Income Tax Appellate Tribunal - Chennai
Singara Nilgiri Plantation Company, ... vs Assessee on 1 April, 2009
IN THE INCOME TAX APPELLATE TRIBUNAL
Bench 'A' Chennai
Before Shri U.B.S. Bedi, J.M. and
Shri Abraham P. George, AM
.....
M.P. Nos. 298 & 299 /Mds/2009
[A/o I.T.A. No. 258 & 259/Mds/2008]
Assessment Years 2003-04 & 2004-05
M/s Singara Nilgiri Plantation Company Vs. The D.C.I.T
Singara Estate, Coonoor Circle - I (1)
The Nilgiris OOty
PAN : AAECS 9612 C
(Appellant) (Respondent)
Assessee by : Shri S. Sridhar
Department by : Shri B. Srinivas
ORDER
Per U.B.S. Bedi, J.M:
By means of these two applications, assessee seeks to get recalled the order of the Tribunal on the ground that the Bench, in consideration of preliminary issue with reference to Rule 47 and 45 of r.w.s. 140 of the Income-tax Act, 1961 [in short, the Act], had held that the Manager who signed the appeal papers had no competence even on the consideration of the Power of Attorney Page 2 of 14 MP Nos. 298 & 299 /Mds/2009 executed by the partners of the petitioner. Accordingly, at para 7 of the common order, it was held that the petitioner/assessee did not opt to correct the defect pointed out and hence dismissed the appeals as not maintainable.
2. Since facts are identical and the issue involved is similar, arising out of consolidated order of this Tribunal dated 1.4.2009, we are disposing off these MPs through this consolidated order.
3. At the time of hearing, the ld counsel for assessee, while reiterating the submissions as made in the application, pleaded that the Bench has omitted to notice that the return of income for Assessment Year 2004-05 was signed by the Power of Attorney/Manager of petitioner firm and the said return was acted upon in terms of section 140 of the Act in framing the assessment. Further, the Power of Attorney referred to and considered in the common order under consideration, in fact, had authorized the manager/ Power of Attorney to sign the appeal papers. In fact, the power assigned in clause (1) and (7) would come to the rescue of the petitioner firm to contend that the manager had competence to Page 3 of 14 MP Nos. 298 & 299 /Mds/2009 sign the return of income as well as to sign the appeal papers. Therefore, it was prayed that the order of the Bench dated 1.4.2009 may be recalled. It was further submitted that the order of the Bench dismissing the plea on the preliminary issue may be recalled in the interest of justice and without prejudice to the above stand, the petitioner is stated to have enclosed rectified form No. 36 duly signed by the partner in triplicate for each of the Assessment Years under consideration with prayer to recall the order passed on technical grounds for rendering decision on merits
4. The ld. D.R. strongly opposed the applications of the assessee mainly on the ground that the Manager is not authorized to sign the papers. In view of the specific reasons made in this regard and this Bench of the Tribunal taking note of this fact has concluded to dismiss the appeals of the assessee and now the assessee is trying to file fresh appeal papers duly signed by partners of the firm which, at most, is additional evidence and in rectificatory proceedings, same can neither be admitted nor acted upon. The Bench has rightly dismissed the appeals of the assessee as the appeals papers were not signed by the competent person as Page 4 of 14 MP Nos. 298 & 299 /Mds/2009 envisaged in the relevant provisions. In case applications of the assessee are accepted, that would amount to review of the order, which is not permissible. As such, it was pleaded for dismissal of both the applications of the assessee.
5. In rejoinder, the ld counsel for assessee submitted that in order to give substantial justice, applications of the assessee should be accepted as defect pointed out has been duly rectified so the applications of the assessee for both the years may be accepted.
6. We have heard the rival submissions and perused the Tribunal orders and find that the Tribunal, while deciding both the appeals through a consolidated order, has observed in paras 5 to 7 of its order which is reproduced, as under:
"5. We have heard the rival submissions on this preliminary issue and considered the facts and material on record. Sub- rule (1) to Rule 47 of the Income Tax Rules, 1962 read as under:-Page 5 of 14
MP Nos. 298 & 299 /Mds/2009 "(1) An appeal under sub-section (1) or sub-
section (2) of section 253 to the Appellate Tribunal shall be made in Form No.36, and where the appeal is made by the assessee, the form of appeal, the grounds of appeal and the form of verification appended thereto shall be signed by the person specified in sub-rule (2) of the rule
45."
Sub-rule (2) of Rule 45 of the Income Tax Rules, 1962 says that the grounds of appeal and the form of verification appended thereto relating to an assessee shall be signed and verified by the person who is authorized to sign the return of income under section 140 of the Income-tax Act, 1961, as applicable to the assessee. Section 140 of the I.T. Act prescribes that in the case of a firm the return is to be signed by the Managing Partner thereof or where for any unavoidable reason such Managing Partner is not able to sign and verify the return, or where there is no Managing Partner as such, by any partner thereof, not being a minor.
