TMI Blog1998 (8) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... and that was filed before the ld. CIT (A) at the time of hearing it was not followed by him by bringing out some facts on the basis of certain facts and reasons for which no opportunity was given to the assessee's counsel. He submitted that it was against the principle of natural justice or against the rule of audi alteram partem. The learned counsel, therefore, argued that the Tribunal has considered the issue in a wrong facet i.e., the department can go against the decision of earlier year if there are materials on record. He submitted that though the res judicata is not applicable in the case of tax proceedings but if the department wants to differ from the opinion expressed in the earlier assessment year it is incumbent on them to give opportunity to the assessee to explain and satisfy the department and pursue them to follow the decisions of the earlier year which is in favour of the assessee. Another point he argued that the Tribunal has ignored some very important documents in the records of the Tribunal before giving its decision. He pointed out that there was a survey operation under section 133A in this case and in a report which is placed as page 23 of the paper book whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons including the decisions of this High Court in this respect. He, therefore, urged that the order of the Tribunal should not be rectified. 4. We have considered the rival submissions, facts and materials on record. It cannot be denied that in the order of the Tribunal we have not considered the survey reports as well as opinion of the Assessing Officer in respect of the operations of the assessee and nature of its income. It is luculent that during the course of proceedings before the Tribunal the matter was confined to the percentage of income shown by the assessee to be treated as agricultural income, because, some of the activities of the assessee was trading activities, e.g., selling the pots or some of the items which are sold after purchase i.e., not rearing at the assessee's own gardens. In our view, the impugned order of the Tribunal should be recalled to give proper justice to the arguments and evidence placed before the Tribunal. There are, of course, plethora of contradictory decisions in respect of the powers of the Tribunal for recalling its own order. On one hand the Hon'ble Orissa High Court in the case of CIT vs. ITAT [1992] 196 ITR 640 (60 Taxman 507.), and an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to us, that should not be ignored while passing the order; otherwise it will be an unceremonious disposal of an appeal. The Registry is directed to fix the case within a month of this order as the matter is old and have got serious repercussion for the other nurseries also. It may be noted that we are told that on the basis of the order of the Tribunal no action is taken against any nursery to draw them in the tax net. 5. The miscellaneous applications are allowed. Per Shri B. L. Chhibber Accountant Member - Regretting my inability to persuade myself to the view taken in the order of my learned Brother (V.P.), I proceed to write a dissenting order. 2. The main plank of the miscellaneous applications of the assessee is that the Tribunal has totally ignored the material which has been placed on record obtained at the behest of the Tribunal itself i.e., the inspection report. 3. Two vital issues before this Tribunal were whether income from Nursery Business would belong to Shri Puran Singh M. Verma (HUF) and secondly whether exemption should be allowed in that case under section 10(1) of the Act (income from agriculture). 4. After hearing both the sides at length this Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d find that at no point of Lime any Bench of the Tribunal gave a direction to Shri Manoj Mishra and Shri R. K. Chaudhary. Finally when the case was heard by the Bench consisting of the then Judicial Member and now Hon'ble Vice President and myself, we never gave any such direction to any of the D.Rs. or any official of the Tribunal for inspecting the assessee's lands. Accordingly in my opinion this Bench was not obliged to consider the so called report by two Sr. D.Rs. which is nothing but an extraneous piece of evidence now being brought to the notice of the Tribunal by way of two Miscellaneous Applications. Whether a particular income is agricultural income or business income is a question of law and this Tribunal after taking into consideration the various judicial pronouncements (referred to supra) and the definition of agriculture as given in Chambers 20th Century Dictionary New Edition (discussed at page 6 of the Tribunals order) held in very clear terms that the income derived by the assessee from nursery was not agricultural income and hence not exempt under section 10(1) of the Income-tax Act. Even if the said view were held to be erroneous, it could not be said to be a mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble Court be pleased to issue a writ of mandamus or any other writ, order or direction, asking the Tribunal to hold that the impugned income of the petitioner is agricultural income, c. This Hon'ble Court be pleased to quash the orders of respondent No. 1 at Exhibits 'B', 'C1 and C2' for the assessment years 1986-87. 