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M/s Rajasthan Liquors Pvt. Ltd., Kanpur Versus ACIT-6, Kanpur

2015 (7) TMI 947 - ITAT LUCKNOW

Rectification of mistake - indirect expenses debited to the profit and loss account by the assessee - Held that:- Assessing Officer has asked the assessee to furnish complete details and the assessee could not furnish the same. Similar was the position before the ld. CIT(A), but the ld. CIT(A) has deleted the addition having observed that the assessee was not under any obligation to maintain separate balance sheet and profit and loss account for each and every unit. While adjudicating the issue, .....

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ot proper. However, the Tribunal has restored the matter to the ld. CIT(A) for re-adjudicating the impugned issue afresh. The Tribunal has examined the facts and given a categorical finding on this issue. The findings of the Tribunal cannot be reviewed under the garb of rectification. If the assessee is aggrieved with the findings of the Tribunal on a particular issue, the remedy available to the assessee is not under section 254(2) of the Act but lies somewhere else.

The ld. counsel .....

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R SUNIL KUMAR YADAV: This Miscellaneous Application is preferred by the assessee against the order of the Tribunal dated 16.1.2015 in ITA No.453/LKW/2012 contending therein that the decision of the Tribunal is in conflict with the mandate of the Hon'ble jurisdictional High court and the Tribunal has also adjudicated the issue which were not specifically raised in the appeal of the Revenue. 2. It was contended by the ld. counsel for the assessee that the Tribunal in its order has accepted tha .....

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other hand the matter was remanded back to the ld. CIT(A) for re-adjudication of the issue. Therefore, an error is crept in the order of the Tribunal which calls for rectification. 3. The ld. D.R., on the other hand, has opposed the contentions of the ld. counsel for the assessee with the submission that the Tribunal has taken into account all the relevant facts while disposing of the appeal. The ld. counsel for the assessee has picked up few lines from the order of the Tribunal instead of read .....

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f ₹ 2,78,26,506/- debited to the profit and loss account neither before the Assessing Officer nor before the ld. CIT(A), the Tribunal has rightly set aside the issue to the ld. CIT(A) for re-adjudication of the assessee. Therefore, there is no error apparent in the order of the Tribunal. 4. Having carefully examined the order of the Tribunal vis-à-vis the Miscellaneous Application, we find that the controversy revolves around the issue of indirect expenses of ₹ 2,78,26,506/- d .....

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ven a categorical finding that the assessee is not under any obligation to prepare separate balance sheet and profit and loss account for each and every unit, but whenever the assessee was asked by the Assessing Officer to furnish the details of a particular expense debited to the profit and loss account, the assessee is under obligation to furnish the complete details. Since the assessee has not furnished complete details before the ld. CIT(A), the deletion of addition was not proper. However, .....

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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 in the grab 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 stat .....

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t be interfered with on the basis of supposed inherent rights. U/s 254(1) of the Act, the Appellate Tribunal, after hearing the contesting parties, can pass such order as it deems fit. Sec. 254(2) of the Act specifically empowers the Appellate Tribunal at any time within four years of the date of an order to amend any order passed by it u/s 254(1) of the Act with a view to rectify any mistake apparent from record either suo moto or on an application made. What can be rectified under this section .....

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reaches finality the moment the same is passed; cannot be touched thereafter. By section 254(2) of the Act, the Tribunal, however, has been authorized to rectify mistakes in its orders, which are apparent on the face of the records. The expression mistake apparent on the record means a mistake either clerical or grammatical or arithmetical or of like nature, which can be detected without there being any necessity to re-argue the matter or to re-appraise the fact as appearing from the records. In .....

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he fact cannot constitute an apparent mistake rectifiable under section 254(2). This might, at the worst, lead to perversity of the order for which the remedy available 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. 7. The Hon ble High Court of Allahabad in the case of CIT Vs. ITAT; 143 CTR 446 h .....

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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. The provisions of section 254 were also examined by the Hon ble High Court of M.P. in the case of Prakash Chand Mehta Vs. CIT; 220 ITR 277 .....

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on a debatable point of law is not a mistake apparent from record. Their Lordships have further held that if a statement of any person has been recorded without producing him in the witness box, the authorities should not act upon that statement without affording the assessee an opportunity to cross-examine the witness, but that is a matter not for rectification but it is a matter relating to the merits of the case as to whether the Tribunal has gone wrong in not considering the affidavit of a p .....

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t rectification can only be made when a glaring mistake of fact or law committed by the officer passing the order becomes apparent from record. Rectification is not possible if the question is debatable. Moreover, a point which was not examined on facts or in law cannot be dealt with as mistake apparent from record. In the case of ITO Vs. ITAT; 229 ITR 651 their Lordships of Patna High Court have also expressed a similar observation after holding that section 254(2) of the Act empowers the Tribu .....

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rmissible within the scope of section 254(2) of the Act. 9. 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 r .....

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