Income Tax Appellate Tribunal - Chennai
C.K.Sundaram, Coimbatore vs Assessee on 2 September, 2011
IN THE INCOME-TAX APPELLATE TRIBUNAL
CHENNAI 'A' BENCH, CHENNAI.
Before Shri.U.B.S. Bedi J.M. & Shri. Abraham P. George, A.M.
M.A. Nos. 110, 111, 112, 113, 114, 115, 116, 117, 118 and 124/Mds/2011
[In I.T.A. Nos. 668, 669, 670, 671, 672, 673, 674, 675, 676 and 667/Mds/2008 &
C.O.Nos. 103, 104, 105, 106, 92, 93, 94, 95, 96 and 102/Mds/2008]
Assessment Years: 2001-02, 02-03, 03-04, 04-05, 2000-01, 01-02, 02-03, 03-04, 04-
05 and 2000-01
M/s. C.K.Sundaram, Income Tax Officer,
31, Vinayakar Koil Street, Vs. Ward II (2),
Chinnavedampatti, Ganapathi, Coimbatore 18.
Coimbatore 641 006
[PAN AADFC7572L]
(Applicant) (Respondent)
M.A. Nos. 119, 120, 121, 122 and 123/Mds/2011
[In I.T.A. Nos. 677, 678, 679, 680 & 681/Mds/2008 and
C.O. Nos. 97, 98, 99, 100 and 101/Mds/2008
Assessment Years: 2000-01, 01-02, 02-03, 03-04 and 04-05
Smt. S. Sulochana, Income Tax Officer,
31, Vinayakar Koil Street, Ward II (2),
Chinnavedampatti, Ganapathi, Vs. Coimbatore 18.
Coimbatore 641 006
[PAN: AVBPS2663K]
(Applicant) (Respondent)
Assessee by : Shri S. Sridhar, Erode, Advocate
Revenue by : Shri Shaji P. Jacob
Date of Hearing : 02.09.2011
Date of Pronouncement : 09.09.2011
ORDER
PER U.B.S. Bedi, J.M.
These 15 MPs have been filed by two assessees against consolidated order passed in the appeals of the Revenue and COs of the assessees, dated 25.02.2009 relevant to different assessment years.
2 M.A. Nos Nos.110- 110-124/Mds/ 124/Mds/11 /Mds/11
2. Since these MPs, arise from the consolidated order, having similar facts and same issues, therefore being disposed of by this single order for sake of convenience.
3. At the very outset, the ld. Counsel for the assessee submitted that in these cases, the ld. CIT(A), in different appeals, has dismissed the ground relating to limitation raised by the assessee, whereas, he has allowed the appeal that no specific charge has been made, so, no penalty can be levied when income was estimated and on the ground raised that mere addition to the income returned is not conclusive evidence for levy of penalty/penalties for different years. So, reversal of CIT(A)'s order or setting aside his order gives rise to rectification of the impugned order for which, the assessees' counsel prayed. That apart, the assessees' counsel pleaded that no doubt, while setting aside the orders of the ld. CIT(A), in all these cases and restoring the matter back on the file of the ld. CIT(A), the Tribunal has given a specific direction to redecide the appeals while considering the recent decision of Hon'ble Supreme Court in the case of UOI Vs. Dharmendra Textiles Processors and others ( 306 ITR 277), whereas all points raised have not been specifically dealt with by the Tribunal. Therefore, this is a mistake apparent from the record, which needs rectification.
4. The ld. DR strongly objected to such applications of the assessees on the ground that these are not maintainable in as much as, in the order passed, these appeals and CO's of assessees', para 6 clearly mentions that both the sides have admitted that cases needed to be examined in the light of recent decision of the Hon'ble Supreme Court in the case of UOI Vs. Dharmendra Textiles Processors and others (supra), so this Bench, after reproducing para 13 and 14 of ld. CIT(A)'s order in its para 3 has concluded to remit the matter back on the file of the ld. CIT(A), so it cannot be said that 3 M.A. Nos Nos.110- 110-124/Mds/ 124/Mds/11 /Mds/11 there is a mistake apparent from record or any point, which was raised in a appeals, which were not considered and in case these applications of the assessees are accepted that would amount to review of the order, which is not permissible and otherwise, the consolidated order of the Tribunal is very detailed and covers all relevant points and moreover, the assessees' counsel and the Department have admitted non- consideration of Hon'ble Supreme Court's decision and for remitting the matters back on the file of the ld. CIT(A) for considering such judgment. Therefore, there is no occasion for making any rectification of the order, as such, all the applications should be dismissed.
