Income Tax Appellate Tribunal - Ahmedabad
Abbey Chemical (P) Ltd. vs Income Tax Officer on 30 March, 2005
Equivalent citations: (2005)94TTJ(AHD)275
ORDER
I.P. Bansal, J.M.
1. This appeal is filed by the assessee and is directed against the order of the CIT(A), dt. 22nd Nov., 2004, passed under the provisions of Section 154 of the IT Act, 1961. The grounds of appeal read as under:
"1. The learned CIT(A) erred in recalling the order passed under Section 250 of the IT Act, dt. 7th July, 2004, without appreciating that there are no mistakes apparent on record in the original order passed under Section 250 of the IT Act, dt. 7th July, 2004, and hence, order passed under Section 154 recalling the original order is bad in law and liable to be quashed.
2. The learned CIT(A) erred in recalling the detailed order passed after interpreting the provisions of Section 10B of the IT Act, which cannot be the subject-matter of rectification under Section 154 of the Act since debatable issues fall outside the scope and ambit of Section 154 of the Act and hence, the order passed under Section 154 of the Act recalling the original order passed under Section 250 of the Act is bad in law and liable to be quashed."
2. Vide order dt. 7th July, 2004, the learned CIT(A) after detailed discussion, had held that the assessee is entitled to exemption under Section 10B. However, vide order dt. 26th Nov., 2004, the learned CIT(A) has recalled his order to be heard afresh. With regard to the order passed by the learned CIT(A), dt. 7th July, 2004, the AO had filed an application under Section 154 on 13th Aug., 2004 in which it was requested that the said order of the CIT(A), dt. 7th July, 2004, may be reconsidered and accordingly should be rectified, It was pointed out that there were some apparent mistakes in facts and in law. The CIT, Baroda, also sent a letter to the CIT(A), dt. 1st Oct., 2004, in which a request was made that the rectification application may be considered and the matter be expedited. It was the contention of the AO that the copy of voluminous submissions filed by the assessee were not brought to his notice, therefore, the arguments of the assessee could not be rebutted by him and thus, opportunity of hearing was denied to rebut the submissions of the assessee. It is against such order of the CIT(A) (vide which earlier order has been recalled), the assessee has filed an appeal. Arguing the appeal filed by the assessee, it was vehemently argued that the recourse adopted by the CIT(A) for recalling his order on merits was not available with him. It was pleaded that scope of Section 154 is limited, as the mistake which could be rectified is only an obvious or patent mistake, which is apparent from the record. It was pleaded that the learned CIT(A) after detailed discussion in his order dt. 7th July, 2004, has held that the assessee was entitled to relief under Section 10B. There was no obvious or patent mistake in the said order. The application filed by the AO also stated of reconsideration of the earlier order. Thus, it was pleaded that reconsideration of an order passed on merits is not permissible under Section 154 of the Act. Further, reliance was placed on the following excisions to contend that the rectification has wrongly been made by the learned CIT(A) :
(i) CIT v. Ramesh Electric & Trading Co. (1993) 203 ITR 497 (Bom);
(ii) CIT v. Bhawani Prasad Girdhari Lal & Co. (1991) 187 ITR 257(All).
3. The learned Authorised Representative also informed that the Department has also filed an appeal against the order passed by the learned CIT(A), dt. 7th July, 2004, and, therefore, also there was no need for the CIT(A) for recalling his order.
4. On the other hand, learned Departmental Representative relied on the order of the CIT(A) and contended that the CIT(A) was justified in recalling his order as exemption under Section 10B was wrongly directed to be given to the assessee.
5. We have carefully considered the rival submissions in the light of the material placed before us. In our considered opinion, the recourse adopted by the learned CIT(A) was not failing within the scope of Section 154 of IT Act, 1961. CIT(A) vide his order dt. 7th July, 2004, after considering the facts of the case as well as the case laws, had decided that the assessee was eligible for exemption under Section 10B. Thereafter, the only course available with the Revenue was to file an appeal against the order of the CIT(A) which has also been filed and pending for adjudication before the Tribunal.
6. The scope of Section 154 is limited, as mistake which is obvious or patent only, can be rectified and mistake which requires to be established by arguments and long drawn process of reasoning on points on which there may be conceivable two views, cannot be "mistake apparent from record" within the meaning of Section 154 of the Act. The view taken by the learned CIT(A) in his order dt. 7th July, 2004, might have been an error of judgment, but cannot be qualified as "mistake" within the meaning of Section 154 of the Act. The case laws relied on by the learned Authorised Representative supports this view; therefore, we quash the order passed by the CIT(A), dt. 22nd Nov., 2004, and restore the order passed on 7th July, 2004.
7. In the result, the appeal filed by the assessee is allowed in the abovementioned terms.