2005 (11) TMI 486 - AT - Income Tax

Summary

Issues Involved:
1. Recall/rectification of the Tribunal's order due to alleged haste and non-application of mind.
2. Levy of interest under section 234B of the Income-tax Act.
3. Cost of acquisition of shares for capital gains calculation for non-residents.

Detailed Analysis:

1. Recall/Rectification of the Tribunal's Order Due to Alleged Haste and Non-Application of Mind:
The assessee sought the recall or rectification of the Tribunal's order dated 15-4-2004, arguing that the order was passed in haste on the retirement date of one of the members, resulting in non-application of mind. The Tribunal noted that the hearing concluded on July 1, 2003, and the order was passed on April 15, 2004, the Accountant Member's retirement date. The assessee referenced administrative instructions and the Apex Court's guidelines in Anil Rai v. State of Bihar, which mandate timely disposal of appeals. The Tribunal, however, found this submission untenable under section 254(2) of the Income-tax Act, which allows amendment of orders only for mistakes apparent from the record. The Tribunal emphasized that the validity of an order must be challenged before the High Court under section 260A, not under section 254(2). The Tribunal also highlighted the importance of the Supreme Court's guidelines for ensuring speedy justice but clarified that these guidelines do not render an order invalid if passed belatedly. The Tribunal concluded that inordinate delay alone does not invalidate an order and rejected the assessee's submission.

2. Levy of Interest Under Section 234B of the Income-tax Act:
The assessee contended that interest under section 234B could not be levied without default in advance tax payment, arguing that tax was deductible at source under section 195 on the sale of shares. The Tribunal had previously decided the issue based on the Supreme Court judgment in CIT v. Anjum M.H. Ghaswala, which the assessee claimed was irrelevant. The Tribunal maintained that review under section 254(2) is impermissible and noted that it had considered the facts in light of section 209(1)(d). The Tribunal emphasized that tax deductible at source must be considered on the date of advance tax payment. As the assessee received payments before the advance tax due date without tax deduction, it was obligated to pay advance tax. The Tribunal found no mistake in its earlier decision and rejected the assessee's contention.

3. Cost of Acquisition of Shares for Capital Gains Calculation for Non-Residents:
The assessee argued that the cost of acquisition for shares purchased before 1-4-1981 should be taken at the market value as on 1-4-1981 under section 55(2)(b)(i), despite the Tribunal's finding that non-residents cannot exercise this option due to the second proviso to section 48. The Tribunal reiterated that section 254(2) does not permit review of earlier orders. It noted that the Tribunal had recorded and considered the assessee's arguments and relevant statutory provisions before concluding that non-residents are not entitled to the option under section 55(2)(b)(i). The Tribunal emphasized that any error in judgment must be corrected by higher courts, not under section 254(2). The Tribunal cited the Bombay High Court's decision in CIT v. Ramesh Electric & Trading Co., which held that failure to consider an argument does not constitute a mistake apparent from the record. Consequently, the Tribunal dismissed the assessee's application.

Conclusion:
The Tribunal dismissed the assessee's miscellaneous application, finding no merit in the submissions regarding the recall/rectification of the order, the levy of interest under section 234B, and the cost of acquisition of shares for non-residents. The Tribunal emphasized the limited scope of section 254(2) and the necessity of addressing any errors through higher judicial forums.