAS CONSIDERED THE TOTALITY OF FAC TS, AS IF THAT WERE A MAGIC FORMULA; IF THE JUDGMENT OF THE TRIBUNAL SHOW S THAT IT HAS, IN FACT, DONE SO, THERE IS NO REASON TO INTERFERE WITH THE DECISION OF THE TRIBUNAL. IN OUR OPINION, THERE IS NO MERIT IN THIS APPEAL AND IT MUST FAIL. 12. THE HONBLE HIGH COURT OF MADRAS IN THE CASE OF EXPRESS NEWSPAPERS LIMITED VS. DCIT, 186 TAXMAN 111 (MAD) HELD THAT A MISTAKE MUST BE ONE WHICH MUST BE MANIFEST ON THE FACE OF THE RECORD. M.A. NO.18/AGR/2009 26 13. THE HONBLE HIGH COURT OF ORISSA IN THE CASE OF CIT VS. ITAT, 196 ITR 640 (ORISSA) HELD THAT THE SCOPE AND AMBIT OF APPLICATI ON OF SECTION 254(2) IS VERY LIMITED. THE SAME IS RESTRICTED TO RECTIFICATION O F MISTAKES APPARENT FROM THE RECORD. RECALLING THE ENTIRE ORDER WOULD MEAN PASS ING OF A FRESH ORDER. THAT DOES NOT APPEAR TO BE THE LEGISLATIVE INTENT. 14. THE HONBLE HIGH COURT OF ORISSA IN ANOTHER CAS E IN THE CASE OF CIT VS. ITAT, 210 ITR 397 (ORISSA) WHEREIN IT HAS BEEN HELD THAT THE TRIBUNAL IS ENTITLED TO DO IN EXERCISE OF POWER UNDER SECTION 254(2) IS TO RECTIFY AN APPARENT MISTAKE AVAILABLE FROM THE RECORD AND NOT TO REVIEW ITS OWN DECISION OR TO REWRITE A FRESH JUDGEMENT. SUBSTITUTION OF TWO PARAGRAPHS IN THE O RIGINAL ORDER OF THE TRIBUNAL BY A FRESH PARAGRAPH AMOUNTS TO REWRITING OF ITS JUDGM ENT AND IT IS NOT PERMISSIBLE. 15. THE HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT VS. ITAT, 155 TAXMAN 378 (DELHI) HELD THAT SECTION 254(2) ENVISAGES AMEN DMENT OF THE ORIGINAL ORDER OF THE TRIBUNAL AND NOT A TOTAL SUBSTITUTION THEREOF. THE SAID POWER DOES NOT, HOWEVER, CONTEMPLATE A RE-HEARING OF THE APPEAL FOR A FRESH DISPOSAL. THUS, WHERE THE TRIBUNAL HAD RECALLED ITS ORDER AND DIRECTED DE NOVO RE-HEARING OF THE APPEAL ON THE GROUND THAT IT HAD NOT NOTICED DECISION OF ANOT HER BENCH OF TRIBUNAL WHILE PASSING THE SAID ORDER AND ALSO BECAUSE ONE OF THE ISSUES DECIDED BY IT WAS M.A. NO.18/AGR/2009 27 DEBATABLE, BOTH THESE REASONS WERE INSUFFICIENT TO JUSTIFY THE ORDER OF RECALL HAVING REGARD TO THE LANGUAGE EMPLOYED IN SECTION 254(4) O F THE ACT. 16. THE HONBLE HIGH COURT OF CALCUTTA IN THE CASE OF CIT VS. BALLABH PRASAD AGARWALLA, 90 TAXMAN 283 (CAL), WHEREIN IT HAS BEEN HELD THAT THE TRIBUNAL HAS NO INHERENT POWER OF REVIEW. THE POWER OF VIEW MUST B E EXPRESSLY CONFERRED BY THE STATUTE. REVIEW OF AN ORDER MEANS RE-EXAMINATION O R 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. FROM THE VAR IOUS JUDGEMENT OF THE SUPREME CURT ABOVE REFERRED TO AND OTHER HIGH COURTS, IT IS CLEAR THAT THE TRIBUNALS POWER UNDER SECTION 254(2) IS NOT TO REVIEW ITS EARLIER O RDER BUT ONLY TO AMEND IT WITH A VIEW TO RECTIFY ANY MISTAKE APPARENT FROM THE RECOR D. WHAT CAN BE TERMED AS MISTAKE APPARENT ? MISTAKE IN GENERAL MEANS TO TAKE OR UNDERSTAND WRONGLY OR