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TMI Blog2007 (11) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. A short question which arises for determination in this civil appeal filed by the assessee concerns application of Section 154 of the Income Tax Act, 1961 ("1961 Act") which provides for rectification of any mistake apparent from the record by any income tax authority. It may be mentioned at this stage that the words "rectification of any mistake apparent from the record" find place in section 254(2) of the said 1961 Act. Facts 3. Assessee company is engaged in the manufacture of portable generator sets in technical collaboration with Honda Motor Company, Japan. In this civil appeal, we are concerned with assessment year 1991-92. On 30.12.1991 return of income was filed by the assessee declaring nil income. During the rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n account of fluctuation. On facts, the Tribunal found that, in the present case, there was no actual payment after the fluctuation and, therefore, the assessee was not entitled to claim the benefit under section 43A. 6. On 9.12.2002, the assessee moved the Tribunal for rectification of mistake apparent from Order dated 2.4.2002. That application was made under section 254(2) which reads as under: "BEFORE THE INCOME TAX APPELLATE TRIBUNAL: DELHI BENCHES HON'BLE "A" BENCH (HON'BLE VICE PRESIDENT R.M. MEHTA & SH. HON'BLE SH. Y.K.KAPOR) IN THE MATTER OF : M/S SHRIRAM HONDA POWER EQUIPMENTS LTD. ITA NOS. : 5413 & 5414/D/96(A) 5544 & 5545/D/96(D) ASSESSMENT YEARS: 1990-91 & 1991-92 SUB: APPLICATION U/S 254(2) FOR RE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at in forming another view. The view taken by different benches of the Tribunal was not distinguished, therefore, a mistake apparent from record has crept in. The issue could not be decided without being referred to a Special Bench to reconcile the difference, if at all, between two views. Reference in this regard is invited to the decisions of Hon'ble Supreme Court in the case of Sundarjas Kanyalal Bhatija & Others vs. Collector Thane, Maharashtra & Others 183 ITR 130 (SC) and UOI vs. Paras Laminates Pvt. Ltd. 186 ITR 722 (SC). It is, therefore, submitted that the order may be rectified. 3. Disallowance under Rule 6D covered by ground Nos. 3 & 2 for assessment years 1990-91 & 1991-92 respectively were decided against for the reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... change rate fluctuation and despite the fact that the additional liability resulting from the said fluctuation had not been paid by the assessee. It was held that the word "paid" in section 43(2) meant amount actually paid or incurred according to the method of accounting. In this connection, reliance was also placed by the Tribunal on circular no. 5-P of CBDT dated 9.10.1967. 8. Vide order dated 10.9.2003 the Tribunal, in the present case, allowed the rectification application filed by the assessee stating that the judgment of the coordinate bench in Samtel Color Limited (supra) had escaped its attention. 9. Against the order dated 10.9.2003, the Department carried the matter in appeal to the High Court vide ITA No. 735 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness of the assessee and accordingly, the word "paid" in section 43(2) should be read in the light of the accounting standards. It was further held that under section 209(3) of the Companies Act, it was mandatory for companies to keep accounts on accrual basis only. 11. Suffice it to state that, in view of the said judgment of Delhi High Court in the case of Woodward Governer India (P) Ltd. (supra), the view of the co-ordinate Bench of the Tribunal on section 43A in Samtel Color Ltd. (supra) stood confirmed. We do not wish to express any opinion on the judgment of the High Court in Woodward Governor (supra) except to say that judgment of the co-ordinated Bench of the Income Tax Appellate Tribunal has been confirmed which circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s from an order attributable to the Tribunal's mistake, error or omission, then it is the duty of the Tribunal to set it right. Atonement to the wronged party by the court or Tribunal for the wrong committed by it has nothing to do with the concept of inherent power to review. In the present case, the Tribunal was justified in exercising its powers under section 254(2) when it was pointed out to the Tribunal that the judgment of the coordinate bench was placed before the Tribunal when the original order came to be passed but it had committed a mistake in not considering the material which was already on record. The Tribunal has acknowledged its mistake, it has accordingly rectified its order. In our view, the High Court was not justified in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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