TMI Blog1997 (1) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... cating his order dated June 21, 1973, as invalid ? " The respondent-assessee is a limited company carrying on business in the manufacture of cotton staple yarn. The assessment for the year 1967-68, relevant to the accounting period ending December 31, 1966, was completed by the Income-tax Officer on March 17, 1972. At that time, the Income-tax Officer did not allow the assessee's claim under section 84 (now equivalent to section 80J) of the Act for want of certain details and verification. Later on, the assessee moved an application under section 154 of the Act along with charts of depreciation, development rebate and calculations under section 84/80J of the Act. The Income-tax Officer considered the claim of the assessee and passed an order under section 154 of the Act on March 30, 1972. While allowing the claim of the assessee under section 84 of the Act, the Income-tax Officer computed the capital employed by the assessee in the industrial undertaking at Rs. 59,82,176 and on this amount, relief under section 84 of the Act was worked out at Rs. 3,58,930. In working out the capital employed by the assessee, the Income-tax Officer did not deduct a sum of Rs. 18,43,287, being the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal for rectification of its order on the ground that it failed to deal with the following ground taken by the assessee in its appeal : " That the learned Income-tax Officer and learned Appellate Assistant Commissioner of Income-tax have misconstrued and misapplied the provisions of section 84 of the Income-tax Act, 1961, and rule 19(3) of the Income-tax Rules for purposes of computation of capital employed in industrial undertaking. " The Tribunal, vide its order dated January 10, 1978, passed under section 254(2) of the Act accepted the miscellaneous application of the assessee and relying upon a decision of the Calcutta High Court in Century Enka Ltd. v. ITO [1977] 107 ITR 909, held that the question whether the amount of secured loans obtained by the assessee from the Punjab Financial Corporation, Chandigarh, was deductible or not while computing the capital employed as per the provisions of rule 19 of the Income-tax Rules, is a debatable issue and, therefore, the provisions of section 154 of the Act were not applicable to the facts of the present case and the successor Income-tax Officer who had passed the order dated June 21, 1973, had no jurisdiction to act under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Income-tax Rules, 1962, is a debatable issue and hence, the provisions of section 154 are not applicable to the facts of the present case and the assessee's counsel had relied on T. S. Balaram, ITO v. Volkart Bros. [1971] 82 ITR 50 (SC). In view of this, we are inclined to accept the assessee's submission that there is a mistake in the Tribunal's order as pointed out which requires to be rectified under section 254(2) of the Income-tax Act by us. There was clearly a debatable issue involved and the successor Income-tax Officer who passed the order dated June 21, 1973, had no jurisdiction to act under section 154 there being no mistake apparent from record as per the ratio of the Supreme Court decision in T. S. Balaram, ITO v. Volkart Bros. [1971] 82 ITR 50. As we find there is a mistake in the order of the Tribunal which we are bound to rectify, this is not a case of review of the Tribunal's earlier order by us. Accordingly, we accept the assessee's contention without going into the merits of the issue and hold that there was no mistake apparent from the record which could be rectified under section 154 and the order of the Income-tax Officer under section 154 dated June 21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1961, to correct ' any mistake apparent from the record ' is undoubtedly not more than that of the High Court to entertain a writ petition on the basis of an ' error apparent on the face of the record '. In the present case, the Tribunal after noticing the relevant provisions of the Act and the Rules formed an opinion that the loans obtained by the assessee from the Punjab Financial Corporation against the mortgage of six assets of the company were " borrowed money and debt due " and, therefore, liable to be deducted for the purposes of computing the capital employed in the undertaking under section 84 of the Act. The point raised by the assessee was considered and the Tribunal arrived at its conclusions. The assessee sought to reargue the same point by saying that the Income-tax Officer and the Appellate Assistant Commissioner have misinterpreted and misapplied the provisions of section 84 of the Act and rule 19(3) of the Rules for the purposes of computation of the capital employed in the undertaking. The Tribunal, while noticing the fact that the judgment of the Calcutta High Court in Century Enka Ltd.'s case [1977] 107 ITR 909 (which was later on over ruled by the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders made by it. Counsel for the assessee, relying upon a judgment of the Allahabad High Court in ITO v. S. B. Singar Singh and Sons [1970] 75 ITR 646, argued that the Tribunal has inherent powers to review its orders in order to correct a wrong done to a party. The argument raised by counsel for the assessee has no force. The Tribunal is a creation of a statute and it can exercise only those powers which have been conferred upon it. The only power conferred on the Tribunal under section 254(2) of the Act is to rectify any mistake apparent from the record. This court in Lala Rajeshwar Pershad v. CIT [1955] 28 ITR 842, held that the jurisdiction to review or modify the orders passed by the authorities under the Act cannot be inferred on the basis of a supposed inherent right. Counsel for the assessee, relying upon a judgment of the Madhya Pradesh High Court in CIT v. Mithalal Ashok Kumar [1986] 158 ITR 755, further argued that even if the Tribunal had no power to review its own order yet it can certainly correct its mistakes by rectifying the same in case it is brought to its notice that the material which was already on record before deciding the appeal on the merits was no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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