INACCURATELY; TO MAKE AN ERROR IN INTERPRETING; IT IS AN ERROR; A FAULT, A MISUNDERSTANDING, A MISCONCEPTION. MISTAKE IN TAXA TION LAWS HAS A SPECIAL SIGNIFICANCE. IT IS MOSTLY SUBJECTIVE AND THE DIVI DING LINE IS THIN AND INDISCERNIBLE. APPARENT MEANS VISIBLE, CAPABLE OF BEING SEEN, EA SILY SEEN, OBVIOUS PLAIN, OPEN TO VIEW, EVIDENT, APPEARS, APPEARING AS REAL AND TR UE, CONSPICUOUS, MANIFEST, SEEMING. THE PLAIN MEANING OF THE WORD APPARENT IS THAT IT MUST BE SOMETHING WHICH APPEARS TO BE EX-FACIE AND INCAPABLE OF ARGUM ENT AND DEBATE. IF SUCH A MISTAKE APPARENT ON THE FACE OF RECORD IS BROUGHT TO THE NOTICE, SECTION 254(2) M.A. NO.18/AGR/2009 28 EMPOWERS THE TRIBUNAL TO AMEND THE ORDER PASSED UND ER SECTION 254(1). AMENDMENT OF AN ORDER DOES NOT MEAN OBLITERATION OF THE ORDER ORIGINALLY PASSED AND ITS SUBSTITUTION BY A NEW ORDER. WHAT IS MISTA KE APPARENT ON THE FACE OF THE RECORD OR WHERE DOES A MISTAKE CEASE TO BE MERE MIS TAKE, AND BECOME MISTAKE APPARENT ON THE FACE OF THE RECORD IS RATHER DIFFIC ULT TO DEFINE PRECISELY, SCIENTIFICALLY AND WITH CERTAINTY. AN ELEMENT OF I NDEFINITENESS INHERENT IN ITS VERY NATURE AND IT MUST BE DISCERNIBLE FROM THE FACTS OF EACH CASE BY JUDICIOUSLY TRAINED MIND. 17. HONBLE CALCUTTA HIGH COURT IN THE CASE OF HIND USTAN LEVER LTD. VS. JCIT, 284 ITR 42 HELD SUB-SECTION (1) OF SECTION 154 OF THE INCOME-TAX A CT, 1961 CLEARLY STATES THE CIRCUMSTANCES UNDER WHICH THE RE CTIFICATION CAN BE MADE. A MISTAKE MUST BE APPARENT FROM THE RECORD, M EANING THEREBY NO EXTERNAL HELP EITHER ON FACT OR IN LAW IS REQUIR ED TO DETECT SUCH MISTAKE. THE MISTAKE MUST BE SO OBVIOUS THAT IT CAN EASILY BE CORRECTED, TO WIT AN ARITHMETICAL MISTAKE, A WRONG QUOTATION OF SECTION, ETC. THE QUESTION WHETHER INTERPRETATION O F A PROVISION OF LAW IS RIGHT OR WRONG IS PER SE A DEBATABLE ISSUE. THIS ISSUE CANNOT BE RESOLVED BY THE OFFICIAL HAVING CO-ORDINATE JURISDI CTION UNDER SECTION 154 OF THE ACT AS IT COULD NOT BE TERMED TO BE APPA RENT FROM THE RECORD. IT WAS FURTHER HELD HELD, THAT ORIGINALLY THE ASSESSING OFFICER HAD AP PLIED SECTION 32, SUB-SECTION (1), THIRD PROVISO. WHETHER THIS PROVIS ION HAD BEEN M.A. NO.18/AGR/2009 29 CORRECTLY APPLIED OR NOT WAS A DEBATABLE ISSUE. THE NOTICE WAS ULTRA VIRES THE PROVISION OF SECTION 154 AND THE ORDER PA SSED PURSUANT TO THE NOTICE WAS NOT SUSTAINABLE IN LAW 18. HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. ANAMIKA BUILDERS PVT. LTD., 251 ITR 585 HELD THAT THE TRIBUNAL SHOULD NOT CHANGE ITS VIEW ALREADY TAKEN IN THE MATTER. IT IS WELL SETTLED LAW THAT THE TRI BUNAL HAS NO POWER TO REVIEW ITS ORDER ALREADY PASSED ON MERITS. THE VIEW IS FORTIFI ED IN BY THE OF HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF CIT VS. IDEAL ENG INEERS, 251 ITR 743, THE DECISION OF HONBLE M.P. HIGH COURT IN THE CASE OF AGARWAL WAREHOUSING, 257 ITR 235 (MP) AND OF HONBLE MADRAS HIGH COURT IN TH E CASE OF CIT VS. ADYAR GATE HOTEL LTD., 294 ITR 155 IN WHICH HONBLE MADRA S HIGH COURT ALSO HELD THAT THE MISCELLANEOUS APPLICATION SHOULD NOT BE CONSIDE RED ON THE DEBATABLE ISSUE. 