2004 (8) TMI 59 - HC - Income Tax

Tribunal recalling its order in exercise of powers under section 254(2) - mistake apparent from the record some of the grounds set out in the memorandum of appeal had not been considered by the Tribunal while deciding the appeal - Whether, Tribunal was legally correct in recalling a part of its order dated December 1, 1981, confirming the penalty under section 271(1)(c) of the Income-tax Act, 1961? - we do not find any illegality in the order of the Tribunal. The question referred to us, therefore, is answered in the affirmative, i.e., in favour of the assessee

Summary

Issues:
1. Legality of recalling part of the order confirming penalty under section 271(1)(c) of the Income-tax Act, 1961.

Detailed Analysis:
The High Court of ALLAHABAD was presented with a question of law referred by the Income-tax Appellate Tribunal regarding the legality of recalling a part of its order dated December 1, 1981, confirming the penalty under section 271(1)(c) of the Income-tax Act, 1961. The case pertained to the assessment year 1973-74, where the Tribunal had initially decided the appeal filed by the assessee on December 1, 1981. Subsequently, the assessee filed an application pointing out certain mistakes apparent from the record and requested the entire order to be recalled for a fresh hearing. The Tribunal, in its order dated June 14, 1983, partially allowed the application, noting that certain grounds in the memorandum of appeal had not been considered during the initial appeal process.

The court considered the argument presented by the Revenue's counsel, Shri A. N. Mahajan, as well as the absence of representation from the assessee's side. It was established that grounds Nos. 2, 3, and 4 from the memorandum of appeal had indeed not been addressed by the Tribunal during the appeal process. The court referred to a previous decision in the case of CIT v. Keshav Fruit Mart [1993] 199 ITR 771 (All), which emphasized that the omission to consider a raised ground before the Tribunal constitutes a mistake apparent from the record. Consequently, the Tribunal was within its rights to recall the order under section 254(2) of the Act, as failing to address these grounds was a clear error in the original order.

Based on the discussion and legal precedent cited, the court found no illegality in the Tribunal's decision to recall the order. The question referred to the court was answered affirmatively, favoring the assessee and ruling against the Revenue. However, it was decided that each party would bear their own costs in the matter.