TMI Blog2008 (9) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... l, Ahmedabad on September 5, 2001 in Misc. Application NO. 31/Rjt/2000. By the said order, the Tribunal held that there was a `mistake apparent from the record' within the meaning of sub-section (2) of Section 254 of the Income Tax Act, 1961 and accordingly, it recalled its earlier order passed on October 27, 2000 in ITA No. 69/Rjt/2000. 2. Shortly stated the facts of the case are that Saurashtra Kutch Stock Exchange Ltd.- respondent herein is an assessee under the Income Tax Act, 1961 (hereinafter referred to as `the Act'). It is a Company registered under Section 25 of the Companies Act, 1956. The assessee is a `Stock Exchange' duly recognized under the Securities Contracts (Regulation) Act, 1956. As a `Stock Exchange', it is a `charitable institution' entitled to exemption under Sections 11 and 12 of the Act from payment of income-tax. The assessee, therefore, made an application on February 10, 1992 for registration under Section 12A of the Act. The Commissioner of Income Tax, Rajkot registered it on July 8, 1996. The assessee filed its return of income on October 29, 1996 for the assessment year 1996-97 declaring its total taxable income as `Nil', claiming exemption under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Commissioner of Surtax, Gujarat, (1999) 237 ITR 834. 7. Dissatisfied with the order passed by the Tribunal in Miscellaneous Application, rectifying a `mistake apparent from record' and recalling its earlier order, the Revenue filed a writ petition which, as stated above, was dismissed by the High Court. Hence, the present appeal. 8. On December 19, 2003, notice was issued by this Court and in the meantime, further proceedings before the Tribunal were stayed. Leave was granted on February 16, 2004 and stay was ordered to continue. On February 25, 2008, a Bench presided over by Hon'ble the Chief Justice of India ordered the Registry to list the appeal for final hearing during summer vacation. Accordingly, the matter has been placed before us. 9. We have heard learned counsel for the parties. 10. The learned counsel for the Revenue submitted that the Tribunal committed an error of law and of jurisdiction in exercising power under sub-section (2) of Section 254 of the Act and in recalling its earlier order passed in appeal. It was submitted that the Tribunal is a statutory authority (though not an `income tax authority' under Section 116) and is exercising powe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubject to the supervisory jurisdiction of the High Court of Gujarat under Article 227 of the Constitution. The High Court of Gujarat is thus `Jurisdictional Court' over the Tribunal. The Tribunal is, therefore, bound by a decision of the High Court of Gujarat. 14. The question which fell for consideration before the Income Tax Authorities related to exemption in favour of `trust'. The issue came up for consideration before the High Court of Gujarat in Hiralal Bhagwati whether a `trust' was entitled to exemption from payment of tax under the Act. The High Court held that the `trust' could claim such exemption. All authorities under the Act, including the Tribunal, were bound by the said decision. Unfortunately, however, the attention of the Court was not invited to the said decision at the time when the case of the assessee was considered and orders were passed under the Act. Subsequently, however, the assessee came to know about the said judgment and hence an application under Section 254 (2) was filed bringing it to the notice of the Tribunal. There was thus a `mistake apparent from the record' and the Tribunal was bound to recall its earlier order which has been done. No ill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this Court. The assessee has no grievance against the impugned order. In our opinion, therefore, it would not be appropriate for this Court to decide the second question which has been raised by the parties; viz. whether on merits, the assessee is or is not entitled to exemption from payment of tax under Section 11 of the Act. We, therefore, refrain from expressing any opinion on the second question. 19. The learned counsel for the parties drew our attention to the relevant provisions of the Act. Section 252 of the Act provides for constitution of Income Tax Appellate Tribunal by the Central Government consisting of as many judicial and accountant members as it thinks fit to exercise the powers and discharge the functions conferred on such Tribunal under the Act. It also provides for qualification of Members. It enacts that the Central Government shall ordinarily appoint a judicial member of the Tribunal to be the President thereof. Section 253 enables an assessee aggrieved by any of the orders mentioned in the said section to appeal to Tribunal. Section 254 deals with orders passed by the Tribunal and is material for the purpose of controversy raised in the present appeal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irects the Tribunal to exercise such power. 24. There is, however, no dispute by and between the parties that if there is a `mistake apparent from the record' and the assessee brings it to the notice of the Tribunal, it must exercise power under sub-section (2) of Section 254 of the Act. Whereas the learned counsel for the Revenue submitted that in the guise of exercise of power under sub-section (2) of Section 254 of the Act, really the Tribunal has exercised power of `review' not conferred on it by the Act, the counsel for the assessee urged that the power exercised by the Tribunal was of rectification of `mistake apparent from the record' which was strictly within the four corners of the said provision and no exception can be taken against such action. 25. The learned counsel for the Revenue contended that the normal principle of law is that once a judgment is pronounced or order is made, a Court, Tribunal or Adjudicating Authority becomes functus officio [ceases to have control over the matter]. Such judgment or order is `final' and cannot be altered, changed, varied or modified. It was also submitted that Income Tax Tribunal is a Tribunal constituted under the Act. