PRINCIPAL COMMISSIONER OF INCOME TAX, ROHTAK V. JAI SINGH KARWAL, HANSI

MA 103/DEL/2025

AI Insights

The case involves a Miscellaneous Application (M.A No. 103/Del/2025) filed by the Principal Commissioner of Income Tax against Jai Singh Karwal concerning an earlier Tribunal decision (ITA No. 1963/Del/2024). The dispute originated from the Assessee receiving interest on compensation from the Land Acquisition Officer, which was initially accepted by the A.O. The PCIT later set aside this order, leading to an appeal by the Assessee, which was allowed by the Tribunal. The Revenue's M.A contended that the Tribunal's decision overlooked certain case laws, claiming an error apparent from the record. However, the Tribunal, referencing the Supreme Court's decision, clarified that it could not revisit the merits of the case under the powers of Section 254(2) and dismissed the M.A.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 633500 (ITAT-DELHI)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-06-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Other Referred Cases: CIT vs Reliance Telecom Ltd, CIT vs Reliance Communications Ltd
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: HARPREET KAUR HANSRA
• Keywords: Set aside; Revision of order
• Section: 263

Judgement Text

" 1 M.A No. 103/Del/2025 Pr. CIT Vs. Jai Singh Karwal IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘C’ NEW DELHI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER M. A NO. 103/Del/2025 (A.Y 2016-17) in (ITA No. 1963/Del/2024) Principal Commissioner of Income Tax, AayakarBhawan, Opp, Mansarover park, Rohtak, Haryana vs Jai Singh Karwal House No. 3, Model Town, Hansi, Haryana PAN : ABCPK4153H (Appellant) (Respondent) Applicant by CA Kuldeep Khera Respondent by Ms. Harpreet Kaur Hansra, Sr. DR ORDER PER YOGESH KUMAR U.S., JUDICIAL MEMBER: The present Miscellaneous Application is filed in respect of the order dated 12/11/2024 passed by the Tribunal in ITA No. 1963/Del/2024 for Assessment Year 2013-14. 2. Facts in brief are that, the Assessee receivedinterest on compensation from the land Acquisitionofficer Huda. A.O. during the assessment proceedings consideringthe reply of the Assessee, not made any addition by accepting the returned income vide order dated 29/03/2023, passed u/s 147/148 of the Income Tax Act, 1961 ('Act' for Date of Hearing 23.05.2025 Date of Pronouncement 13.06.2025 2 M.A No. 103/Del/2025 Pr. CIT Vs. Jai Singh Karwal short). The Ld. PCIT exercising the power conferred u/s 263 of the Act, passed an order on 01/03/2024 wherein the Ld. PCIT set aside the order of the A.O. and remanded the matter for fresh adjudication. Aggrieved by the order of the PCIT passed u/s 263 of the Act dated 01/03/2024,the Assesseepreferred the Appeal before the Tribunalin ITA No. 103/Del/2025. The Co-ordinate Bench of the Tribunal vide order dated 12/11/2024, allowed the Appeal of the Assessee. The revenue preferred the present M.A contending that the Tribunal has not considered certain case laws and allowed the appeal which is error apparent from record, thus, sought for allowing the M.A. 3. We have heard both the parties and perused the material available on record. The Tribunal while deciding the Appeal, relied on the Judgments of Hon'ble Supreme Court and the allowed the Appeal which is in the opinion of the Bench that the same is a plausibleview. 4. The power and the scope of the Tribunal for rectification of the order u/s 254(2) of the Act has been dealt by the Hon’ble Supreme Court in the case of CIT vs Reliance Telecom Ltd in Civil Appeal No. 7110 of 2021 and CIT vs Reliance Communications Ltd in Civil Appeal No. 7111 of 2021 dated 3.12.2021, wherein the Hon'ble Supreme Court has held that the Tribunal has no power to recall/review its own orders and not 3 M.A No. 103/Del/2025 Pr. CIT Vs. Jai Singh Karwal required to re-visit its earlier order on its merits. If any of the parties is of the opinion that the order passed by the ITAT was erroneous, either on facts or in law, in that case, the only remedy available to the party is to prefer the appeal before the High Court. The relevant para in the order of the Hon'ble Supreme Court is reproduced below: 3.1 We have considered the order dated 18.11.2016 passed by the ITAT allowing the miscellaneous application in exercise of powers under Section 254(2) of the Act and recalling its earlier order dated 06.09.2013 as well as the original order passed by the ITAT dated 06.09.2013. 3.2 Having gone through both the orders passed by the ITAT, we are of the opinion that the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013 is beyond the scope and ambit of the powers under Section 254(2) of the Act. While allowing the application under Section 254(2) of the Act and recalling its earlier order dated 06.09.2013, it appears that the ITAT has re-heard the entire appeal on merits as if the ITAT was deciding the appeal against the order passed by the C.I.T. In exercise of powers under Section 254(2) of the Act, the Appellate Tribunal may amend any order passed by it under sub-section (1) of Section 254 of the Act with a view to rectifying any mistake apparent from the record only. Therefore, the powers under Section 254(2) of the Act are akin to Order XLVII Rule 1 CPC. While considering the application under Section 254(2) of the Act, the Appellate Tribunal is not required to re-visit its earlier order and to go into detail on merits. The powers under Section 254(2) of the Act are only to rectify/correct any mistake apparent from the record. 