6. From the combined reading of the above Rules and Section, it transpires that in the case of the firm, the appeal Memo has to be signed by the Managing Partner or any of the partner and definitely not by Manager of the firm. Further, on going through the copy of the Power of attorney filed Page 6 of 14 MP Nos. 298 & 299 /Mds/2009 along with the letter dated 18.3.2007 by the Manager addressed to the ITAT, from para 3 of the said Power of attorney, it is clear that the Manager has been authorized to receive ordinary and registered letters, communications, notices, demands, etc. on behalf of the firm and all non- resident partners from the Income Tax, Wealth Tax, Tamil Nadu Agricultural Income Tax and Tamil Nadu General Sales Tax, Kerala Sales Tax Department and appear/represent in person or by delegation of power in favour of persons as the said attorney think fit and proper and as may be necessary. On going through the above clause in the Power of attorney, it is clear that the power has been given to the Manager only to receive notices, etc. and to represent the firm before the Income-tax authorities and not for signing the return of income on behalf of the firm. If the Manager is not given power to sign the return of income, he cannot sign Appeal Memo before the Tribunal.
7. In view of the above discussion, we are constrained to dismiss the appeals as not maintainable for the reason that in spite of given opportunity for correcting the defect, the assessee did not opt to correct the defect pointed out by the Tribunal. Hence, these two appeals are dismissed as not maintainable."
Page 7 of 14
MP Nos. 298 & 299 /Mds/2009
7. Since the order has been passed giving proper reasoning and basis and assessee has not been able to point out any apparent mistakes in the order, nor the same has been noticed by us so we do not find any reason to recall the said order and in our view the applications of the assessee are liable to be dismissed being without any merits. Otherwise also, in case the applications of the assessees are considered and accepted, it would amount to review of the order of the Tribunal which is not permissible as rightly pointed out by the ld. D.R. Useful reference can be made to the decisions hereinafter noted.
7.1 The Hon'ble Orissa High Court in the case of CIT & Another vs. I.T.A.T and Another (198 ITR 188) it was held as under:
"APPELLATE TRIBUNAL - POWERS OF APPELLATE TRIBUNAL - POWER TO RECTIFY ITS ORDER - TRIBUNAL HOLDING THAT ARBITRATION EXPENSES NOT ALLOWABLE AS A SEPARATE ITEM AS FIXED PERCENTAGE OF AWARD MONEY TAKEN AS PROFIT OF CONTRACT BUSINESS - TRIBUNAL CANNOT ALLOW ARBITRATION EXPENSES IN RECTIFICATION PROCEEDING - INCOME TAX ACT 1961. SEC 254(2)."Page 8 of 14
MP Nos. 298 & 299 /Mds/2009 7.2 Yet in another case, the Calcutta High Court in the case of CIT vs Gokul Chand Agarwal (202 ITR 14), has dealt with the same and opined as under:
"Section 254(2) of the Income Tax Act, 1961, empowers the Tribunal to amend its order passed under section 254(1) to rectify any mistake apparent from the record either suo moto or on an application. The jurisdiction of the Tribunal to amend its order thus depends on whether or not there is a mistake apparent from the record. If, in its order, there is no mistake which is patent and obvious on the basis of the record, the exercise of the jurisdiction by the Tribunal under section 254(2) will be illegal and improper. An oversight of a fact cannot constitute an apparent mistake rectifiable under section 254(2). This might, at the worst, lead to perversity of the order for which the remedy available to the assessee is not under section 254(2) but a reference proceeding under section 256. The normal rule is that the remedy by way of review is a creature of the statute and, unless clothed with such power by the statute, no authority can exercise the power. Review proceedings imply proceedings where a party, as of right, can apply for reconsideration of the matter, already decided upon, after a fresh hearing on Page 9 of 14 MP Nos. 298 & 299 /Mds/2009 the merits o the controversy between the parties. Such remedy is certainly not provided by the Income Tax Act, 1961, in respect of proceedings before the Tribunal."
7.3 In similar situation, while dealing with the rectification, the Hon'ble Andhra Pradesh High Court in the case of CIT and Anr vs. I.T.A.T and Anr (206 ITR 126 has held as under:
"The appellate Tribunal, being a creature of the statute, has to confine itself in the exercise of its jurisdiction to the enabling or empowering terms of the statute. It has no inherent power. Even otherwise, in cases where specific provision delineates the powers of the court or Tribunal, it cannot draw upon its assumed inherent jurisdiction and pass orders as it pleases. The power of rectification which is specifically conferred on the Tribunal has to be exercised in terms of that provision. It cannot be enlarged on any assumption that the Tribunal has got an inherent power of rectification or review or revision. It is axiomatic that such power of review or revision has to be specifically conferred, it cannot be inferred. Unless there is a mistake apparent from the record in the sense of patent, obvious and clear error or mistake, the Tribunal cannot recall its previous order. If the error or mistake is one which could be established only by long drawn arguments or Page 10 of 14 MP Nos. 298 & 299 /Mds/2009 by a process of investigation and research, it is not a mistake apparent from the record."
