TMI Blog2015 (3) TMI 749X X X X Extracts X X X X X X X X Extracts X X X X ..... been done by the assessee against JSJAI. Even till final hearing of the appeal before the Tribunal, the ld. counsel for the assessee could not place any evidence on record as to how and when he has recovered the outstanding debit balance of ₹ 17,98,142.70 from JSJAI nor did he claim it to be as bad debt if he failed to recover it for any reason. All these facts support the case of the Revenue that the assessee has made purchases as declared in the books of JSJAI out of its books of account and made sale thereof and earned profit. Since the assessee has been showing debit balance in the name of JSJAI in its books of account and no purchase was shown in its account, the purchases made by it as per statement of JSJAI is outside the books of account, in which the investment made is to be considered as unexplained investment for which addition is called for. Since the Tribunal has examined all the facts in the light of the orders of the lower authorities and the rival submissions and adjudicated the issue after taking into account all minor details and the assessee sought re-appreciation of facts through its Miscellaneous Application, which is not permissible under the law, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore on non-consideration of the factual and legal arguments of the ld. counsel for the assessee while adjudicating the appeal by the Tribunal, an error has crept in the order, which calls for rectification by recalling the order of the Tribunal. 3. The ld. D.R., on the other hand, has submitted that the arguments raised by the ld. counsel for the assessee was taken into account by the Tribunal while adjudicating the appeal. The Tribunal has recorded complete facts borne out from the orders of the lower authorities and after taking into account the rival submissions of the parties, the Tribunal has adjudicated the issue and finally concluded that the ld. CIT(A) has properly examined the issue in the light of the given facts and since no infirmity was found in the order of the ld. CIT(A), the Tribunal confirmed the same. 4. Having carefully examined the order of the Tribunal vis- -vis the Miscellaneous Application in the light of the rival submissions, we find that the issue in dispute was with regard to the debit balance of ₹ 17,98,142.70 as on 31.3.2003 receivable from M/s Jain Agro Industries Pvt. Ltd (JSJAI). In order to verify the correctness of the details, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der to verify the correctness of the details submitted by the assessee, the Assessing Officer asked JSJAI to furnish copy of account and in response thereto JSJAI has furnished copy of accounts which is reproduced as under:- Document date Document Number Narration Debit Credit Running balance QST Ltd., Kanpur Opening Balance 17,98,142.70 Cr. 02 May 2002 SAL 020520025 To invoice No.102 3,95,181 14,02,001.70 Cr. 07 May 2002 SAL 07052002 3 To invoice No.113 4,20,811 9,82,150.70 Cr. 02 May 2002 SAL 12052002 7 To Invoice No.119 4,18,828 5,63,322.70 Cr. 14 May 2002 SAL 14052002 2 To Invoice No.125 2,85,884 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and also requested the Assessing Officer to summon the responsible Director of JSJAI for cross-examination, but the assessee was not allowed an opportunity to cross-examine the responsible Director of JSJAI. Therefore, the addition made by the Assessing Officer was not sustainable. 7. The ld. CIT(A) re-examined the entire issue but was not convinced with the explanations furnished by the assessee as he was of the view that in its books of account the assessee himself has shown debit balance of ₹ 17,98,142.70 in the name of JSJAI as on 31.3.2002. But till conclusion of the appeal before the ld. CIT(A), no evidence was placed with regard to the recovery of the said amount if the assessee has not made purchase from JSJAI in order to square up the account. The relevant observations of the ld. CIT(A) in this regard are extracted hereunder:- I have gone through the contention of A.O. reply filed by the assessee. From the above, following facts emerge. 1. The assessee claims that he had made no purchase from M/s J.S. Jain Agro that the amount was due from them they have wrongly reversed the entry by showing sale to them. 2. Assessee has pointed several discrepan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2002-03 relevant to the assessment year 2003-04 to JSJAI. 9. The ld. counsel for the assessee has further contended that since the Assessing Officer has made an addition on the basis of the statement and the documents prepared by a third party without affording proper opportunity to cross-examine the third party, the addition made on the basis of that evidence is not sustainable in the eyes of law. It was also contended that the sales declared by the assessee were accepted in the VAT assessments. It was also contended that no sales were made to the assessee as shown by JSJAI in its statement during the period 2.5.2002 to 15.5.2002. 