TMI Blog2009 (5) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... etition is allowed – Held that only mistake apparent on record can be rectified by tribunal – further, it is held that tribunal is not permitted to review/recall its order - 5081 of 2008 - - - Dated:- 8-5-2009 - AJAY RASTOGI J. Sanjay Jhanwar with Prakul Khurana and Atul Saxena for the petitioner Sameer jain for respondents Nos. 1 and 4. Anurup Singhi for J.K. Singhi for respondents Nos. 2 and 3. JUDGMENT AJAY RASTOGI J.— While considering the application under article 226(3) of the Constitution of India seeking vacation of the interim orders dated May 23, 2008, this court, vide order dated January 16, 2009, observed to finally dispose of the petition at the admission stage ; hence the instant petition was finally heard at joint request. The instant petition is directed against the order dated March 31, 2008 (Annexure 4) in Misc. April 8/JP/2008, whereby the Income-tax Appellate Tribunal, Jaipur Bench ("ITAT, Jaipur"), in exercise of powers under section 254(2) of the Income-tax Act, 1961, ("I. T. Act") recalled its earlier order dated March 29, 2006 (Annexure 1) arid further directed both the appeals (ITSSA-105/JP/2004 and 35/JP/2005-assessment year-b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termined by the Mumbai Bench, Mumbai. As informed, hearing after transfer is pending before the Mumbai Bench. 5. Since the petitioner was assessed by the assessing authority under section 158BD of the Act, vide order dated July 13, 2004, against which an appeal was preferred and came to be decided by the Commissioner of Income-tax (Appeals)-III, Jaipur, on December 14, 2004, against which the petitioner-company preferred an appeal (IT(SS)A No. 105/JP/2004) on February 27, 2005, before the Income-tax Appellate Tribunal, Jaipur, and cross-appeal (IT(SS)A No.35//JP/2005) was also filed by the Revenue and both the appeals (supra) were decided by a common order dated March 29, 2006, (Annexure 1) under section 254(1) of the Act. 6. Against the order dated March 29, 2006, (Annexure 1) of the Income-tax Appellate Tribunal Jaipur, the Revenue preferred appeals under section 260A of the Act (being D. B. Income-tax Appeals Nos. 77 of 2008 and 78 of 2008) which as informed, were admitted by this court and are pending adjudication. 7. At this stage, without there being any application filed by either of the parties, vide order dated December 15, 2007, (Annexure 2), the Income-tax Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal, Jaipur, in exercise of powers under section 254(2) of the Act is without jurisdiction and deserves to be set aside. 10. The respondents have filed separate reply through their respective counsel. In their reply, respondents Nos. 1 and 4 raised a preliminary objection that the writ petition is not maintainable in view of the statutory remedy of appeal being available under section 260A of the Act; and that apart, it has been, inter alia, averred that at one stage, request was made by the petitioner-company by clubbing its appeals and to be heard at Mumbai Bench, Mumbai, pertaining to search conducted at the premises of Mayur M.Thakkar; and despite the order of consolidation dated April 4, 2005, (Annexure 3) passed on its application by the President, Income-tax Appellate Tribunal, Mumbai, in exercise of powers under rule 4 of the Income-tax (Appellate Tribunal) Rules, 1963, cancelled but was not brought to the notice of the Income-tax Appellate Tribunal, Jaipur Bench, which was the mistake apparent from the record and thus the Tribunal has not committed any error in recalling its final order dated March 29, 2006, (Annexure 1) passed in exercise of powers under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner-company found in course of search conducted by the assessing authority at Jaipur. 15. At the stage of pending assessment before the assessing authority, cases under jurisdiction of different Director General Chief Commissioner or Commissioner can be transferred obviously after affording reasonable opportunity of being heard to the assessee and after recording reasons for doing so in exercise of powers under section 127 of the Act. 16. In the instant case, the assessment was made of the assessee (Mayur M. Thakkar) under section 158BC of the Act by the assessing authority Mumbai against which he preferred appeal (Commissioner of Income-tax (Appeals) C-VII/C-18/ROT-198/01/02) which was also decided on April 30, 2003, preferred further appeal to the Income-tax Appellate Tribunal, Mumbai ; and the petitioner being intervener preferred an appeal before the Mumbai Bench which was transferred to Jaipur Bench on December 9, 2004, and this appeal was separately registered by Jaipur Bench as IT(SS)A No.97/JP104, which on request made by the petitioner for its consolidation was transferred to Mumbai Bench, Mumbai, vide orders dated April 4, 2005, (Annexure 3) passed by the Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examine the controversy further, it will be relevant to look into section 254(1) and (2) of the Act which runs ad infra "254(1) The Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. (2) The Appellate Tribunal may, at any lime within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1), and shall make such amendment, if the mistake is brought to its notice by the assessee or the Assessing officer." 