19. THE MAIN QUESTION, THEREFORE, IS: WHAT IS A `MI STAKE APPARENT FROM THE RECORD'? A SIMILAR EXPRESSION `ERROR APPARENT ON T HE FACE OF THE RECORD' CAME UP FOR CONSIDERATION BEFORE VARIOUS COURTS AS DISCUSSED AB OVE. IN T.S. BALARAM V. VOLKART BROTHERS, BOMBAY, (SUPRA), THE COURT HELD THAT 'ANY MISTAKE APPARENT FROM THE RECORD' IS UNDOUBTEDLY NOT MORE THAN THAT OF THE HI GH COURT TO ENTERTAIN A WRIT PETITION ON THE BASIS OF AN 'ERROR APPARENT ON THE FACE OF THE RECORD'. IT WAS, HOWEVER, CONCEDED IN ALL LEADING CASES THAT IT IS V ERY DIFFICULT TO DEFINE AN 'ERROR APPARENT ON THE FACE OF THE RECORD' PRECISELY, SCIE NTIFICALLY AND WITH CERTAINTY. IN M.A. NO.18/AGR/2009 30 THE CASE OF HARI VISHNU KAMATH V. SYED AHMAD ISHAQU E, (1955) 1 SCR 1104, THE CONSTITUTION BENCH OF THE APEX COURT QUOTED THE OBS ERVATIONS OF CHAGLA, C.J. IN BATUK K. VYAS V. SURAT MUNICIPALITY, ILR 1953 BOM 1 91 : AIR 1953 BOM 133 THAT NO ERROR CAN BE SAID TO BE APPARENT ON THE FAC E OF THE RECORD IF IT IS NOT MANIFEST OR SELF-EVIDENT AND REQUIRES AN EXAMINATION OR ARGU MENT TO ESTABLISH IT. THE COURT ADMITTED THAT THOUGH THE SAID TEST MIGHT APPLY IN M AJORITY OF CASES SATISFACTORILY, IT PROCEEDED TO COMMENT THAT THERE MIGHT BE CASES IN W HICH IT MIGHT NOT WORK INASMUCH AS AN ERROR OF LAW MIGHT BE CONSIDERED BY ONE JUDGE AS APPARENT, PATENT AND SELF- EVIDENT, BUT MIGHT NOT BE SO CONSIDERED B Y ANOTHER JUDGE. THE COURT, THEREFORE, CONCLUDED THAT AN ERROR APPARENT ON THE FACE OF THE RECORD CANNOT BE DEFINED EXHAUSTIVELY THERE BEING AN ELEMENT OF INDE FINITENESS INHERENT IN ITS VERY NATURE AND MUST BE LEFT TO BE DETERMINED JUDICIALLY ON THE FACTS OF EACH CASE. A PATENT MANIFEST AND SELF-EVIDENT ERROR WHICH DOES NOT REQUIRE ELABORATE DISCUSSION OF EVIDENCE OR ARGUMENT TO ESTABLISH IT, CAN BE SAID TO BE AN ERROR APPARENT ON THE FACE OF THE RECORD AND CAN BE CORRE CTED WHILE EXERCISING CERTIORARI JURISDICTION. AN ERROR CANNOT BE SAID TO BE APPAREN T ON THE FACE OF THE RECORD IF ONE HAS TO TRAVEL BEYOND THE RECORD TO SEE WHETHER THE JUDGMENT IS CORRECT OR NOT. AN ERROR APPARENT ON THE FACE OF THE RECORD MEANS AN E RROR WHICH STRIKES ON MERE LOOKING AND DOES NOT NEED LONG- DRAWN-OUT PROCESS O F REASONING ON POINTS WHERE THERE MAY CONCEIVABLY BE TWO OPINIONS. SUCH ERROR S HOULD NOT REQUIRE ANY M.A. NO.18/AGR/2009 31 EXTRANEOUS MATTER TO SHOW ITS INCORRECTNESS. TO PUT IT DIFFERENTLY, IT SHOULD BE SO MANIFEST AND CLEAR THAT NO COURT WOULD PERMIT IT TO REMAIN ON RECORD. IF THE VIEW ACCEPTED BY THE COURT IN THE ORIGINAL JUDGMENT IS