2020 (3) TMI 1188 - AT - Income Tax

Rectification u/s mistake u/s 254 - apparent mistake in the order of Tribunal warranting rectification - as held by the Tribunal that the Assessing Officer is not entitled to reopen the assessment on the basis of opinion of the DVO and the AO had no authority to reopen the assessment u/s.147/148 of the Act and consequently the assessment order passed u/s.143(3) r.w.s147 do not stand - HELD THAT - There are series of decisions by the Hon ble Supreme Court as well as Hon ble High Court expounding scope of exercising powers under section 254(2) - core of all these authoritative pronouncements is that power for rectification under section 254(2) of the Act can be exercised only when mistake which is sought to be rectified is an obvious and patent mistake which is apparent from the record and not a mistake which is required to be established by arguments and long drawn process of reasoning on points on which there may conceivably be two opinions. We make reference to the decision of the Hon ble jurisdictional High Court in the case of ACIT Vs. Saurashtra Kutch Stock Exchange Ld. 2003 (3) TMI 70 - GUJARAT HIGH COURT which has been upheld by the Hon ble Supreme Court 2008 (9) TMI 11 - SUPREME COURT - scope of section 254(2) is limited to rectification of mistake apparent from record itself and not rectification in error of judgment In view of the above and as per the Miscellaneous Application filed before us we do not find any mistake much less any apparent mistake that warrants rectification in the order of Tribunal 2019 (3) TMI 1752 - ITAT PUNE The Tribunal in its own wisdom has relied on the decision of the Hon ble Supreme Court in the case of ACIT Vs. Dhariya Construction Company 2010 (2) TMI 612 - SC ORDER and adjudicated the appeal of the assessee - Miscellaneous Application filed by Revenue is dismissed

Summary

Issues:
Recalling of Tribunal's own consolidated order under section 254(2) of the Income Tax Act, 1961.

Analysis:

1. Issue of Recalling Order: The Revenue filed a Miscellaneous Application seeking the recalling of the Tribunal's consolidated order in ITA Nos.730 to 733/PUN/2016 dated 11.03.2019. The Revenue argued that the Assessing Officer was not entitled to reopen the assessment based on the opinion of the DVO, and thus, the assessment order passed under section 143(3) r.w.s147 of the Act was deemed invalid. The Revenue specifically focused on the case for AY 2011-12, stating that it was not reopened under sections 147/148 of the Act but was selected for scrutiny under compulsory norms due to substantial additions in earlier assessments. The Revenue sought to recall the Tribunal's order in ITA No.733/PUN/2016 dated 11.03.2019.

2. Opposition by Assessee: The Assessee strongly opposed the Miscellaneous Application, asserting that the Tribunal's order was well-reasoned and did not require any review or rectification. The Assessee argued that the Revenue failed to identify any apparent mistake in the order necessitating rectification. The Assessee contended that the Revenue's attempt to review the entire order under the guise of rectification exceeded the scope of Section 254(2) of the Act.

3. Judicial Interpretation: The Tribunal, after examining the case records and considering the arguments from both sides, based its decision on the precedent set by the Supreme Court in the case of ACIT Vs. Dhariya Construction Company. The Tribunal held that the Assessing Officer lacked the authority to reopen the assessment solely based on the DVO's opinion. Additionally, the Tribunal referred to various decisions by the Supreme Court and High Courts emphasizing the limited scope of rectification under section 254(2) of the Act. The Tribunal highlighted that rectification could only be made for apparent mistakes evident from the record, not for errors of judgment.

4. Decision: The Tribunal dismissed the Revenue's Miscellaneous Application, stating that no mistake, especially no apparent mistake, was found in the order dated 11.03.2019. The Tribunal justified its reliance on the Supreme Court's decision in ACIT Vs. Dhariya Construction Company and concluded that the order was correctly adjudicated based on established legal principles. The Tribunal emphasized that the Revenue's attempt to seek a review under the guise of rectification was beyond the purview of Section 254(2) of the Act.

5. Final Ruling: The Tribunal, after thorough consideration, dismissed the Miscellaneous Application filed by the Revenue, deeming it devoid of merit. The order was pronounced on the 2nd day of March, 2020, upholding the Tribunal's original decision and denying the request for recalling the consolidated order.

This detailed analysis encapsulates the key issues raised in the legal judgment and the comprehensive reasoning provided by the Tribunal in arriving at its final decision.