2004 (11) TMI 83 - HC - Income Tax

Review by tribunal - Whether Tribunal was competent to recall its earlier order on the basis of mistakes pointed out and projected by the Tribunal in its order in the miscellaneous application u/s 254(2)? - It is well settled that in the absence of any specific power conferred by the statute or inferred by implication the Tribunal which has been constituted under the Act cannot exercise any power of review. - However if an error falls within the provisions of section 254(2) then surely the Tribunal can exercise the power conferred under the said Act and rectify its mistake. Held that the quasi-judicial authority cannot review its own order unless the power of review is expressly conferred on it by the statute under which it derives its jurisdiction. -Question is answer in negative i.e. in favour of the Revenue

Summary

Issues:
Competency of the Income-tax Appellate Tribunal to recall its earlier order based on mistakes pointed out in a miscellaneous application under section 254(2) of the Income-tax Act, 1961.

Analysis:
The case involved a question of law referred by the Income-tax Appellate Tribunal regarding the competency to recall its earlier order. The respondent had disclosed jewellery worth Rs. 73,887 in her return, supported by a confirmation from her father. The Income-tax Officer added this amount as the source of investment was not explained under section 69A. The Appellate Assistant Commissioner reversed this decision, but the Tribunal reinstated the Income-tax Officer's finding. The respondent sought rectification, stating the addition was for Rs. 7,065, not Rs. 73,887. The Tribunal allowed the application and recalled its order.

The Revenue argued that the Tribunal reviewed its order, which is impermissible. The Tribunal's finding emphasized the respondent's obligation to explain the source of the jewellery, not solely relying on family customs. The Tribunal's order indicated that the onus was on the respondent to prove the source of investment. However, the Tribunal, in recalling its order, deviated from this finding. The Court cited precedents stating that the Tribunal lacks the power to review its orders unless explicitly granted by the statute. The Tribunal's authority is limited to rectification under section 254(2) of the Act.

The Court concluded that without a specific power of review, the Tribunal cannot exercise such authority. However, under section 254(2), rectification of mistakes apparent on record is permissible. As the Tribunal's decision to recall the order was not based on a mistake falling within section 254(2), the Court ruled in favor of the Revenue. The judgment clarified that while rectification is allowed for evident errors, general review powers are not conferred on the Tribunal.