2011 (8) TMI 868 - AT - Income Tax

Rectification of mistakes - whether the assessee s activity, as undertaken, is one of hiring, which would thus fall within the purview of the Hire Purchase Act, 1972, or one of financing, so that the charges received by it, qualify to be considered as an interest, and, thus, subject to the Interest Tax Act. 1974 - the findings of the learned Accountant Member are that what all the learned Departmental Representative stated while representing the Revenue is that if the Tribunal finds that if there has been in fact, a non-adjudication of the relevant ground, the Revenue would have no objection for recalling of the order to that limited extent - The learned AM, in my opinion has properly discussed the issue as also the case laws relied upon by the learned counsel for the assessee to seek a rectification, and has come to a correct conclusion that the mistakes pointed out by the assessee were not obvious on the face of the record which warrant rectification - Decided against the assessee

Summary

Issues Involved:
1. Rectification of mistakes apparent from record under Section 254(2) of the Income Tax Act, 1961.
2. Non-adjudication of Ground No. 5 in the Tribunal's order dated 14.08.2003.
3. Whether the Tribunal's order can be recalled to decide the undecided ground.
4. Whether the Tribunal's order amounts to a review rather than rectification.

Detailed Analysis:

1. Rectification of Mistakes Apparent from Record:
The appellant filed Miscellaneous Applications (M.As) under Section 17(1) of the Interest Tax Act, 1974, seeking rectification of mistakes apparent from the Tribunal's order dated 14.08.2003. The primary contention was that Ground No. 5, common in all appeals, remained un-adjudicated. The Tribunal acknowledged that if a ground remains undecided, it constitutes a mistake apparent from the record, which is rectifiable under Section 254(2) of the Income Tax Act, 1961, applicable to the Interest Tax Act.

2. Non-Adjudication of Ground No. 5:
Ground No. 5 stated: "Because the ld. CIT(A) has misdirected himself in completely ignoring the plethora of evidence and case law adduced before him to the effect that the appellant is an owner as defined in clause (f) of section 2 of Hire Purchase Act, 1972 and not a 'money-lender' under the Money-Lending Act." The appellant argued that this ground was not decided as referred, and the decision taken was based on incorrect facts, amounting to a mistake apparent on record. The Tribunal found that the issue regarding money-lending, as contained in Ground No. 5, remained undecided, which constituted a mistake apparent on record.

3. Tribunal's Order Recall:
The Revenue's representative did not object to recalling the Tribunal's order to the extent of adjudicating Ground No. 5. The Tribunal noted that the non-consideration of the Supreme Court's decision in Charanjit Singh Chaddha v. Sudhir Mehra AIR 2001 SC 3721, filed by the assessee, also amounted to a mistake apparent on record. Therefore, the Tribunal decided to recall the order to adjudicate Ground No. 5 in all appeals.

4. Review vs. Rectification:
The Accountant Member disagreed with the Judicial Member, stating that Ground No. 5 was disposed of by the Tribunal, albeit considered general in nature. The Accountant Member argued that the Tribunal's understanding of the issue was correct and that the ground was adjudicated in the context of whether the assessee's activity fell under the Hire Purchase Act, 1972, or the Interest Tax Act, 1974. The Accountant Member emphasized that the Tribunal's order should not be recalled, as it would amount to a review, which is not permissible under Section 254(2).

Third Member's Decision:
The Third Member was appointed to resolve the difference of opinion. After careful consideration, the Third Member agreed with the Accountant Member, concluding that Ground No. 5 was disposed of in effect and substance. The Third Member emphasized that the Tribunal's order did not require recall, as the matter was adjudicated holistically, and recalling the order would result in a review, which is beyond the scope of Section 254(2).

Final Order:
In view of the majority decision, the Tribunal dismissed the Miscellaneous Applications filed by the assessee, concluding that Ground No. 5 was effectively adjudicated, and the Tribunal's order did not require recall.