1989-90 and 1990-91 and be pleased to ask him to hold that the impugned income is agricultural income and, therefore, not taxable in the hands of the petitioner." 6. In the light of the above discussion it is evident that the issue is one which is highly debatable. In my considered opinion in the guise of rectification of a mistake apparent from the record the lengthy (9 paged) miscellaneous petition is in effect seeking for the review of the order of the Tribunal which is not permissible under the law. In this connection, it would be relevant to refer to the A.P. High Court in the case of CIT vs. ITAT [1994] 206 ITR 126. The Hon'ble High Court, while considering the power of Tribunal under section 254(2) held as under : "We are of the opinion that the Appellate Tribunal, being a creature of the statute, has to confine itself in the exercise of its jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Member and the Accountant Member. The Judicial Member/Vice President had proposed to recall the order of the Tribunal accepting the claim of the assessee that there were certain mistakes in the appellate order. However, the learned Accountant Member differed with learned Vice President by holding that there was no mistake in the appellate order justifying recalling of the order. 2. The President of the Tribunal, in exercise of the powers under section 255(4), has been pleased to nominate me as a Third Member in respect of the following point of difference : "Whether on the facts and in the circumstances of the case, the impugned order of the Tribunal should be recalled or not ?" 3. I have heard the rival contentions and perused the records. Before dealing with the Miscellaneous Applications, it may be relevant to give the brief facts of this case. 4. The assessee carried on business of running a nursery at Ahmedabad under the name of "Roses Garden" and at Baroda under the name of "Baroda Nursery". Pursuant to a survey operation under section 133A, a notice under section 148 had been issued to the assessee in response to which Nil returns has been filed claiming exemption i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ultural income was again rejected by the Assessing Officer on the ground that the CIT (A)'s decision for assessment year 1986-87 was not accepted by the revenue and the appeal was pending before the ITAT. The assessee appealed to the CIT (A) against the decision of the Assessing Officer. The CIT (A) took a contrary view for assessment years 1989-90 and 1990-91 than the view taken by his predecessor for assessment year 1986-87. The assessee appealed to the Tribunal against the decisions of the CIT (A) for assessment years 1989-90 and 1990-91. The Tribunal disposed of all the four appeals, two by the revenue for assessment year 1986-87 and one each by the assessee for assessment years 1989-90 and 1990-91 by a consolidated order. The decision of the CIT (A) regarding the nature of income of nursery business for assessment year 1986-87 was reversed and the decision for assessment years 1989-90 and 1990-91 approved. However, the issue regarding the status in which the assessment should be made was set aside to the file of the Assessing Officer. Thereafter, the Assessing Officer has vide order dated 17th March, 1997, accepted the claim of the assessee that the income should be taxed in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f judgment. The Tribunal cannot, in the exercise of its power of rectification, look into some other circumstances which would support or not support its conclusion. Their Lordships further held that the Tribunal cannot re-decide the matter and that it has no power to review its order. 13. In the case of CIT vs. K. L. Bhatia [1990] 182 ITR 361 (51 Taxman 436.), their Lordships of the Delhi High Court held that the Income-tax Appellate Tribunal is a creature of the Income-tax Act and that the Tribunal has no inherent power of reviewing its order on merits. 14. In the case of V. P. Minocha, ITO vs. ITAT [1977] 106 ITR 691 their Lordships of the Gujarat High Court held that the Tribunal has no power to rectify a decision on debatable point of law as the same cannot be said to be a mistake apparent from the record. The mistake that can be rectified should be a mistake apparent from the record. 