22. The proviso to rules 34A (3) and (4) of the Income-tax (Appellate Tnbunal) Rules, 1963, (quoted below) provides procedure for dealing with applications submitted under section 254(2) of the Act: "(3) The Bench which heard the matter giving rise to the application (unless the President, the Senior Vice-President, the Vice- President or the Senior Member present at the station otherwise directs) shall dispose it after giving both the parties to the application a reasonable opportunity of being heard Provided that it shall not be necessary to post miscellaneous application for hearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould none theless remain an order subject to appeal under section 260A to the High Court. 29. The contention advanced by counsel for petitioner that such powers under section 254(2) could not be exercised suo moth is not of any substance. On a bare reading of the provisions of section 254 of the Act it depicts that the Tribunal has powers to rectify mistake apparent from record in two situations—(1) on its own motion; and (2) on application being moved by either party before it. It cannot be contended that power can be exercised only on the application. If the Tribunal is vested with power to rectify a mistake apparent from the record, it can certainly do so on its own motion or on application being filed by either party. 30. A Division Bench of the Delhi High Court had an occasion to examine scope of section 254(2) of the Act in CIT v. K L. Bhatia [1990]182 ITR 361 (Delhi) and observed ad infra (page 367): "As we have already observed, the Tribunal is a creation of the statute. It is an admitted case, and it is now well-settled, that though the Tribunal has no inherent power of reviewing its order on the merits, the Tribunal has incidental or ancillary powers which can b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther 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 should be so manifest and clear that no court would permit it to remain on record. If the view accepted by the court in the original judgment is one of the possible views, the case cannot be said to be covered by an error apparent on the face of the record." 32. In Honda Sic Power Products Ltd. v. CIT [2007] 295 ITR 466; 12 SCC 596, the apex court observed ad infra (page 472 of 295 ITR): "12. As stated above, in this case we are concerned with the application under section 254(2) of the 1961 Act As stated above, the expression 'rectification of mistake from the record' occurs in section 154. It also finds place in section 254(2). The purpose behind the enactment of section 254(2) 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 commit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f depicts that appeal (ITSSA No. 97/JP104) block period April 1, 1988, to March 23, 1999) filed by the appellant (petitioner-company herein) was transferred from Jaipur to Mumbai Bench and its copy was also forwarded to Asstt. Registrar, Income-tax Appellate Tribunal Mumbai, to hear appeal preferred by the petitioner (ITSS A No. 97/JP/04) together with (ITSS A. No.375 of 2004) filed by Mayur M. Thakkar. 35. But there was no order available on record being passed of consolidating appeals (ITSS A. No.105/JP/2004 and cross-appeal No. TT(SS)35/JP/2005) for being heard at the Mumbai Bench in the absence whereof, there cannot be said to be any mistake apparent from the record being committed by the Tribunal Jaipur Bench, in hearing such appeals and decided finally under section 254(1) of the Act, vide order dated March 26, 2006 (Annexure 1). Hence, the very plea of mistake apparent from the record having been taken to be the basis by the Tribunal while recalling its final order passed under section 254(1) of the Act on the facts of the instant case is otherwise not legally sustainable, 36. However, it is relevant to mention that after the impugned order was passed by the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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