O NE OF THE POSSIBLE VIEWS, THE CASE CANNOT BE SAID TO BE COVERED BY AN ERROR APPAR ENT ON THE FACE OF THE RECORD. RECTIFICATION OF AN ORDER STEMS FROM THE FUNDAMENTA L PRINCIPLE THAT JUSTICE IS ABOVE ALL. IT IS EXERCISED TO REMOVE THE ERROR AND NOT FO R DISTURBING FINALITY. IT IS AN ADMITTED CASE, AND IT IS NOW WELL-SETTLED, THAT THO UGH THE TRIBUNAL HAS NO INHERENT POWER OF REVIEWING ITS ORDER ON MERITS, THE TRIBUNA L HAS INCIDENTAL OR ANCILLARY POWERS WHICH CAN BE EXERCISED BY IT. BUT THE SAID P OWER DOES NOT, HOWEVER, CONTEMPLATE A REHEARING OF THE APPEAL FOR A FRESH D ISPOSAL. DOING SO WOULD OBLITERATE THE DISTINCTION BETWEEN THE POWER TO REC TIFY MISTAKES AND THE POWER TO REVIEW THE ORDER MADE BY THE TRIBUNAL. IT IS EQUALL Y SETTLED THAT THE DECISION OF THE TRIBUNAL HAS NOT TO BE SCRUTINISED SENTENCE BY SENT ENCE MERELY FOR REVIEW EARLIER ORDER OR TO REHEAR AND TO GET A SECOND ORDER IN THE GARB OF APPLICATION UNDER SECTION 254 (2) OF THE ACT. 20. IN THE LIGHT OF ABOVE BACKGROUND OF DISCUSSIONS , IF WE CONSIDER THE FACTS OF THE CASE UNDER CONSIDERATION, WE NOTICE THAT THE MA IN GRIEVANCE OF THE ASSESSEE POINTED OUT IN THE MISCELLANEOUS APPLICATION IS THA T THE BENCH HAS ANNOUNCED IN THE OPEN COURT THAT THE ISSUE SETTLED IN FAVOUR OF THE ASSESSEE AND THE APPEAL SHALL BE DECIDED ACCORDINGLY. TO EXAMINE THIS ISSUE IT I S NECESSARY TO SEE WHETHER SUCH M.A. NO.18/AGR/2009 32 ANNOUNCEMENT DURING THE COURSE OF HEARING IS AN ORD ER OF I.T.A.T. IN ACCORDANCE WITH SECTION 254(1) OF THE ACT. BEFORE THAT IT MAY BE MENTIONED THAT DURING THE COURSE OF HEARING SOMETIMES VARIOUS QUERIES ARE RAI SING BY THE BENCH TO EXPLORE THE CORRECT FACTS OF THE CASE. RAISING AND DISCUSSING S UCH QUERIES DURING THE COURSE OF HEARING DOES NOT AMOUNT TO ORDER OF I.T.A.T. IN ACC ORDANCE WITH SECTION 254(1) OF THE ACT. WHEN AN ORDER IS SAID TO BE AN ORDER OF I .T.A.T. UNDER SECTION 254(1), THE ISSUE CAME UP BEFORE THE HONBLE APEX COURT IN THE CASE OF INCOME TAX APPELLATE TRIBUNAL VS. V.K. AGARWAL, 235 ITR 17 (SC), THE REL EVANT FINDING OF THE APEX COURT IS REPRODUCED AS UNDER :- (PAGE 188) RULES 34 AND 35 OF THE INCOME-TAX (APPELLATE TRIBUNAL) RULES, 1963 WHICH REGULATE THE PROCEDURE OF THE APPELLATE TRIBUNAL. UNDER RULE 34 WHICH DEALS WITH FINAL ORDE RS TO BE PASSED, IT IS PROVIDED AS FOLLOWS :- ORDER TO BE SIGNED AND DATED.(1) THE ORDER OF THE BENCH SHALL BE IN WRITING AND SHALL BE SIGNED AND DATED B Y THE MEMBERS CONSTITUTING IT. RULE 35 PROVIDES AS FOLLOWS :- ORDER TO BE COMMUNICATED TO PARTIES.THE TRIBUNAL SHALL, AFTER THE ORDER IS SIGNED, CAUSE IT TO BE COMMUNICA TED TO THE ASSESSEE AND TO THE COMMISSIONER. THEREFORE, UNLESS THE ORDER OF A BENCH IS SIGNED BY ALL MEMBERS CONSTITUTING IT AND IS DATED, IT IS NOT AN ORDER OF THE TRIBUNAL. SECONDLY, THIS SIGNED AND DATED ORDER HAS TO BE COM MUNICATED BOTH TO THE ASSESSEE AND TO THE COMMISSIONER. THE FIRST RE SPONDENT HAS NOTED IN THE LETTER OF 30-12-1997, THAT THE FIRST SO-CALL ED ORDER ONLY BEARS M.A. NO.18/AGR/2009 33 THE SIGNATURE OF ONE MEMBER. IT IS NOT SIGNED BY TH E SECOND MEMBER, NOR DOES IT BEAR ANY DATE. . 