2016 (10) TMI 1101 - AT - Income Tax

Rectification of mistake - Tribunal s powers of rectifying mistakes on applications filed under section 254(2) - Held that - The present miscellaneous applications deserve to be dismissed on the short reason that the mistakes which are sought to be rectified in these miscellaneous applications are alleged to have crept in order passed by the Tribunal under section 254(2) but then as held by the Special Bench of this Tribunal in the case of Padam Prakash (HUF) vs. ITO 2011 (1) TMI 226 - ITAT NEWDELHI Tribunal s powers of rectifying mistakes apparent from record are confined to mistakes in orders under section 254(1) and not under section 254(2). In this view of the matter we dismiss the miscellaneous applications on the short ground of jurisdiction and decline to deal with the matter on merits.

Summary

Issues: Jurisdiction of ITAT to rectify mistakes apparent on record in orders passed under section 254(2) of the Income Tax Act.

In this judgment by the Appellate Tribunal ITAT AHMEDABAD, the Assessing Officer applicant filed miscellaneous applications pointing out mistakes in the order dated 13.05.2015. The assessee's counsel referred to a Special Bench decision in the case of Padam Prakash (HUF) vs. ITO, highlighting that orders under section 254(2) cannot be rectified under the same section, as the Tribunal's powers are limited to rectifying mistakes in orders passed under section 254(1). The Departmental Representative did not contest this position but relied on the content of the applications. The Tribunal, after considering the arguments and material on record, concluded that since the mistakes sought to be rectified were in an order passed under section 254(2), they lacked jurisdiction to address them. Citing the precedent set by the Special Bench decision, the Tribunal dismissed the miscellaneous applications solely on the grounds of jurisdiction, declining to delve into the merits of the matter. Consequently, the applications were dismissed on 13th October 2016.

This judgment primarily deals with the interpretation of the Tribunal's powers under section 254 of the Income Tax Act, specifically focusing on whether the Tribunal can rectify mistakes apparent on record in orders passed under section 254(2). The Tribunal relied on the Special Bench decision in Padam Prakash (HUF) vs. ITO to establish that its jurisdiction to rectify mistakes is limited to orders passed under section 254(1) and does not extend to orders under section 254(2). The decision underscores the importance of adhering to legal precedents and the boundaries of the Tribunal's authority when addressing rectification applications. The judgment serves as a reminder of the procedural limitations within which the Tribunal operates and emphasizes the significance of legal principles in determining the Tribunal's jurisdiction in rectification matters.