2007 (4) TMI 47 - HC - Income Tax

Assessee in the garb of application for rectification can not be allowed to sought reopening and re-argue the whole matter. It is beyond the scope of Section 254(2) of the Act.

Summary

Issues:
Appeal under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal for the assessment years 1988-89 and 1989-90. Maintainability of the appeal challenging the findings of the Tribunal regarding addition made on account of gross profits and genuineness of purchases.

Analysis:
The appeal was filed against the impugned order passed by the Income Tax Appellate Tribunal, dismissing the application under Section 254(2) of the Income Tax Act. The Tribunal had dismissed the appeals filed by the Revenue and partly allowed the cross-objections filed by the Assessee. The Assessee then filed a writ petition, which was dismissed with liberty granted to seek other remedies available under the law.

The main issue in this case was the maintainability of the present appeal challenging the Tribunal's findings on the addition made on account of gross profits and the genuineness of purchases. The relevant section for disposal of the appeal was Section 254(2) of the Act, which allows rectification of mistakes apparent from the record. However, it was clarified that an oversight of a fact or failure to consider an argument does not constitute an apparent mistake. The Assessee cannot use rectification to re-argue the entire matter beyond the scope of the section.

Referring to a previous court decision, it was emphasized that the rectification jurisdiction is not meant for rehearing or re-writing an order affecting the merits of the case. The Tribunal's order in this case stated that the Assessee's application for rectification sought to re-appreciate evidence already on record, which was beyond the scope of Section 254(2). The Tribunal found the application misconceived and not entertainable.

The court agreed with the Tribunal's findings, stating that the Assessee's appeal was wholly misconceived and without any basis. Consequently, the present appeal was dismissed, upholding the impugned order passed by the Tribunal.

In conclusion, the court affirmed the dismissal of the appeal, emphasizing that the Assessee's attempt to reopen and re-argue the matter through rectification was beyond the scope of the law. The judgment highlighted the limitations of rectification under Section 254(2) and upheld the Tribunal's decision in this regard.