4. In the present case, a detailed order was passed by the ITAT when it passed an order on 06.09.2013, by which the ITAT held in favour of the Revenue. Therefore, the said order could not have been recalled by the Appellate Tribunal in exercise of powers under Section 254(2) of the Act. If the Assessee was of the opinion that the order passed by the ITAT was erroneous, either on facts or in law, in that case, the only remedy available to the Assessee was to 4 M.A No. 103/Del/2025 Pr. CIT Vs. Jai Singh Karwal prefer the appeal before the High Court, which as such was already filed by the Assessee before the High Court, which the Assessee withdrew after the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013. Therefore, as such, the order passed by the ITAT recalling its earlier order dated 06.09.2013 which has been passed in exercise of powers under Section 254(2) of the Act is beyond the scope and ambit of the powers of the Appellate Tribunal conferred under Section 254 (2) of the Act. Therefore, the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013 is unsustainable, which ought to have been set aside by the High Court. 5. From the impugned judgment and order passed by the High Court, it appears that the High Court has dismissed the writ petitions by observing that (i) the Revenue itself had in detail gone into merits of the case before the ITAT and the parties filed detailed submissions based on which the ITAT passed its order recalling its earlier order; (ii) the Revenue had not contended that the ITAT had become functus officio after delivering its original order and that if it had to relook/revisit the order, it must be for limited purpose as permitted by Section 254(2) of the Act; and (iii) that the merits might have been decided erroneously but ITAT had the jurisdiction and within its powers it may pass an erroneous order and that such objections had not been raised before ITAT. 6. None of the aforesaid grounds are tenable in law. Merely because the Revenue might have in detail gone into the merits of the case before the ITAT and merely because the parties might have filed detailed submissions, it does not confer jurisdiction upon the ITAT to pass the order de hors Section 254(2) of the Act. As observed hereinabove, the powers under Section 254(2) of the Act are only to correct and/or rectify the mistake apparent from the record and not beyond that. Even the observations that the merits might have been decided erroneously and the ITAT had jurisdiction and within its powers it may pass an order recalling its earlier order which is an erroneous order, cannot be accepted. As observed hereinabove, if the order passed by the ITAT was erroneous on merits, in that case, the remedy available to the Assessee was to prefer an appeal before the High Court, which in fact was filed by the Assessee before the High 5 M.A No. 103/Del/2025 Pr. CIT Vs. Jai Singh Karwal Court, but later on the Assessee withdrew the same in the instant case. 7. In view of the above and for the reasons stated above, the impugned common judgment and order passed by the High Court as well as the common order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013 deserve to be quashed and set aside and are accordingly quashed and set aside. The original orders passed by the ITAT dated 06.09.2013 passed in the respective appeals preferred by the Revenue are hereby restored. 8. Considering the fact that the Assessee had earlier preferred appeal/s before the High Court challenging the original order passed by the ITAT dated 06.09.2013, which the Assessee withdrew in view of the subsequent order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013, we observe that if the Assessee/s prefers/prefer appeal/s before the High Court against the original order dated 06.09.2013 within a period of six weeks from today, the same may be decided and disposed of in accordance with law and on its/their own merits and without raising any objection with respect to limitation. 9. Both the appeals are accordingly allowed in the aforesaid terms. However, there shall be no order as to costs. \"3.1 We have considered the order dated 18.11.2016 passed by the ITAT allowing the miscellaneous application in exercise of powers under Section 254(2) of the Act and MA No 3 of 2024 SamriddhiPetropdocuts P Ltd recalling its earlier order dated 06.09.2013 as well as the original order passed by the ITAT dated 06.09.2013. 