Madras High Court
V. T. Somasundaram vs Income Tax Officer on 17 July, 1998
Equivalent citations: [1999]70ITD398(MAD)
ORDER
Abdul Razack, J.M. The assessee preferred appeals before this Tribunal challenging the reopening action as well as addition of interest income for both the assessment years. The appeals were disposed of by order dated 13-8-1997 confirming the reopening action as well as the addition of Rs. 1,08,600. The addition of Rs. 1,08,000 for each of the assessment years was confirmed by this Tribunal by observing as under in para 4 of the appeal order dated 13-8-1997 :.- ' "We have examined the facts of this case as well as the arguments put forth by the rival parties. The question of jurisdiction and on other relevant objections have been properly dealt with and disposed of the Dy. Commissioner. (Appeals) in his orders appealed against. The Supreme Court of India in the case of Lakshmi Narayana Bhadhani v. CIT (1951) 20 ITR 594 (SC) had occasion to deal with a similar case and held that the assessing officer under- such circumstances has validly initiated proceedings for reassessment and it was not nececcssary to issue notice to every member of the family andthat after the order under section 25A the Income Tax Officer had to make an assessment of the income of the family as if no partition had taken place and calculate the amount of tax payable thereon as if it was payable by one unit. The facts of the binding decision of the Supreme Court in the case of Lakshmi Narayana Bhadhani v. CIT(1951) 20 ITR 594 (SC) are squarely applicable to the facts of the present case. We, therefore, hold that the assessing officer was reasonable and justified in starting the reassessment proceedings and that the order of the Commissioner (Appeals) is reasonable and justified. We are also of the opinion that in view of judicial discipline judgment of the higher courts should prevail upon the decisions of the lower authorities. In view of the binding decision of the Supreme Court quoted supra, we decline to interfere with the order passed by 1he Commissioner (Appeals) on this account. Coming to the objection on the method of accounting applied by the assessee it is observed that the Commissioner (Appeals) has dealt with this objection of the appellant in paras 4, 5 and 6 of' his order. The discussion made by 1he Commissioner (Appeals) and the conclusion drawn on account of accrual of income are reasonable and justified. We, therefore, decline to interfere on this account also."
2. The assessee is unhappy with the dismissal of the appeals and has filed Miscellaneous Petitions praying for reconsideration of the decision by recalling the order passed on 13-8-1997. The reasons for reconsidering the decision and recalling of the appeal order are to the effect that while disposing of the appeals, this Tribunal did not advert to or discuss the effect of various documents placed in the paper book as well as the Tribunal has not discussed the merits and demerits or the applicability of the decision of the Madras High Court in the case of CIT v. L. Venkatapathy (1987) 163 ITR 178 (Mad) and the decision of the Calcutta High Court in the case Dr. N.K. Brahamachari v. CIT (1990) 86 ITR 507 (Cal). According to the assessee the result of the appeals has disappointed him because the relevant papers to which attention was drawn during the course of the hearing of the appeals have not been adverted to by the Tribunal in the appeal order and the two judicial decisions of the High Courts do not find any discussion in the appeal order. The assessee has stated in the Miscellaneous Petitions that he is felt aggrieved by the manner in which the appeals have been dealt with leading to incorrect finding on merits which went against the assessee. According to the assessee, had the Tribunal considered the proper material cited alongwith the case laws, the Tribunal's decision would have been otherwise and not against the assessee. For these reasons, it is prayed that the order be recalled and a fresh decision be given after hearing of the appeal. The Miscellaneous Petitions, were heard on 22-5-1998.
3. After hearing both sides in relation to the submissions made for recall of the order and for giving a fresh decision by this Tribunal after rehearing of the appeals, we wish to say as under:
The power to recall an order passed by this Tribunal is only under rule 24 of the Income Tax Appellate Tribunal Rules, 1963. There is no power to recall the order passed by this Tribunal under any other provisions of the Income Tax Act or the Rules made thereunder. No doubt the Tribunal has inherent power to recall an order if there has been patent and glaring mistake of fact or law in arriving at the decision. But this power, courts have cautioned, has to be used very cautiously and sparingly and only in appropriate and deserving cases where the Tribunal is satisfied that on account of the glaring and patent mistake committed by the Tribunal grave prejudice and injustice has been caused to the litigants before it in the appeal.
