2011 (7) TMI 585 - AT - Income Tax

Petition for review of order - denial of approval u/s 80G(5) - assessee contended that Tribunal is bound to decide the fundamental issue in the light of the Supreme Court decisions cited - Omission to follow the Supreme Court decisions is a mistake apparent from the record and if the same is not treated as a mistake it would amount to contempt of court - Held that - There is no express power of review conferred on this Tribunal. Recalling the entire order obviously would mean passing of a fresh order. That does not appear to be the legislative intent. Further Tribunal after taking note of the case-law relied upon by the assessee gave reasoning why it was not relevant to consider the same. The averment of the assessee is that the decision of the Apex Court has not been applied by the Tribunal while coming to the conclusion in Tribunal order is not a mistake apparent on record falling within the scope of section 254(2). Tribunal considered the entire facts and circumstances of the case and decided the issue. Being so now we cannot review the same on the basis of fresh arguments advanced by assessee - Petition dismissed.

Summary

Issues Involved:
1. Rectification/Review of Tribunal Order under Section 254(2).
2. Binding Nature of Supreme Court Judgments.
3. Applicability of Supreme Court Decisions in Specific Cases.
4. Powers and Scope of the Tribunal under Section 254(2).

Issue-wise Detailed Analysis:

1. Rectification/Review of Tribunal Order under Section 254(2):
The assessee filed a second Miscellaneous Application seeking rectification/review of the Tribunal's order dated 23rd July 2010, which arose out of an earlier order dated 26th March 2010. The Tribunal emphasized that it had already dismissed the first Miscellaneous Application, finding no apparent mistake on the record. The Tribunal underscored that it cannot entertain a second application on the same set of facts, citing the Allahabad High Court judgment in CIT v. Chemical & Allied Products [2008] 296 ITR 297/[2007] 161 Taxman 16. The Tribunal reiterated that statutory authorities do not have the power to review unless expressly conferred and that the scope of review does not extend to rehearing the case on merit, as held in CIT v. Pearl Woollen Mills [2011] 330 ITR 164/[2010] 191 Taxman 286 (P&H).

2. Binding Nature of Supreme Court Judgments:
The assessee argued that the Tribunal failed to consider the binding nature of Supreme Court judgments in Surat City Gymkhana [2008] 300 ITR 214 and Radhasoami Satsang [1992] 193 ITR 321. The Tribunal acknowledged the binding nature of Supreme Court judgments under Article 141 of the Constitution of India but clarified that the cited cases were not applicable to the facts of the present case. The Tribunal noted that the decision in Radhasoami Satsang was confined to the specific facts of that case and not meant for general application. Similarly, the Tribunal found that the ratio in Surat City Gymkhana, which dealt with registration under Section 12A, did not apply to the present case where the order was passed by the DIT (Exemptions) himself.

3. Applicability of Supreme Court Decisions in Specific Cases:
The Tribunal noted that the Supreme Court in Radhasoami Satsang explicitly mentioned that the decision was confined to the facts of that case. In Surat City Gymkhana, the Supreme Court's decision was based on the finality of the High Court's decision in Hiralal Bhagwati, which was not challenged by the Department. The Tribunal emphasized that these cases did not set a binding precedent for the current case, where the facts and circumstances differed significantly.

4. Powers and Scope of the Tribunal under Section 254(2):
The Tribunal detailed the limited scope of Section 254(2), which is restricted to rectifying mistakes apparent from the record. The Tribunal cannot recall an entire order or rehear the case on merits, as this would amount to a review, which is not permissible under the IT Act. The Tribunal cited various judgments, including CIT v. Hindustan Coca Cola Beverages (P.) Ltd. [2007] 293 ITR 163/159 Taxman 127 (Delhi), to support its position. The Tribunal highlighted that rectification under Section 254(2) is not equivalent to a power to review or recall the order. The Tribunal also explained that non-consideration of precedent by the Tribunal causes prejudice to the assessee, but this does not extend to rehearing the case on merits.

Conclusion:
The Tribunal concluded that it had considered all arguments and case laws cited by the assessee in its original order and provided reasons for not entertaining the claim. The Tribunal emphasized that any error of judgment could be addressed through other legal remedies available to the assessee. Consequently, the Tribunal dismissed the Miscellaneous Application filed by the assessee.