THE DY. COMMR. INCOME TAX, CIRCLE-2(1), RAJKOT-GUJARAT V. BACKBONE ENTERPRISE LTD., RAJKOT-GUJARAT

MA 48/RJT/2023

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The case revolves around a miscellaneous application by the Revenue seeking rectification of an earlier Tribunal order concerning the eligibility of the assessee, Backbone Enterprise Ltd., for a deduction under section 801A(4) of the Income Tax Act, 1961. The Revenue contended that the Tribunal had overlooked certain arguments and facts presented during the original hearing. However, the Tribunal found that it had adequately considered all submissions and that the application for rectification was essentially a request for a review, which is not permissible under section 254(2). The Tribunal emphasized that rectification under this section is limited to correcting mistakes that are apparent and ex-facie, without the need for extensive investigation or argument.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705344 (ITAT-RAJKOT)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-07-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2012-2013
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV LD.
• Assessee Lawyers: D.M. RINDANI LD
• Keywords: Opportunity of being heard

Judgement Text

" 1 आयकर अपीलीय अिधकरण,राजकोट Æयायपीठ,राजकोट IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT. BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER Miscellaneous Application No.48/RJT/2023 (arising out of I.T.A No. 114/RJT/2018) िनधाªरणवषª/Assessment Year: 2012-13 Dy. Commissioner of Income-tax, Circle-2(1), 311, Aayakar Bhavan, 3rd Floor, Race Course Ring Road, Rajkot – 360001 [PAN: AABCB 9255 E] Vs. M/s. Backbone Enterprise Ltd. Backbone House, M-43, Gujrat Housing Board, Kalawad Road, Rajkot-360001 अपीलाथê / Appellant ÿÂयथê/Respondent िनधाªåरतीकìओरसे /Assessee by Shri D.M. Rindani – Ld. AR राजÖवकìओरसे /Revenue by Shri. Abhimanyu Singh Yadav –Ld. Sr.DR सुनवाईकìतारीख/ Date of hearing: 20.06.2025 उĤोषणा कì तारीख/Pronouncement on: 04.07.2025 आदेश /O R D E R PER Dr. A.L. Saini, AM: By way of this captioned Miscellaneous Applications, the Revenue 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 in ITA No.114/RJT/2018, dated 16.05.2023. 2. The case of the Revenue in this Miscellaneous Application is that Tribunal did not consider the arguments of revenue, besides, it seems from the order of Hon'ble ITAT that Hon'ble ITAT has not taken into consideration certain aspects and facts which were specifically mentioned by the CIT(DR) in his written MA No 02/RJT/2025-A.Y. 2019-20 Mihir Rajeshkumar Dhamecha 2 submission and which were important to determine, if the assessee is eligible for deduction u/s. 801A(4) or not and Tribunal decided the matter considering only one aspect and following the order of its decision in assessee's own case for assessment year 2011-12 in ITA No. 129 and 150/Rjt/2015 dated 28/09/2022. Thus, there is a mistake apparent on record within the meaning of provision of section 254 of the Act. 3. Learned Senior DR for the revenue argued that if a person makes the investment and himself executes the development work, that is, carry out the civil construction work, then he will be eligible for deduction u/s.801A (4) of the Act. The assessee, under consideration does not satisfy the conditions of section 801A (4) of the Act, therefore, order passed by the Tribunal contains patent error. In view of the factual position, there is a mistake apparent from records which need to be rectified. Hence, the Tribunal order, dated 16.05.2023, in ITA No.114/Rjt/2018-19, may be recalled, and matter may be again heard on merit. 4. We have heard both the parties. Before we adjudicate the issue under consideration, first of all, Let us consult the provisions of section 254(2) of the Act, which reads as follows: “Orders of Appellate Tribunal. “254. (2) The Appellate Tribunal may, at any time within [six months from the end of the month in which the order was passed], with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the [Assessing] Officer. Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub- section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard : [Provided further that any application filed by the assessee in this sub-section on or after the 1st day of October, 1998, shall be accompanied by a fee of fifty rupees.]” 5. Having gone through sub-section 2 of section 254 of the Act, as noted above, we observed that “any mistake apparent from the record” can be rectified. The plain meaning of the word 'apparent' is that it must be something MA No 02/RJT/2025-A.Y. 2019-20 Mihir Rajeshkumar Dhamecha 3 which appears to be ex-facie and incapable of argument and debate. Thus, section 254(2) of the Act does not cover any mistake which may be discovered by a complicated process of investigation, argument or proof. Therefore, amendment of an order under section 254(2) of the Act, does not mean entire obliteration of order originally passed by the Tribunal and its substitution by a new order of Tribunal, this is not permissible under section 254(2) of the Act. Power to rectify an order, under section 254(2) of the Act is extremely limited and it does not extend to correcting errors of law, or re-appreciating factual findings. 6. We note that Tribunal has narrated the facts in para No. 3, of its order, wherein learned DR for the revenue argued stating the facts of the assessee`s case, on merit, and in para No.4, the Tribunal has recorded the arguments of learned Counsel for the assessee and in para Nos. 5 to 8, the Tribunal has analyzed the facts and then reached on the conclusion. The Tribunal has also examined, project wise, the conditions for claiming deduction u/s. 80IA(4) of the Act. We note that ld DR for the revenue, argued again, before us, on merit of the case, which should not be allowed when the Tribunal has passed the order on merit. We note that written submission filed by the ld DR for the revenue during the course of hearing have been considered by the Tribunal in its finding and have been duly dealt with in its order very clearly. Such detailed and speaking order of the Tribunal cannot be recalled, as there is no mistake apparent from record. 7. We also note that Tribunal cannot review its own order. To consider something again in order to decide if changes are necessary, is not the object of section 254(2) of the Act, as explained above. The 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 MA No 02/RJT/2025-A.Y. 2019-20 Mihir Rajeshkumar Dhamecha 4 Revenue cannot be permitted to reopen and re-argue the whole matter, which is beyond the scope of the section 254(2) of the Act. Based on these facts and circumstances, we find that there is no mistake apparent from record in the order of the Tribunal, hence we dismiss the miscellaneous application of the revenue. 8. In the result, miscellaneous application filed by the revenue is dismissed. Order is pronounced in the open court on 04 /07/2025. Sd/- Sd/- (DINESH MOHAN SINHA) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Rajkot िदनांक/ Date: 04/07/20255 Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr. CIT 5. DR/AR, ITAT, Rajkot 6. Guard File By order Assistant Registrar/Sr. PS/PS ITAT, Rajkot "