15. In the case of CIT vs. Globe Transport Corporation [1992] 195 ITR 311, their Lordships of the Rajasthan High Court - Jaipur Bench held that the power of review is not inherent in a Court or Tribunal. It is a creature of the statute. A Court or Tribunal cannot review its own decision un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he effect of rectifying a mistake and thereby amending its original order would always depend on the facts of each case. The mistakes have not to be strictly considered according to the provisions of Order 47, rule 1, Civil Procedure Code, 1908, but have got to be taken into consideration depending on the facts of each case which may vary as also the points involved." 21. In the case of ITO vs. ITAT [1965] 58 ITR 634 (All.), it was held by the Allahabad High Court that where in a judgment or order of the Tribunal an error has crept in, not as a result of any fault of the assessee, but attributable entirely to the Tribunal in having lost sight of a material fact at the time of writing its order or judgment, which fact was duly brought to its notice by the assessee, there would be an error apparent from the record which could be rectified. 22. The meaning of words "mistake apparent from record" - As per Chambers Concise Dictionary 'mistake' means to think or understand wrongly, to take for another thing or person, to be wrong about. It also means omission made not by design but by mischance. The word 'apparent' refers to something which is obvious, conspicuous and self-evident. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eous Applications of the assessee in the light of the aforementioned principles of law. 25. The first point brought out by the applicant in the miscellaneous application is "that for assessment year 1986-87 the CIT (A) had decided the issue in favour of the assessee. In assessment years 1989-90 and 1990-91 the Assessing Officer had followed his earlier order by stating that the decision of the CIT (A) has not been accepted. The assessee had taken specific grounds before the Tribunal that the CIT (A) did not allow proper opportunity of being heard. The Tribunal has dealt with this issue in the appellate order and rejected the claim of the assessee by holding that accusation of not giving a fair hearing to the assessee has not been brought out either in the statement of facts or in the grounds of appeal filed before the Tribunal." This is claimed, to be a mistake in the order. 26. In my view, there is no mistake in the order of the Tribunal in this regard. The issue has been decided by the Tribunal against the assessee on the ground that there was no such accusation. In the grounds of appeal for the assessment years 1989-90 and 1990-91, I find that the assessee had raised a grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether the CIT (A) was justified in not following his predecessor's order for the assessment year 1986-87 and not as to whether there were fresh materials before the Assessing Officer in the assessment years 1989-90 and 1990-91 for taking a different view. The Assessing Officer has in assessment years 1989-90 and 1990-91 in fact followed his own order for assessment year 1986-87. The Tribunal, in its wisdom, had justified the action of the CIT (A) in not following his predecessor's order for assessment year 1986-87. It is in this context that the decision of the Bombay High Court in the case of Burmah Shell Refineries Ltd. has been followed. 29. It may be pertinent to mention that under the Income-tax Act, each year of assessment is an independent unit of assessment. The Assessing Officer takes a decision which is appealable before the CIT (A). If the CIT (A) decides the appeal in favour of the assessee, the Department has the right of appeal to the Tribunal. Once the Tribunal also decides the matter in favour of the assessee, the Department has the right of seeking a reference to the High Court and ultimately to the Supreme Court. In the subsequent assessment year the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ricultural income." 32. It has been stated in the application that the Tribunal had wrongly mentioned in the appellate order that the decision of the Supreme Court in the case of Raja Benoy Kumar Sahas Roy has not adjudicated the issue at all and that there was a mere discussion on the point which was either raised or argued. It has been claimed that the Ahmedabad Bench of the Tribunal has committed a grave error in taking the above stand. 33. In my view, it is a question of opinion. The Tribunal has taken a view which the assessee's counsel or the assessee may consider to be wrong or even erroneous. However, that does not bring it within the ambit of section 254(2), being a mistake apparent from record. The Tribunal has discussed the issue and expressed its opinion and, therefore, there is no mistake in regard to this issue in the appellate order. 