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alaram v. Volkart Brothers, Bombay, (1971) 2 SCC 526, this Court held that "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". It was, however, conceded in all leading cases that it is very difficult to define an "error apparent on the face of the record" precisely, scientifically and with certainty. 31. In the leading case of Hari Vishnu Kamath v. Syed Ahmad Ishaque , (1955) 1 SCR 1104, the Constitution Bench of this Court quoted the observations of Chagla, C.J. in Batuk K. Vyas v. Surat Municipality, ILR 1953 Bom 191 : AIR 1953 Bom 133 that no error can be said to be apparent on the face of the record if it is not manifest or self-evident and requires an examination or argument to establish it. The Court admitted that though the said test might apply in majority of cases satisfactorily, it proceeded to comment that there might be cases in which it might not work inasmuch as an error of law might be considered by one Judge as apparent, patent and self- evident, but might not be so considered by another Judge. The Court, therefore, conclud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... des a question without giving an opportunity to be heard to the party affected by the order, or where the procedure adopted in dealing with the dispute is opposed to principles of natural justice. There is, however, no doubt that the jurisdiction to issue a writ of certiorari is a supervisory jurisdiction and the Court exercising it is not entitled to act as an appellate Court. This limitation necessarily means that findings of fact reached by the inferior Court or Tribunal as a result of the appreciation of evidence cannot be reopened or questioned in writ proceedings. An error of law which is apparent on the face of the record can be corrected by a writ, but not an error of fact, however grave it may appear to be. In regard to a finding of fact recorded by the Tribunal a writ of certiorari can be issued if it is shown that in recording the said finding, the Tribunal had erroneously refused to admit admissible and material evidence, or had erroneously admitted inadmissible evidence which has influenced the impugned finding. Similarly, if a finding of fact is based on no evidence, that would be regarded as an error of law which can be corrected by a writ of certiorari. In dealing w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efine or to describe adequately all cases of errors which can be appropriately described as errors of law apparent on the face of the record. Whether or not an impugned error is an error of law and an error of law which is apparent on the face of the record, must always depend upon the facts and circumstances of each case and upon the nature and scope of the legal provision which is alleged to have been misconstrued or contravened". (emphasis supplied) 37. In our judgment, therefore, a patent, manifest and self-evident error which does not require elaborate discussion of evidence or argument to establish it, can be said to be an error apparent on the face of the record and can be corrected while exercising certiorari jurisdiction. An error cannot be said to be apparent on the face of the record if one has to travel beyond the record to see whether the judgment is correct or not. An error apparent on the face of the record means an error which strikes on mere looking and does not need long- drawn-out process of reasoning on points where there may conceivably be two opinions. Such error should not require any extraneous matter to show its incorrectness. To put it differently, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain and expound the `old one'. In other words, Judges do not make law, they only discover or find the correct law. The law has always been the same. If a subsequent decision alters the earlier one, it (the later decision) does not make new law. It only discovers the correct principle of law which has to be applied retrospectively. To put it differently, even where an earlier decision of the Court operated for quite some time, the decision rendered later on would have retrospective effect clarifying the legal position which was earlier not correctly understood. 43. Salmond in his well-known work states; " The theory of case law is that a judge does not make law; he merely declares it; and the overruling of a previous decision is a declaration that the supposed rule never was law. Hence any intermediate transactions made on the strength of the supposed rule are governed by the law established in the overruling decision. The overruling is retrospective, except as regards matters that are res judicatae or accounts that have been settled in the meantime". (emphasis supplied) 44. It is no doubt true that after a historic decision in Golak Nath v. Union of India, (1967) 2 SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said order. Both the orders, therefore, in our opinion, are strictly in consonance with law and no interference is called for. 48. For the foregoing reasons, in our view, no case has been made out to interfere with the order passed by the Income Tax Appellate Tribunal, Ahmedabad and confirmed by the High Court of Gujarat. The appeal deserves to be dismissed and is accordingly dismissed. On the facts and in the circumstances of the case, however, the parties are ordered to bear their own costs. 49. Before parting, we may state that we have not stated anything on the merits of the matter. As indicated earlier, the assessee has not approached this Court. Only the Revenue has challenged the order passed under Section 254 (2) of the Act. The Tribunal, in view of the order of rectification, has directed the Registry to fix the matter for re-hearing and as such the appeal will be heard on merits. We, therefore, clarify that we may not be understood to have expressed any opinion one way or the other so far as exemption from payment of tax claimed by the assessee is concerned. As and when the Tribunal will hear the matter, it will decide on its own merit without being influence ..... X X X X Extracts X X X X X X X X Extracts X X X X
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