5. We have considered the rival submissions and gone through the impugned order and find that firstly, the assessees and the Department are admitted before this Bench that the cases relied upon by the ld. CIT(A) are needed to be re-examined in the light of recent decision of Hon'ble Supreme Court in the case of UOI Vs. Dharmendra Textiles Processors and others (supra) and in the circumstances, the Tribunal has set aside the orders of the ld. CIT(A) and restored the matters back on his file and in the impugned order relevant portions of ld. CIT(A)'s order have duly been incorporated in para 3 of the order and considered in the light of relevant provisions and case law. So, there appears to be no apparent mistake on record, which could be rectified. Moreover, as rightly pointed out by the ld. DR, in case applications of the assessees are accepted that would amount to review of the order, which is not permissible under law. Section 254(2) of the Act makes it amply clear that a 'mistake apparent from the record' is rectifiable. In order to attract the application of section 254(2), a mistake must exist and the same must be apparent from the record. The power to rectify the mistake, however, does not cover 4 M.A. Nos Nos.110- 110-124/Mds/ 124/Mds/11 /Mds/11 cases where a revision or review of the order is intended. 'Mistake' means to take or understand wrongly or inaccurately; to make an error in interpreting, it is an error; a fault, a misunderstanding, a misconception. 'Apparent' means visible; capable of being seen; easily seen; obvious; plain. A mistake which can be rectified under section 254(2) is one which is patent, which is obvious and whose discovery is not dependent on argument or elaboration. The language used in section 254(2) is permissible where it is brought to the notice of the Tribunal that there is any mistake apparent from the record. Accordingly, the amendment of an order does not mean obliteration of the order originally passed and its substitution by a new order which is not permissible under the provisions of section 254(2). Further, where an error is far from self-evident, it ceases to be an apparent error. It is no doubt true that a mistake capable of being rectified under section 254(2) is not confined to clerical or arithmetical mistakes. On the other hand, it does not cover any mistake which may be discovered by a complicated process of investigation, argument or proof. As observed by the Supreme Court in Master Construction Co. (P.) Ltd. v. State of Orissa [1966] 17 STC 360, an error which is apparent on the face of the record should be one which is not an error which depends for its discovery on elaborate arguments on questions of fact or law. A similar view was also expressed in Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tirumale AIR 1960 SC 137. It is to be noted that the language used in Order 47, Rule 1 of the Code of Civil Procedure, 1908 is different from the language used in section 254(2) of the Act. Power is given to various authorities to rectify any 'mistake apparent from the record' is undoubtedly not more than that of the High Court to entertain a writ petition on the basis of 'an error apparent on the face of the record'. Mistake is an 5 M.A. Nos Nos.110- 110-124/Mds/ 124/Mds/11 /Mds/11 ordinary word, but in taxation laws, it has a special significance. It is not an arithmetical or clerical error alone that comes within its purview. It comprehends errors which, after a judicious probe into the record from which it is supposed to emanate, are discerned. The word 'mistake' is inherently indefinite in scope, as what may be a mistake for one may not be one for another. It is mostly subjective and the dividing line in border areas is thin and indiscernible. It is something which a duly and judiciously instructed mind can find out from the record. In order to attract the power to rectify under section 254(2) it is not sufficient if there is merely a mistake in the orders sought to be rectified. The mistake to be rectified must be one apparent from the record. A decision on the debatable point of law or undisputed question of fact is not a mistake apparent from the record. The plain meaning of the word 'apparent' is that it must be something which appears to be so ex facie and it is in capable of argument or debate. It is therefore, follows that a decision on a debatable point of law or fact or failure to apply the law to a set of facts which remains to be investigated cannot be corrected by way of rectification.
6. Since, the assessees have failed to point out any mistake in the order nor the same has been noticed by this Bench and in case application of the assessee is accepted, as rightly pointed out by the ld. DR, that would amount to review of the order of the Tribunal which is not permissible under the law. Under rectification proceedings, the Tribunal is not empowered to review the order passed earlier and support can be taken from the decision of the Hon'ble Calcutta High Court in the case of CIT vs Gokul Chand Agarwal (202 ITR 14), which has dealt with the similar point 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 6 M.A. Nos Nos.110- 110-124/Mds/ 124/Mds/11 /Mds/11 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 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."
6.1 In similar situation, while dealing with the rectification, the Hon'ble Andhra Pradesh High Court in the case of CIT and Anor vs. I.T.A.T and Anor (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 by a process of investigation and research, it is not a mistake apparent from the record."
6.2 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:
7 M.A. Nos Nos.110- 110-124/Mds/ 124/Mds/11 /Mds/11 "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.
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.
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 record, although it may be an error of judgments........................"
6.3 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 8 M.A. Nos Nos.110- 110-124/Mds/ 124/Mds/11 /Mds/11 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 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."
6.4 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."
6.5 The Hon'ble Jurisdictional High Court in the case of Express Newspapers Limited v. DCIT [2010] 320 ITR 12 (Mad) has held as under:
9 M.A. Nos Nos.110-
110-124/Mds/ 124/Mds/11 /Mds/11 "A patent, manifest and self-evident error which does not require elaborate discussion of evidence or argument to establish it, can be said to be an error apparent on the face of the record and can be corrected under section 254(2) of the Income-tax Act, 1961. Section 254(2) does not confer power on the Tribunal to review its order. Under the garb of rectification of mistake, it is not possible for a party to take further chance of re-arguing the appeal already decided:
Held, that the Tribunal in its order on the appeal had allowed the claim for losses under three heads: (a) claim of loss relating to potato business; (b) claim of loss relating to the dealing in shares and securities; and (c) claim relating to scrap dealings. In respect of all the three points, the Tribunal had considered and discussed all the contentions raised and argued by both the parties elaborately and ultimately recorded its findings. A clear adjudication had been made. The Tribunal was not justified in reviewing its order."
7. 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 petitions of the assessees and dismiss the same being devoid of any merits.
7. In the result, all the Miscellaneous Petitions of the assessees are dismissed.
Order pronounced on 09.09.2011.
Sd/- Sd/- (ABRAHAM P. GEORGE) (U.B.S. BEDI) ACCOUNTANT MEMBER JUDICIAL MEMBER Vm/- Dated :. 09.09.2011. Copy To: The assessee//A.O./CIT(A)/CIT/D.R.