TMI Blog2004 (3) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... is filed, against the order dated April 28,2003, in Miscellaneous Petition No. 204/Bang. of 2002 arising out of the order dated August 27, 2002 in W. T. A. No. 23/Bang of 1999 relating to the assessment year 1993-94 The Assistant Commissioner of Wealth-tax, Central Circle-II, Bangalore, passed an order dated September 30, 1996, under section 18(1)(c) read with sections 18(2) and 18(3) of the Act levying a penalty of Rs. 5,13,296 being 200 per cent, of the amount of wealth-tax said to have been evaded by the assessee-respondent. The appeal filed by the assessee against the imposition of such penalty was dismissed by the Commissioner of Wealth-tax (Appeals)-I, Bangalore, by order dated February 18, 1999, in Appeal No. W.T.A.25/C.II/CIT (A)-I of 1996-97. The further appeal filed by the assessee in W.T.A. No. 23/Bang of 1999 was partly allowed by the Income-tax Appellate Tribunal by order dated August 27, 2002, reducing the penalty to the minimum leviable under the Act which is equal to the amount of tax sought to be evaded. Thereafter, the assessee filed an application (M.P. No. 204/Bang of 2002) for rectification of the order dated August 27,2002, under section 35 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stricted to rectification of mistake apparent from the record. We shall first deal with the question of the power of the Tribunal to recall an order in its entirety. Recalling the entire order obviously would mean passing of a fresh order. That does not appear to be the legislative intent; the order passed by the Tribunal Under section 254(1) is the effective order so far as the appeal is concerned. Any order passed under section 254(2) either allowing the amendment or refusing to amend gets merged with the original order passed. The order as amended or remaining unamended is the effective order for all practical purposes. The same continues to be an order under section 254(1). That is the final order in the appeal. An order under section 254(2) does not have existence de hors the order under section 254(1). Recalling of an order is not permissible under section 254(2). Recalling of an order automatically necessitates rehearing and readjudication of the entire subject-matter of appeal. The dispute no longer remains restricted to any mistake sought to be rectified. Power to recall an order is prescribed in terms of rule 24 of the Income-tax (Appellate Tribunal) Rules, 1963, and that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been decided was wholly erroneous. The decisions relied on by the assessee are Blue Star Engineering Co. (Bombay) (P.) Ltd. v. CIT [1969] 73 ITR 283 (Bom); CIT v. Shakuntala Rajeshwar [1986] 160 ITR 840 (Delhi); CWT v. Smt. Illa Dalmia {1987] 168 ITR 306 (Delhi); CIT v. Ramesh Chand Modi [2001] 249 ITR 323 (Raj) and CIT v. S.S. Gupta [2002] 257 ITR 440 (Raj). In Blue Star [1969] 73 ITR 283, the Bombay High Court considered the question whether under section 154 of the Income-tax Act, 1961, rectification can go to the extent of canceling the whole order. The Bombay High Court held thus: "The power intended to be given under section 154 is to rectify an error apparent on the face of the record. Amendment of the order is the consequence of the rectification and its purpose is to give effect to the rectification. If the rectification involves an amendment, which will affect the whole of the order, it cannot be said that simply because of the use of the word 'amend', which normally may not mean the cancellation of the whole order, the Income-tax Officer should be powerless to rectify the mistake or error which is apparent on the face of the order. The word 'amend' with reference t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l order on the ground that there was no notice of hearing was correct. This decision also is not of much assistance. The appellant does not dispute that where an order is passed ex parte, and an application is filed to set aside the same, the ex parte order can be set aside. In Ramesh Chand Modi [2001] 249 ITR 323 (Raj), the Tribunal had recalled its order on the ground that it had failed to consider certain grounds urged by the assessee in its memorandum of appeal. The Rajasthan High Court held that if the mistake was on account of failure to decide an issue which was raised, the appropriate procedure is to recall the order under section 254(2) of the Income-tax Act, and hear the matter afresh. In S.S. Gupta [2002] 257 ITR 440, the Rajasthan High Court held, relying on the decision in Blue Star [1969] 73 ITR 283(Bom), that where the Tribunal concludes that there is a mistake apparent on the face of the record, the Tribunal has power to rectify its order for eliminating its mistake by recalling the order and passing a fresh order. The decisions relied on by the assessee no doubt laid down the principle that the Tribunal, while exercising the power under section 254(2) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Sub-section (5) of section 35 provides that where an amendment is made under section 35, an order shall be passed in writing by the Tribunal. The power vested in the Tribunal, by section 35, is only to amend the order, to rectify any mistake apparent from the record and not to review its order. Section 35 also clearly states that the mistake should be rectified by amending the original order. Therefore, rectification pre-supposes the continued existence of the original order. When an amendment is made to the original order, the amendment merges with the original order. The original order is read with the amendment thereto. If the power to rectify the original order by way of amendment to that order is to be interpreted as permitting recalling of the original order, then the original order ceases to exist arid a fresh original order is made. Recalling the original order involves rehearing of the matter which is not the purpose and intention of the provision for rectification. Where the wording of the statutory provision is clear and unambiguous and can be given effect without any difficulty, it is not permissible to give an extended meaning to the provision. The words "amend the o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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