4. From the submissions made in the written application which we have narrated above, it is not the case of the assessee that there has been glaring and patent mistake either of facts or law committed by this Tribunal. The grievance of the assessee is that each and every paper to which reference was made or attention drawn at the time of hearing of the appeals have not been threadbared and elaborately discussed as to how on the basis of these documents the appeals were still not allowable. The second grievance made out by the assessee is that there is no discussion as to how the two judgments of the Madras and Calcutta High Courts cited and relied upon were not relevant and had no applicability so as to allow the appeal. In view of these, the assessee wants recall of the order and a fresh decision after hearing.
5. We find the arguments of the assessee's counsel and the submissions made by the assessee in the written application having no force or substance. In para 4 which is the operative paragraph spelling out the judgment of this Tribunal, it has been stated we have examined the facts of this case as well as the arguments put forth by the rival parties". These observations clearly indicate the application of mind by the Tribunal and consideration of the relevant material including the case laws cited during the course of hearing of the appeals. For the simple reason that each and every document or each and every sentence or paragraph from such documents have not been threadbared and elaborately discussed in the appeal order does not mean that there has been non-application of mind or non-consideration of the relevant material for arriving at the decision by this Tribunal. It is sufficient if this Tribunal states that there has been examination of the facts of this case as well as arguments put forth by the rival parties.
6. The Hon'ble Supreme Court in the case of CIT v. K. Y Pilliah & Sons (1967) 63 ITR 41 (SC) have laid down as under-
"The Income Tax Appellate Tribunal is the final fact-finding authority and normally it should record its conclusion on every disputed question raised before it, setting out its reasons in support of its conclusion.
But, in failing to record reasons, when the Appellate Tribunal fully agrees with the view expressed by the Appellate Assistant Commissioner and has no other ground to record in support of its conclusion, it does not act illegally or irregularly, merely because it does not repeat the grounds of the Appellate Assistant Commissioner on which the decision was given against the assesses or the department. The criticism made by the High Court that the Tribunal had 'failed to perform its duty in merely affirming the conclusion of the Appellate Assistant Commissioner is apparently unmerited."
This decision of the Supreme Court was considered and followed by the Calcutta High Court in the case of Indo-Burma Petroleum Co. Ltd. v. CIT(1980) 124 ITR 719 at page 726 (Cal) in the below given manner:-
"The Tribunal had agreed with the order of the Appellate Assistant Commissioner and, therefore, in view of the judgment of the Supreme Court in the case of CIT v. K. Y Pilliah & Sons (1967) 63 ITR 411 (SC), it must be held that it was unnecessary for the Tribunal to give detailed or additional reasons in support of its conclusion."
More or less a similar type of grievance was raised before the Andhra Pradesh High Court in the case of Valivetti Srirarnulu v. CIT (1970) 76 ITR 551 (AP) and we deem it fit and proper to extract from the said judgment, as published in the reports at page 553, the below given observations of their Lordships of the Andhra Pradesh High Court:-
"We do not think that Mr. Ramarao is justified in contending that the Tribunal has arrived at the figure of Rs. 20,000 without any consideration of the evidence and has fixed it arbitrarily. The Tribunal has expressly stated that the Officer has given sound reasons for the additions made by him. The reference can only be to the Income Tax Officer insofar as the additions made by him were affirmed by the Appellate Assistant Commissioner. Therefore, the Tribunal felt it unnecessary to restate those reasons once again in the order. Though, in our opinion, it would have been more desirable on the part of the Tribunal to give in its own words, briefly it may be, the reasons for their decision, it cannot be said that the Tribunal acted arbitrarily and fixed the figure of Rs. 20,000."
From the above decisions of the Supreme Court as well as two High Courts, it is abundantly clear that it is not necessary or imperative on the part of the Appellate Authority, that it is to say, that this Tribunal should give additional or separate reasons if the Tribunal is in agreement with the reasons given by the lower tax authorities.
7. In the instant case the Tribunal did not deem it fit and proper to give elaborate additional reasons to uphold the impugned order of the Appellate Commissioner of Income Tax and merely endorsed the reasoning and conclusion given by him in paras 4, 5 and 6. Not only that, the Tribunal went a step ahead and stated at page 5 of the appeal order that the discussion made the Appellate Commissioner and the conclusion drawn on account of accrual of income. are reasonable and justified. We do not think that anything further or more was required to he stated or narrated in the appeal order.
