2010 (10) TMI 1120 - AT - Income Tax

Summary

Issues involved:
The judgment addresses the disallowance of deduction u/s 80 IC of the Income Tax Act on the grounds of threading on a rod not constituting manufacture and violation of conditions u/s 80 IC (4)(i) due to splitting up of existing business.

Issue 1: Threading process not constituting manufacture
The Tribunal allowed the claim of deduction u/s 80 IC based on its decision in a previous case of the assessee for Assessment Year 2005-06. The Revenue contended that the issue of splitting up of business, leading to disallowance of deduction u/s 80 IC, was not considered by the Tribunal. The Tribunal's power to rectify mistakes under Section 254 (2) of the I.T. Act is limited to errors apparent on the face of the record. It cannot re-argue or re-write an order on the merits of the case.

Issue 2: Violation of conditions u/s 80 IC
The Revenue argued that the Tribunal failed to consider the issue of disallowance of deduction u/s 80 IC due to splitting up and reconstruction of the business. The Tribunal's power under Section 254 (2) is constrained to rectifying mistakes that are clear and self-evident from the record. The Tribunal cannot act as an appellate court or review its own orders beyond rectifying apparent errors.

Conclusion:
The Tribunal dismissed the Miscellaneous Application filed by the Revenue, emphasizing that the power under Section 254 (2) is limited to rectifying mistakes that are evident from the record. The judgment highlights that the Tribunal cannot re-argue or review decisions made in the original order. The application for rectification cannot be used to reopen and reargue the entire matter beyond the scope of Section 254 (2) of the I.T. Act. The judgment reaffirms the principle that the Tribunal's power is restricted to rectifying clear errors and not to act as an appellate court.