7.4 Further, the Hon'ble Supreme Court in the case of CIT vs Karam Chand Thapar and Br. P. Ltd. (176 ITR 535) has held as under:
"APPELLATE TRIBUNAL - DUTY TO CONSIDER CUMULATIVE EFFECT OF CIRCUMSTANCES AND TOTALITY OF FACTS - NO NEED TO STATE SO IN APPELLATE ORDER SPECIFICALLY - INCOME TAX ACT, 1961, SEC. 254 Further it was held as under:
"It is equally well settled that the decision of the Tribunal has not to be scrutinized sentence by sentence merely to find out whether all facts have been set out in detail by the Tribunal or whether some incidental fact which appears on the record has not been noticed by the Tribunal in its judgment. If the court, on a fair reading of the judgment of the Tribunal, finds that it has taken into account all relevant material and has not taken into account any irrelevant material in basing its conclusions, the decision of the Tribunal is not liable to be interfered with, unless, of course, the conclusions arrived at by the Tribunal are perverse.Page 11 of 14
MP Nos. 298 & 299 /Mds/2009 It is not necessary for the Tribunal to state in its judgement specifically or in express words that it has taken into account the cumulative effect of the circumstances or has considered the totality of the facts, as if that were a magic formula; if the judgment of the tribunal shows that it has, in fact, done so, there is no reason to interfere with the decision of the Tribunal.
7.5 Similarly the Bombay High Court in the case of CIT-vs- Ramesh Electric and Trading Co. (203 ITR 497) .............It is an accepted position that the Appellate Tribunal does not have any power to review its own orders under the provisions of the Act. The only power which the Tribunal possesses is to rectify any mistake in its own order which is apparent from the record........ The power of rectification under section 254(2) can be exercised only when the mistake which is sought to be rectified s an obvious and patent mistake which is apparent from the record and not a mistake which required to be established by arguments and a long drawn process of reasoning on points on which there may conceivably be two opinion. Failure of the Tribunal to consider an argument advanced by either party for arriving at a conclusion is not an error apparent on the Page 12 of 14 MP Nos. 298 & 299 /Mds/2009 record, although it may be an error of judgments........................"
7.6 We also draw support here from Hon'ble Madras High Court decision in T.C.(A) No. 156 of 2006 dated 21.08.2007 in the case of CIT Vs. Tamil Nadu Small Industries Development Corporation Ltd. wherein the Hon'ble High Court held as under:-
"The Tribunal has no power to review its order. When the Tribunal has already decided an issue by applying its mind against the assessee, the same cannot be rectified under Section 254 (2) of the Act. There was no necessity whatsoever on the part of the Tribunal to review its own order. Even after the examination of the judgments of the Tribunal, we could not find a single reason in the whole order as to how the Tribunal is justified and for what reasons. There is no apparent error on the face of the record and thereby the Tribunal sat as an appellate authority over its own order. It is completely impermissible and the Tribunal has traveled out of its jurisdiction to allow a Miscellaneous Petition in the name of reviewing its own order".
"In the present case, in the guise of rectification, the Tribunal reviewed its earlier order and allowed the Miscellaneous Petition which is not in accordance with law. Section 254(2) of the Act does not contemplate rehearing of the appeal for a fresh disposal and doing so, would obliterate the distinction between the power to rectify mistakes and power to review the order made by the Tribunal. The scope and ambit of the application of Section 254(2) is limited and narrow. It is restricted to rectification of mistakes apparent from the record. Recalling the order obviously would mean passing of a fresh order. Recalling of the order is not permissible Page 13 of 14 MP Nos. 298 & 299 /Mds/2009 under Section 254(2) of the Act. Only glaring and any mistake apparent on the face of the record alone can be rectified and hence anything debatable cannot be a subject matter of rectification."
7.7 Further, we place reliance upon Hon'ble Delhi High Court exposition on the scope of rectification u/s 254(2) as reported in the case of Ras Bihari Bansal Vs. Commissioner of Income Tax (2007) 293 ITR 365:-
"Section 254 of the Income Tax Act, 1961, enables the concerned authority to rectify any "mistake apparent from the record". It is well settled that an oversight of a fact cannot constitute an apparent mistake rectifiable under this section. Similarly, failure of the Tribunal to consider an argument advanced by either party for arriving at a conclusion, is not an error apparent on the record, although it may be an error of judgment. The mere fact that the Tribunal had not allowed a deduction, even if the conclusion is wrong, will be no ground for moving an application under section 254(2) of the Act. Further, in the garb of an application for rectification, the assessee cannot be permitted to reopen and re-argue the whole matter, which is beyond the scope of the section."
8. Therefore, in view of the facts, circumstances, in the light of ratio of decisions cited and discussion as held above, we do not find any substance in the applications of the assessee and dismiss them being devoid of any merits.
Page 14 of 14
MP Nos. 298 & 299 /Mds/2009
9. In the result, M.Ps filed by the assessees stand dismissed.
Order pronounced in the court on 04.11.2010.
(Abraham P. George) (U.B.S. Bedi)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Chennai,
Dated the 04.11.2010.
VL
Copy to:
Assessee/AO/CIT (A)/CIT/D.R./Guard file