8. From the contents of the written application as well as the arguments of the assessee's counsel Shri Seetharaman, it appears to us that the assessee wants another decision not being happy with the decision rendered in the appeal order dated 13-8-1997. Well if this exercise is to be done by this Tribunal it amounts to reviewing the earlier decision given on 13-8-1997. It is fairly settled by now and a trite law that power to review is a specific power which has to be conferred specifically by the Legislature and it cannot be inferred as ancillary or inherent to the appellate jurisdiction.
9. This Tribunal is a creature of the Income Tax Act, 1961, and it is well settled legal proposition that this Tribunal has no inherent power of' reviewing its order on merits though it has incidental or ancillary powers which can be exercised in order to make the appeal effective. But such power cannot be invoked to re-hear a case on merits. Once art order is passed under section 245(1) of the Act, Tribunal become functus officio subject to the provisions of section 256(1) of the Act. It can hear an application under section 254(2) only to rectify a mistake apparent on record and not for review of its order. The Supreme Court in the famous case of Patel Narshi Thakershi v. Pradyumansinghji Arjunsinghji AIR 1970 SC 1273 have laid down that the power to review is not an inherent power but has to be conferred by law either specifically or by necessary implications. It, therefore, does not stand to reason that if the power of review is not with the Tribunal, it can nonetheless exercise such a power indirectly in terms of section 254(2) when it cannot be done so directly there being no specific power conferred. As the Tribunal is not a court it has no power to review its own orders.
10. The normal rule therefore is that the remedy by way of review is a creature by statute. And if the statute does not contain power for review, then the power-cannot be exercised at all. Review proceedings imply those 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. But such a remedy we repeat is available only if provided by the statute. Even assuming that the statute does confer power of review then such a power of review can only be exercised within the parameters fixed by the statute itself'. Therefore, this Tribunal having delivered a judgment on 13-8-1997 which by operation of law has become final is riot eligible, authorised or empowered to review its own decision in a subsequent proceeding brought either in the guise of rectification proceedings under section 254(2) of the Act, or in any other manner.
11. It is no doubt true that a judicial Tribunal can recall and quasi its only order in exceptional cases when it is shown that it was obtained by fraud or by palpable mistake or was made either in matter ignorance of a statutory provision and the like and for the application of that rule the class of the. Tribunal is not a material matter but what is of substance and material is the nature of the proceedings before it. if a proceeding is in the nature of judicial proceedings, then irrespective of the class of the Tribunal the rule . applies. This has been laid down by the Punjab High Court as far as back as in the year 1960 in the case of MangatRam Kwhiala v. CIT (1960) 38 IT R 1 (Punj).
12.The Allahabad High Court in the case of Laxmi Electronic Corpn. Ltd. v. CIT (1991) 188 ITR 398 (All) have also laid down that this Tribunal has no power to review its own orders and the only power conferred under section 254(2) of the Act is the power of rectification of mistake apparent on record. Their Lordships of the Allahabad High Court in the said case of Laxmi Electronic Corpn. Lid. (supra) have further held that it is a well-settled proposition that an act of court (which means and includes a Tribunal of the nature of the Income Tax Appellate Tribunal) should not prejudice a party and drive the party to a reference under section 256 of the Act and that it must be left to the Tribunal to reopen an appeal if it finds that it has omitted to deal with an important ground urged by the party.
13. We have also gone through the decision of the Calcutta High Court in the case of CIT v. Dunlop India Ltd. (1992) 197 ITR 34 (Cal) and the decision of the Madhya Pradesh High Court, in the case of H.H.. Maharaja Martant Singh Ju-Deo v. CIT (1988) 171 ITR 586 (MP) relied by Petitioner's counsel and we find that they do not come to the rescue of the assessee to recall the appeal order and then order a fresh hearing and give a new decision perhaps in favour of the petitioner-appellant. The remedy for the petitioner for redressal lies elsewhere, but surely not before this Tribunal for review or for a fresh decision after another round.
14. In view of the above discussion and reasoning the Miscellaneous Petitions are hereby dismissed.