2025 (4) TMI 940 - AT - Income Tax

Apparent mistake regarding the PAN number of the assessee - HELD THAT - We find that there is indeed an apparent mistake in the Tribunal s order in respect of PAN of the assessee and HUF. Accordingly the error is rectified and the correct PAN of the HUF is replaced in place of incorrect PAN.

Summary

The core legal questions considered by the Tribunal in this matter are twofold: first, whether there exists an apparent mistake in the Tribunal's composite order dated 26.07.19 concerning the incorrect mention of the Permanent Account Number (PAN) for the Hindu Undivided Family (HUF) assessee, and second, whether the Tribunal had jurisdiction to adjudicate the appeals in question, specifically addressing the contention that the mandatory conditions under section 127(1) of the Income Tax Act were not complied with, rendering the assessment orders void ab initio.

Regarding the first issue, the Tribunal examined the correctness of the PAN mentioned in its earlier order for the appeals relating to the HUF and the individual assessee. The legal framework for rectification of errors in Tribunal orders is found under section 254(2) of the Income Tax Act, which permits correction of mistakes apparent from the record. The appellant contended that the PAN mentioned in the order for the HUF appeals was incorrectly recorded as AECPP8298R, which pertains to the individual assessee, whereas the correct PAN for the HUF is AADHA3623A. The Tribunal noted that the appeals concerned two distinct assessees with separate PANs and statuses-individual and HUF-and that the orders erroneously referenced the individual PAN in all cases, including those pertaining to the HUF.

The Tribunal's reasoning rested on the recognition that such a clerical error was apparent and capable of rectification under section 254(2). The respondent did not oppose the correction. Consequently, the Tribunal rectified the error by substituting the correct PAN of the HUF in the relevant appeals. This correction was applied to five appeals under the HUF status for assessment years 1995-96, 1996-97, 1997-98, 1998-99, and 1999-2000. The Tribunal thus concluded that the rectification was warranted and allowed the miscellaneous application to this extent.

On the second issue concerning jurisdiction, the appellant challenged the validity of the assessment orders on the ground that the conditions prescribed under section 127(1) of the Income Tax Act for transfer and centralization of cases were not complied with. The appellant argued that without such compliance, the orders passed were without jurisdiction and hence void ab initio. Section 127(1) mandates that the Commissioner of Income Tax may, with the approval of the Board, transfer cases for coordinated and consolidated investigation and assessment, and such approval is a mandatory precondition for jurisdiction.

The Tribunal's detailed analysis spanned multiple appeals and assessment years, with consistent reasoning across the orders. The respondent produced a copy of the order dated 15.07.1999, passed under section 127, which authorized the transfer of cases of 79 assessees/entities for consolidated investigation and assessment, including the appellant's cases. This order was made available to the appellant's representative during the proceedings. Although the appellant claimed ignorance of this order, the Tribunal found that the department had complied with the mandatory procedural requirements under section 127(1).

The Tribunal referred to its own prior orders for assessment years 1998-99 and 1999-2000, wherein it had already considered and rejected the jurisdictional challenge on these grounds. The Tribunal emphasized that the appellant's ground was devoid of merit as the statutory conditions for transfer and centralization had been fulfilled. The Tribunal consistently dismissed this ground across all relevant appeals for various assessment years, reaffirming the validity of the jurisdiction exercised by the authorities.

In addressing competing arguments, the Tribunal gave due consideration to the appellant's submission that no formal communication of the section 127 order was received, but it held that the existence and production of the order sufficed to establish compliance. The Tribunal also noted that the appellant's challenge was raised belatedly and without substantive evidence negating the departmental compliance. The respondent's reliance on the section 127 order and procedural regularity was accepted as determinative.

In conclusion, the Tribunal allowed the miscellaneous application only to the extent of rectifying the PAN error for the HUF appeals, recognizing it as a clerical mistake rectifiable under section 254(2). The jurisdictional challenge under section 127(1) was rejected as it had been previously adjudicated and found lacking in merit. The Tribunal declined to interfere with its earlier orders on this issue.

Significant holdings include the Tribunal's clear statement that "the department has complied with the mandatory conditions and procedures laid down in section 127(1) of the Act for centralising and transferring the case for the purpose of coordinated and consolidated investigation and assessment," and that "any order passed without proper jurisdiction is void ab-initio and have no legal effect" was not applicable in this case since the procedural requirements were met. The Tribunal also underscored the principle that clerical or apparent mistakes in Tribunal orders are amenable to correction under section 254(2).

The core principles established are: (1) the necessity and sufficiency of compliance with section 127(1) for jurisdiction in transferred cases, and (2) the scope of rectification powers of the Tribunal under section 254(2) to correct apparent errors such as incorrect PAN references. The final determinations affirm the correctness of the Tribunal's jurisdiction and validate its procedural compliance while allowing correction of the PAN error to ensure accuracy in the records.