21. IN THE LIGHT OF ABOVE LAW LAID DOWN BY THE APEX COURT, THE ORDER OF I.T.A.T. IN ACCORDANCE WITH SECTION 254(1) IS ONLY WHEN ORDE R BEARS THE SIGNATURE OF BOTH THE MEMBERS AND COMMUNICATED TO THE PARTIES. THE R ULE 34 OF INCOME TAX(APPELLATE TRIBUNAL) RULES 1963 ALSO PROVIDES T HAT THE ORDER OF BENCH SHALL BE IN WRITING AND SHALL BE SIGNED AND DATED BY THE MEM BERS CONSTITUTING THE BENCH. IN THE LIGHT OF ABOVE LAW LAID DOWN BY THE APEX COU RT AND IN ACCORDANCE WITH , RULES 34 & 35OF INCOME TAX(APPELLATE TRIBUNAL) RULE S 1963 THE SO-CALLED CLAIM BY THE ASSESSEE THAT ORDER HAS BEEN PRONOUNCED IN T HE OPEN COURT IS NOT THE ORDER OF I.T.A.T. UNDER SECTION 254(1) OF THE ACT. WHEN THERE IS NO ORDER OF I.T.A.T. IN ACCORDANCE WITH LAW UNDER SECTION 254(1), THERE IS NO QUESTION OF AMENDING THE ORDER UNDER SECTION 254(2) OF THE ACT. WE ARE AWAR E THAT ACCORDING TO RULE 34(4) THE ORDERS ARE TO BE PRONOUNCED IN THE COURT. ON P ERUSAL OF RECORDS, WE NOTICE THAT THERE IS NO SUCH PRONOUNCEMENT; RATHER THE CASE/APP EAL WAS KEPT FOR ORDER AS PER THE ORDER SHEET DATED 6.10.2008. IT IS ALSO RELE VANT TO STATE THAT FOR SUCH PRONOUNCEMENT IN THE OPEN COURT, THE RULES (4) & (5 ) OF RULE 34 OF HAS BEEN INSERTED BY THE INCOME TAX (APPELLATE TRIBUNAL) (AM ENDMENT) RULES 2009 W.E.F. 01.05.2009. IN THE LIGHT OF THE FACTS, THE CONTENT ION OF THE ASSESSEE IS REJECTED AS SUCH ARE NOT MISTAKES WHICH ARE RECTIFIABLE UNDER S ECTION 254(2) OF THE ACT. M.A. NO.18/AGR/2009 34 22. AS REGARDS THE OTHER CONTENTION AND VARIOUS JUD GEMENTS CITED IN THE MISCELLANEOUS APPLICATION PERTAINING TO MERIT OF TH E CASE, THE SAME AMOUNT TO RE- HEARING OF THE APPEAL AND TO PASS A FRESH ORDER. A S PER THE DETAILED DISCUSSIONS MADE ABOVE, THERE IS NO APPARENT MISTAKE ON RECORD AS PRESCRIBED UNDER SECTION 254(2) OF THE ACT. THE CONTENTION RAISED IN THE MI SCELLANEOUS APPLICATION ITSELF SHOWS THAT THE ASSESSEE WANTS A SECOND ORDER AFTER RECALLING THE ORIGINAL ORDER. THE I.T.A.T. HAS NO POWER TO REVIEW ITS EARLIER ORDER. THE POWER UNDER SECTION 254(2) IS ONLY TO AMEND THE ORDER WITH A VIEW TO RECTIFY A NY MISTAKE APPARENT FROM RECORD. THE SO-CALLED MISTAKES POINTED OUT IN THE MISCELLAN EOUS APPLICATION DISCUSSED ABOVE ARE NOT MISTAKE APPARENT ON RECORD. THEREFOR E, THE SAME IS NOT COVERED UNDER SECTION 254(2) OF THE ACT. 23. IN THE RESULT, THE MISCELLANEOUS APPLICATION FI LED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER PBN/* M.A. NO.18/AGR/2009 35 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY