2011 (5) TMI 360 - HC - Income Tax

Rectification u/s 254(2) - The Tribunal in its order dated 13th October, 2011, referred to the controversy in question relating to disallowance made on account of short term capital loss and long term capital loss - It is not unusual or abnormal for Judges or adjudicators to refer and rely upon judgments/decisions after making their own research - The entire issue was examined on merits including the judgments relied upon the petitioner assessee - The writ petition is dismissed

Summary

Issues:
1. Rectification of mistake apparent from the record under Section 254(2) of the Income Tax Act, 1961.
2. Validity of the tribunal's decision to refer to another ITAT Bench's judgment.
3. Dismissal of the writ petition challenging the tribunal's order.

Analysis:

1. The petitioner argued that the tribunal had erred in dismissing the application under Section 254(2) of the Income Tax Act, 1961, as it referred to a decision of another ITAT Bench not cited during the hearing. The petitioner contended that the tribunal's order should have been recalled. However, the court held that the power to rectify a mistake under Section 254(2) is limited to rectifying an apparent mistake. The tribunal had examined the issue of disallowance of capital losses thoroughly, including judgments relied upon by the petitioner. The court emphasized that referring to another decision in the tribunal's order does not constitute a mistake apparent from the record, as it is common practice for adjudicators to consider relevant judgments in their decisions.

2. The court further elaborated that the tribunal's reference to the decision of ITAT, Mumbai, 'F' Bench, in the case of Macintosh Finance Estates Ltd. Vs. ACIT was not a ground for rectification. The judges or adjudicators often refer to judgments during their research, and such references do not amount to an error that can be rectified under Section 254(2). Therefore, the court found no merit in the petitioner's argument challenging the tribunal's decision based on the reference to another judgment.

3. Ultimately, the court dismissed the writ petition, stating that there was no merit in the petitioner's claims. The court clarified that its decision did not express any opinion on the merits of the addition made in the tribunal's order. Additionally, the court noted that the petitioner had filed an appeal under Section 260A of the Act against the tribunal's order, which would be decided independently on its own merits, separate from the issues raised in the writ petition.

This comprehensive analysis of the judgment highlights the court's interpretation of the provisions of the Income Tax Act, 1961, and its application to the specific circumstances of the case, emphasizing the limitations on rectification powers and the standard practice of referencing relevant judgments in judicial decisions.