3.2 Having gone through both the orders passed by the ITAT, we are of the opinion that the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated06.09.2013 is beyond the scope and ambit of the powers under Section 254(2) of the Act. While allowing the application under Section 254(2) of the Act and recalling its earlier order dated 06.09.2013, it appears that the ITAT has re- heard the entire appeal on merits as if the ITAT was deciding the appeal against the order passed by the C.I.T. In exercise of powers under Section 254(2) of the Act, the Appellate Tribunal may amend any order passed by it under sub-section (1) of Section 254 of the 6 M.A No. 103/Del/2025 Pr. CIT Vs. Jai Singh Karwal Act with a view to rectifying any mistake apparent from the record only. Therefore, the powers under Section 254(2) of the Act are akin to Order XLVII Rule 1 CPC. While considering the application under Section 254(2) of the Act, the Appellate Tribunal is not required to re-visit its earlier order and to go into detail on merits. The powers under Section 254(2) of the Act are only to rectify/correct any mistake apparent from the record. 4. In the present case, a detailed order was passed by the ITAT when it passed an order on 06.09.2013, by which the ITAT held in favour of the Revenue. Therefore, the said order could not have been recalled by the Appellate Tribunal in exercise of powers under Section 254(2) of the Act. If the Assessee was of the opinion that the order passed by the ITAT was erroneous, either on facts or in law, in that case, the only remedy available to the Assessee was to prefer the appeal before the High Court, which as such was already filed by the Assessee before the High Court, which the Assessee withdrew after the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013. Therefore, as such, the order passed by the ITAT recalling its earlier order dated 06.09.2013 which has been passed in exercise of powers under Section 254(2) of the Act is beyond the scope and ambit of the powers of the Appellate Tribunal conferred under Section 254 (2) of the Act. Therefore, the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013 is unsustainable, which ought to have been set aside by the High Court. 5. From the impugned judgment and order passed by the High Court, it appears that the High Court has dismissed MA No 3 of 2024 SamriddhiPetropdocuts P Ltd the writ petitions by observing that (i) the Revenue itself had in detail gone into merits of the case before the ITAT and the parties filed detailed submissions based on which the ITAT passed its order recalling its earlier order; (ii) the Revenue had not contended that the ITAT had become functus officio after delivering its original order and that if it had to relook/revisit the order, it must be for limited purpose as permitted by Section 254(2) of the Act; and (iii) that the merits might have been decided erroneously but ITAT had the jurisdiction and within its powers it may pass an erroneous order and that such objections had not been raised before ITAT. 7 M.A No. 103/Del/2025 Pr. CIT Vs. Jai Singh Karwal 6. None of the aforesaid grounds are tenable in law. Merely because the Revenue might have in detail gone into the merits of the case before the ITAT and merely because the parties might have filed detailed submissions, it does not confer jurisdiction upon the ITAT to pass the order de hors Section 254(2) of the Act. As observed hereinabove, the powers under Section 254(2) of the Act are only to correct and/or rectify the mistake apparent from the record and not beyond that. Even the observations that the merits might have been decided erroneously and the ITAT had jurisdiction and within its powers it may pass an order recalling its earlier order which is an erroneous order, cannot be accepted. As observed hereinabove, if the order passed by the ITAT was erroneous on merits, in that case, the remedy available to the Assessee was to prefer an appeal before the High Court, which in fact was filed by the Assessee before the High Court, but later on the Assessee withdrew the same in the instant case. 7. In view of the above and for the reasons stated above, the impugned common judgment and order passed by the High Court as well as the common order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013 deserve to be quashed and set aside and are accordingly quashed and set aside. The original orders passed by the ITAT dated 06.09.2013 passed in the respective appeals preferred by the Revenue are hereby restored.\" 5. In the light of the above, since the Co-ordinate Bench of the Tribunal while allowing the Appeal, decided the Appeal on its merit by relying on various Judgments decided the issue on its merit, therefore, entertaining the present Miscellaneous application filed by the Revenue will amounts to re-visiting the merits of the case, which is beyond the scope of the power conferred on the Tribunal u/s 254(2) of the Act as held by the Hon’ble Supreme Court in the case of CIT vs. Reliance 8 M.A No. 103/Del/2025 Pr. CIT Vs. Jai Singh Karwal Petroproducts(supra).Thus, we do not find any reason to allow the miscellaneous application filed by the Revenue, which is devoid of merit. 6. In the result, M.A No filed by the Revenue is dismissed. Order pronounced in the open court on 13/06/2025. Sd/- Sd/- (RIFAUR RAHMAN) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 13/06/2025 R.N, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi "