TMI Blog2009 (10) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... arned CIT(A) accepted the appeal of the assessee in part. Cross appeals filed by both the sides in ITSS(A) Nos. 78 and 614/ Mum./2003 before the tribunal were heard by the Bench. The appeal filed by the revenue was dismissed. Out of three grounds raised by the assessee, ground Nos. 1 and 2 were allowed. However the 3rd ground assailing the sustenance of addition of Rs. 11 lakhs came to be dismissed by the Tribunal. 3. At this juncture it will be relevant to note the facts leading to the sustenance of addition of Rs. 11 lakhs. During the course of search, one page marked as No. 18 of Annexure A-1 containing notings of working of money available and expenses incurred, was found and seized from the residence of the assessee. The said paper was claimed by the assessee to be a proposed planner and not the actual incurring of expenses mentioned on it. The Assessing Officer did not accept the assessee s contention for the reasons set out in the assessment order as reproduced by the ld. AM in his separate instant order. The Assessing Officer made addition of Rs. 11 lakhs by treating it as income from undisclosed sources. No relief was allowed by the learned CIT(A) as well who reproduce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the residence of the assessee is in the hand writing of the assessee. The presumption under section 132(4) of the Income-tax Act about the contents of the seized documents stand established in the absence of the assessee proving otherwise with necessary evidence. During the course of search, cash of exact Rs. 2.00 Lakhs being the balance as per the said document was found, which further proves the case of the revenue. The withdrawals made by the family members of the assessee including assessee are only sufficient to meet the household expenses and there is no question of any savings from the same. 15. The assessee claims that the copy of the said seized document was not made available to him. But even the perusal of the explanation by way of attachments under section 154 does not hold the case of the assessee. The facts in the case of CIT v. Murugesh Jaykrishna ( 245 ITR 638 ) (Guj.) are different to the extent that a reasonable explanation was offered by the assessee in that case explaining the entries on the paper. In the facts of the present case, no satisfactory explanation has been filed by the assessee regarding the notings on account of denominations of notes av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own order which is apparent from the record. This is merely a power of amending its order. The power of rectification under section 254(2) can be exercised only when the mistake which is sought to be rectified is an obvious and patent mistake which is apparent from the record and not a mistake which requires to be established by arguments and a long drawn process of reasoning on points on which there may conceivably be two opinions. 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 Tribunal cannot, in the exercise of its power of rectification, look into some other circumstances which would support or not support its conclusion." 4. The power conferred under section 254(2) of the Income-tax Act does not contemplate a rehearing and rearguing the matter. The provisions of section 254(2) of the Act are limited to only obvious, clear and self evident errors and the Tribunal has no power to recall its previous order in order to rewrite the said orders. The mistake has to be such for which no elaborate arguments or reasons are required. In the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neous application except reference to page No. 75K to 75N in para 7.2 as against the earlier page numbers as 73 to 75N in para 7.2 itself. Here again the only grievance of the assessee is against the sustenance of the addition of Rs. 11.00 lakhs, which has been divided into two broad heads, viz., ( a ) the conclusion is based on erroneous facts and/or on misappreciation of the facts on record; and ( b ) vital issues/grounds and legal contentions which go to the root of the very addition are remained to be dealt with and/or considered. After the reproduction of first 8 paras, which constituted the whole of the first miscellaneous application, the assessee has also placed reliance on certain judgments. 7. The ld. JM, relying on the judgment of the Hon ble Supreme Court in the case of Asstt. CIT v. Saurashtra Kutch Stock Exchange Ltd. [2008] 173 Taxman 322 and the judgment of the Hon ble Bombay High Court in the case of CIT v. Ramesh Electric Trading Co. [1993] 203 ITR 497 recalled the order on ground No. 3 in the light of the judgment rendered by the Hon ble Supreme Court in the case of P.R. Metrani v. CIT [2006] 287 ITR 209 on merits. In her opinion non-consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Tribunal may, at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the Assessing Officer. On going through the prescription of sub-section (2) it clearly emerges that the Tribunal is empowered to rectify the mistake which is apparent from record. Now the question arises that what is mistake apparent from record. The mistake, as envisaged under this sub-section, may be factual or legal or both. However it is not any mistake which can be rectified within the ambit of this section. There are two essential ingredients. Firstly there should be mistake and secondly such mistake must be apparent from record. If it is only a mistake, which is not apparent from record, that goes outside the purview of this sub-section. It is evident that the scope of sub-section (2) is restricted to rectifying any mistake in the order which is apparent from record and does not extend to reviewing of the earlier order. 10. The crucial expression mistake apparent from the record came up f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case cannot be said to be covered by an error apparent on the face of the record." 11. A survey of the afore-noted three judgments of the Hon ble Apex Court makes it manifest that the scope of proceedings under section 254(2) is confined to rectifying any mistake which is apparent on the very face of it. If the point needs to be proved on the strength of different facets of reasoning, the same would become debatable. Once a particular point falls in the realm of "debatable issue" that automatically goes out of the domain of sub-section (2) of section 254. Thus the error, capable of rectification under this sub-section, must be one which is apparent on the face of order itself. Further if two views are possible on a particular point and the Tribunal has preferred one view over the other, no rectification application lies for impressing upon the Tribunal to choose the other possible view in preference over the one already adopted by it. If however the order passed by the Tribunal is not in conformity with the judgment of the Hon ble Supreme Court or that of the jurisdictional High Court rendered prior to or subsequent to the impugned order, the same constitutes a mistake from rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct is not an error of judgment but a mistake which is apparent from the record itself. No such mistake was apparent from the record. In fact, we doubt if this sort of an exercise could have been done by the Tribunal even if it had the power of review. The Tribunal has, patently, far exceeded its jurisdiction under section 254(2) of the Income-tax Act in redeciding the entire dispute which was before it in this fashion, and the Tribunal has committed a gross and inexplicable error for reasons which we fail to understand." 