10. The ld. D.R., on the other hand, has contended, beside placing heavy reliance upon the order of the ld. CIT(A), that the assessee himself has furnished the details of amount/balance as on 31.3.2003 receivable from the debtors and payable to the creditors and in the details he has shown debit balance of ₹ 17,98,142.70 receivable from JSJAI. If the assessee has not purchased alleged goods from JSJAI, the onus is upon the assessee to establish as to how and when it has recovered the outstanding amount from JSJAI as shown in the details furni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of goods and the details of transport by which the goods have been transported, vide letter dated 20.1.2006. In response thereto JSJAI has furnished the details of invoices along with transport receipts of M/s Deep Goods Carrier, Railway Road, Shamli in order to prove the sales declared in its statement vide letter dated 24.2.2006. All these facts collected by the Assessing Officer from JSJAI were confronted to the assessee vide letter dated 28.2.2003 and a show cause notice was also issued to it. Instead of furnishing any confirmation from JSJAI, the assessee has filed an affidavit along with letter contending therein that they have not made any purchase from JSJAI. Through this letter the assessee has also requested the Assessing Officer to allow cross-examination of the responsible Director of JSJAI. Since the assessment was going to be time barred, the Assessing Officer completed the assessment vide order dated 17.3.2006. 12. Though the assessee has filed an appeal before the ld. CIT(A), but did not file any confirmation from JSJAI with regard to the debit balance shown in its books of account as on 31.3.2003. The ld. CIT(A) has taken note of the fact that according to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder these facts and circumstances of the case, we are of the view that the ld. CIT(A) has properly examined this issue in the light of the given facts and we find no infirmity therein. Accordingly we confirm the same. 14. The scope of provisions of section 254(2) of the Act is limited and only those errors which are apparent from the record can only be rectified. 15. The scope of provisions of section 254(2) of the Act has been repeatedly examined by the Hon'ble Apex Court and various High Courts and it was held that the Tribunal can rectify only those mistakes which are arithmetical or clerical or apparent in its order. The Tribunal has no jurisdiction to review its own order under the garb of rectification. It was also held that if the Tribunal commits an error of judgement, that error cannot be rectified under the provisions of section 254(2) of the Act as the Tribunal is not empowered by the statute to review its own order. In the case of CIT Vs. Vardhman Spinning; 226 ITR 296 their Lordships of the Punjab and Haryana High Court have held in specific terms that the Appellate Tribunal is creation of statutes and it can exercise only those powers which have been conf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to the assessee is not under section 254(2) but a reference proceedings u/s 256. The normal rule is that the remedy by way of review is a creature of the statute and unless clothed with such power by the statute, no authority can exercise the power. 17. The Hon ble High Court of Allahabad in the case of CIT Vs. ITAT; 143 CTR 446 has held that sub-section (1) of section 254 confers ample powers on the Tribunal to pass such orders in any appeal filed before it as it thinks fit. Sub-section (2) of section 254 postulates that the Tribunal may amend any order passed by it under sub-sec. (1) of section 254 with a view to rectifying any mistake apparent from the record. The power of the Tribunal conferred by sub-section (2) of section 254 for rectifying any mistake apparent from the record cannot be exercised by the Tribunal to recall any order passed by it under section 254(2). Further, reviewing and recalling an order is one thing and rectifying a mistake in the order which is apparent from the record is quite another. In the absence of any statutory provision for review by Tribunal, the order passed by the Tribunal cannot be recalled or reviewed under section 254(2) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to an amendment of an earlier order with a view to rectify a mistake apparent from record, but it would be an order passed on reappraisal of the material facts and circumstances and on a fresh application of the legal position which is not permissible within the scope of section 254(2) of the Act. 19. In the case of Ms. Deeksha Suri Vs. ITAT; 232 ITR 395 their Lordships of Delhi High Court have held in specific terms that the Incometax Appellate Tribunal is a creature of the statute. It has not been vested with the review jurisdiction by the statute creating it. The Tribunal does not have any power to review its own judgements or orders. The grounds on which the courts may open or vacate their judgements are generally matters which render the judgement void or which are specified in the statutes authorizing such sections. The language of section 254(2) of the Income-tax Act, 1961 is clear. The foundation for the exercising the jurisdiction is with a view to rectify any mistake apparent on the record and the object is achieved by amending any order passed by it . A mistake apparent on the record must be an obvious and patent mistake and not something which can be establishe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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