TMI Blog2018 (10) TMI 795X X X X Extracts X X X X X X X X Extracts X X X X ..... vested u/s 254 of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short]. The provisions of section 254(2) cannot be exercised to re-argue the matter afresh on different grounds or reasoning. Even the Hon’ble jurisdictional High Court in the case of CIT vs. McDowell & Co. Ltd., [2004 (3) TMI 41 - KARNATAKA HIGH COURT] held that the power u/s 254(2) of the Income-tax Act,1961 is only to amend the order to rectify any mistake apparent from record and the original should not be recalled for re-hearing the matter. Since in the present petitions, the assessee-company could not point out any mistakes which are capable of being rectified, the miscellaneous petitions cannot be entertained. Thus, in the light of the above legal position, the Miscellaneous Petitions are rejected. - Misc. Petn. Nos.279 & 280/Bang/2018 And ITA Nos.422 & 423/Bang/2018) - - - Dated:- 10-10-2018 - SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER For The Petitioner : Shri S.Venkatram, Sr. Advocate. For The Respondent : Shri C.H.Sundar Rao, CIT ORDER Per INTURI RAMA RAO, AM : These Misc. Petitions are filed by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade was not based on the historical data or previous experience, inasmuch as, the chart shows that the percentage of provision for warranty varied from 2.16 to 9.89% which clearly shows that provision made is not based on the historical data. We further note that the averments in the Misc. Petitions that the Tribunal had failed to adjudicate ground relating to restriction of provision for warranty to the extent of 2.14% of sales is also incorrect. Such ground was disposed of by this Tribunal vide para.14 of impugned order holding as under: 14. In the light of above factual situation, we are of the considered opinion that the assessee derived advantage by deferring its income to the extent of excess warranty provision to subsequent years. Therefore, such excess provision cannot be allowed as a deduction. Therefore, in our considered opinion, the provision made for warranty cannot be said to be reliable. The AO, as confirmed by the ld.CIT(A) had rightly restricted the amount of allowable provision for warranty at the rate of 2.14% of sales. Therefore, we do not find any fallacy in the reasoning of the order of the ld.CIT(A). Accordingly, the grounds of appeal of the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of review under order 47 r. 1 of CPC do not hold good in the cases of ss. 254(2) and 154 of the Act. Sec. 254(2) does not confer power on the Tribunal to review its earlier order. Under the garb of rectification of mistake it is not possible for a party to take further chance of re-arguing the appeal already decided. What can be rectified under s. 254(2) is a mistake which is apparent and patent. The mistake has to be such for which no elaborate reasons or enquiry is necessary. Where two opinions are possible then it cannot be said to be a mistake apparent on the record. When prejudice resulting from an order is attributable to the Tribunal s mistake, error or omission, it is its bounden duty to set it right. The purpose behind the enactment of s. 254(2) of the Act to amend any order passed under sub-s. (1), if any mistake apparent from the records is brought to the notice of the Tribunal, is based on the fundamental principle that no party appearing before the Tribunal, be it an assessee or the Department, should suffer on account of any mistake committed by the Tribunal. This fundamental principle has nothing to do with the inherent power of the Tribunal. If prejudice is resul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is clear that the Tribunal s power under s. 254(2) is not to review its earlier order but only to amend it with a view to rectify any mistake apparent from the record. What can be termed as mistake apparent ? . Mistake in general means to take or understand wrongly or inaccurately; to make an error in interpreting; it is an error; a fault, a misunderstanding, a misconception. Mistake in taxation laws has a special significance. It is mostly subjective and the dividing line is thin and indiscernible. Apparent means visible, capable of being seen, easily seen, obvious plain, open to view, evident, appears, appearing as real and true, conspicuous, manifest, seeming. The plain meaning of the word apparent is that it must be something which appears to be ex facie and incapable of argument and debate. If such a mistake apparent on the face of record is brought to the notice, s. 254(2) empowers the Tribunal to amend the order passed under s. 254(1). Amendment of an order does not mean obliteration of the order originally passed and its substitution by a new order. What is mistake apparent on the face of the record or where does a mistake cease to be mere mistake, and become mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h order. The purpose can be achieved by continuing the original order and passing an amendment order stating whatever is necessary to rectify the mistake apparent from the record. Whether the issue involved is one or more makes no difference, as what is contemplated and provided for is an amendment to the original order and not an order in substitution of the original order. 4.3 We further note that the Hon ble Madras High Court in the case of CIT vs. Forbes Campbell Finance Ltd. (2013) 352 ITR 602(Mad) also held that unless three conditions recognizing the liability as pointed out by the Hon ble Apex Court in the case of CIT vs. Rotork Controls India (P.) Ltd. (314 ITR 62)(SC) are satisfied the claim for warranty expenditure cannot be allowed automatically. The same position was again reiterated by the Hon ble Madras High Court in the case of Laser Soft Infosystems Ltd. vs. ITO (2018) 98 taxmann.com 51)(Mad.) wherein the plea for restoration of the matter to the AO was also rejected by holding as under: 11. Learned counsel for the Assessee produced an additional typed set of papers, which contained a note on provision for warranty, terms and conditions and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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