13. From the above pronouncement of law by the Hon ble jurisdictional High Court, which is binding on all the authorities under its jurisdiction, it is more than evident that the Tribunal has got the power of rectifying a mistake which is apparent from the record itself and even an error of judgment is outside the ambit of section 254(2) of the Act. The oft-quoted judgment of the Hon ble Rajasthan High court in CIT v. Ramesh Chand Modi [2001] 249 ITR 323 distinguishing the judgment of the Hon ble jurisdictional High Court in the case of Ramesh Electric Trading Co. ( supra ) needs to be examined. In this later case the Tribunal omitted to decide some of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the scope of the section." 14. We need to examine the facts of the instant case, in the face of the aforenoted judgment of the Hon ble Supreme Court and those of the Hon ble High Courts, as discussed above, to find out if any mistake can be traced in the original order passed under section 254(1). Adverting to the facts, it is noticed that the addition of Rs. 11 lakhs was made by the Assessing Officer on the basis of Page No. 18 of Annexure A-1, seized during the course of search. This page contained the detail of denominations of Currency Notes i.e., Rs. 500 Notes, Rs. 100 Notes (bank seal) and Rs. 100 Notes. Thereafter details have been given for incurring of certain expenses with the relevant dates such as Grill terrace, Adv wonder kitchen, Papoo for August, Wander kitchen extra, Stamp duty, NSCI bill etc., etc., with exactitude. Stage by stage certain expenses have been totalled with a remark "spent". The assessee claimed that the expenses mentioned on this page were a planner of expenditure to be incurred in future and not actual spending. All the authorities starting from Assessing Officer to CIT(A) and then Tribunal gave a concurrent finding, on the appreciation of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n was rejected by the Tribunal after taking into consideration all the relevant material, there was no occasion to have moved a second application for rectification. It was noticed that there was no change of the facts except that the incumbent who decided the matter changed. This approach on the part of the Tribunal was held to be "absolutely erroneous". The observations of the Tribunal that certain documents were not considered by it in the original order or in the order of the first rectification order were found to be importunate by the Hon ble High Court. Thus the order passed by the Tribunal on the second miscellaneous application was set aside. Similarly the Hon ble Allahabad High Court in CIT v. Kamal Bhai Ismilji [2007] 288 ITR 297 held that the Tribunal having rejected the miscellaneous application was not justified in entertaining the second application on the same set off facts and recalling its original order. The same was held to be review, a power not possessed by the Tribunal. In still another later judgment in CIT v. Chemical Allied Products [2008] 296 ITR 297 (All.). Their Lordships of the Hon ble Allahabad High Court disproved the view taken by the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risdictional High Court render a judgment after the passing of the order, the same has to be strictly followed. Interpretation of a statutory provision by the Hon ble Supreme Court is always understood from the inception of the provision and it is never considered as a prospective ruling unless so specified. 17. Now the case of the learned A.R. is that the judgment in the case of P.R. Metrani ( supra ) has rendered the original order passed by the Tribunal as erroneous requiring rectification on the score that it is not in consonance with the view expressed by the Hon ble Supreme court. A dip into the facts of the case before the Hon ble Supreme Court reveals that a search was conducted on the business as well as residential premises. Statement of one Shri J.J. Bakale was recorded at the time of search and Shri P.R. Metrani was away to Rajasthan on a business tour. He was examined after his return to Hubli. He denied the possession of certain documents on the basis of which the addition was made. He also denied that these papers contain any writing made by him. The Assessing Authority made a summary adjudication order under section 132(5). Thereafter assessment was completed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this page with assurance that such clarification will be furnished in due course. There is nothing on record to suggest, even remotely, that the assessee furnished any further clarification except for raising the contention that the entries mentioned on this page were planner and not the amounts actually spent. A casual look on this page clearly demonstrates that the same did not contain any planner but the actual transactions. The mentioning of the denominations of Notes into those of Rs. 500 and Rs. 100 and the further classification of Notes of Rs. 100 into sealed and others, leaves nothing to doubt that it referred to actual amount and not some arbitrary figure. Further the mentioning of expenditure incurred on certain items on day to day basis with the spending of the amount on regular intervals jettisons the contention of the assessee that it was only a planner. 18. There is a marked difference between raising any presumption as per section 132(4A) and appreciation of evidence found at the time of search. The presumption under sub-section (4A), in the present context, can be only of three kinds viz., ( i ) the document i.e., Page No. 18 of Annexure A-I belongs to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities below and the Tribunal in its original order did not go by mere presumption about the contents of Page No. 18 of Annexure A-I. There is no question of any presumption about this document. Even if the provisions of section 132(4A) are excluded from consideration, it is not possible to hold that the Tribunal has not taken a possible view on the sustenance of the addition. This issue has been discussed at length by the tribunal in the order under section 254(1) and first order under section 254(2). The decision so rendered by the Tribunal in the present circumstances of the case cannot be called in question. Here is a case in which the assessee has filed one miscellaneous application after another praying for the recalling of the order on ground No. 3 with a plea that he will explain his case in the fresh proceedings under section 254(1), without actually furnishing any explanation about page No. 18 either in such miscellaneous applications or in the oral submissions made before me. In my considered opinion the afore-noted judgment of the Hon ble Supreme Court in P.R. Metrani s case ( supra ) is not applicable to the facts of the instant case and there is no mistake, muc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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