34. The next issue raised in the miscellaneous application is the non-consideration of the report of income-tax officials on their surprise spot visit to the agricultural land of the petitioner, i.e., the survey report under section 133A. It has been pointed out that the Tribunal has missed to refer to the report in the appellate o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ners adopting modern scientific techniques. All the operations carried on by the family for producing the plant saplings involved basic as well as subsequent operations done in conjunction with the basic operations and there is no dispute about the fact. I find from the report of the Inspectors dated 24-4-1986, who carried out the survey action under section 133A at the nursery site, that they have reported that the nursery is spread over about 25 acres of land approx. and employing 40 employees and there are two tube-well and irrigation is done with submersible pumps with the help of which the land was being irrigated. They have also reported that the income is derived from agricultural process. In view of these factual aspects and the decision of the Supreme Court as to what constitutes an agricultural operation, I have no hesitation to hold that the family of Shri Puransingh M. Verma is engaged in agricultural operations on the land and the income from nursery arising from sale of the agricultural produce i.e., plants of various species is income from agricultural exempt under section 10(1) of the Income-tax Act, 1961." 37. For assessment years 1989-90 and 1990-91 also the CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not affected the consequences of the appeals. Secondly, a perusal of the report furnished by the Assessing Officers alongwith the Inspectors' report reveals two things in favour of the assessee. One is the cultivation of land and the other is the opinion of the Inspectors that the income of the assessee is the agricultural income. As far as the opinion of the Inspectors is concerned, the same was not binding upon the Assessing Officer or any other superior authority. Therefore, its non-consideration is of no consequence. The second aspect of the report is the cultivation of the land. In this regard it may be pertinent to mention that the CIT (A) for the assessment year 1986-87 reached to the conclusion that the income derived by the assessee was agricultural income. For assessment year 1989-90, another CIT (A) held that the income derived by the assessee from nursery business was not agricultural income of the assessee. Whereas for assessment year 1986-87 the CIT (A), took into account that there was cultivation of land for assessment year 1989-90 the CIT (A) was of the view that the main activity of the assessee was that of business and not of agricultural operations. When the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay Tenancy Act in definition of agricultural has included horticultures in its ambit. Had the agricultural, horticultural and nursery are the same, then the legislature in the Tenancy Act would not have included the horticulture and the nursery specifically in the definition clause. To interpret the words - agriculture, horticulture and nursery, the help of Chambers 20th Century Dictionary, New Edition, is taken and it defined them as follows :- '...........................................'." 40. It has been held that the income derived by the assessee from running the nursery does not fall within the definition of agricultural income and, therefore, the assessee is not entitled to exemption under section 10 of the Income-tax Act, 1961. 41. It is in the light of these facts I hold that the material contained in the survey report under section 133A has been considered in arriving at the decision. No prejudice has been caused to the assessee by not looking at the copy of the report filed during the hearing when it is established that the contents of the report have been duly considered. On consideration of the facts and circumstances of the case the Tribunal has discussed the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofit from selling the plants is non-agricultural income and, therefore, some portion of the total income would be non-agricultural income. Assuming that the Tribunal had directed the two senior DRs to visit the spot and give a report to it, the issue that remains is as to whether the opinion given by the two DRs would be binding upon the Tribunal. 45. In my view, the opinion of the two DRs was not binding upon the Tribunal and therefore, even if they had been directed by the Tribunal to submit a report, the non-consideration of their opinion has not affected the results of the appeals. Therefore on that ground also the application fails. 46. I am therefore of the considered view that, there is no mistake apparent from record in the order of the Tribunal which can be rectified under section 254(2). As already pointed out, the Tribunal does not have the power to review its earlier order. The Bench of the Tribunal has considered the contentions and the material had arrived at a decision. The correctness of that decision cannot be questioned in the proceedings under section 254(2). It is only the mistakes if any which are apparent from record which can be rectified. If the mistake ..... X X X X Extracts X X X X X X X X Extracts X X X X
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