2011 (11) TMI 416 - AT - Income Tax

Addition u/s 69A - An employee earning a meagre salary of Rs. 6000/- per month was thus assessed to tax for the said goods amounting to Rs. 63.64 lakhs vide the impugned order - the sales-tax authorities had also treated it as representing the concealed turnover of PGPL which the tribunal dismissed as of little consequence stating that the scope of the two enactments was vastly different - The ld. AR in rejoinder would submit that his petition or prayer may not be considered as an application u/s. 254(2) but one seeking invocation by the tribunal of its inherent power to address a wrong caused by it - . The tribunal did not and possibly cannot; the hearing being conducted in an open transparent manner stop any party from advancing any argument or raising any claim i.e. qua the appeal being heard - it is not a case where any lengthy arguments were made; the ld. AR by his own admission having relied on the order of the first appellate authority and the assessee s paper-book (PB) and which stands faithfully recorded at para 3 of the tribunal s order - It is not even a case where a particular argument or fact has been omitted to be considered by the tribunal even as the higher courts of law have held the same unless it goes to the root of the matter as not entitling for a rectification and/or a recall A substantial part of the assessee s case was that he being only an employee of PGPL whose goods he was carrying no addition in its respect i.e. even assuming the same as not suitably explained could be made in his hands so that the assessment if at all could be made only in the hands of his employer PGPL - The tribunal in applying the law is in fact duty bound to do so and accordingly rightly and rightfully did so - Decided against the assessee

Issues Involved:
1. Recall of the Tribunal's Order under Section 254(2) of the Income-tax Act.
2. Alleged violation of the principles of natural justice.
3. Tribunal's reliance on case law not cited by either party.
4. Queries raised by the Tribunal not posed to the assessee.
5. Tribunal's post-hearing exercise.

Issue-wise Detailed Analysis:

1. Recall of the Tribunal's Order under Section 254(2) of the Income-tax Act:
The Tribunal addressed the scope of its powers to recall an order under Section 254(2) of the Income-tax Act, 1961. The Tribunal emphasized that the circumstances for exercising this power are specified in Rule 24 of the Income Tax Rules, 1963, which allows for recall only if an ex parte order was passed due to the appellant's non-appearance. In this case, both parties were heard, and thus, Rule 24 was deemed inapplicable. The Tribunal cited the case of CIT v. ITAT [1992] 196 ITR 683 (Orissa) to underline that recalling an order under Section 254(2) is impermissible unless there is a patent mistake or wrong committed by the Tribunal.

2. Alleged Violation of the Principles of Natural Justice:
The assessee argued that the hearing did not follow a fair procedure, claiming that the Tribunal's order was pronounced seven months after the original hearing and included post-hearing exercises. The Tribunal countered that both parties were given adequate opportunities to present their cases, and the delay was not prejudicial. The Tribunal also noted that the assessee did not point out any specific argument or fact omitted from consideration that would entitle them to rectification or recall.

3. Tribunal's Reliance on Case Law Not Cited by Either Party:
The assessee contended that the Tribunal relied on case law not cited by either party. The Tribunal clarified that it is duty-bound to apply established case law to settle the matter, regardless of whether it was cited by the parties. The Tribunal referenced relevant provisions and settled law to address the issues at hand, particularly the applicability of Section 69A of the Act, and found the reliance on case law to be appropriate and necessary.

4. Queries Raised by the Tribunal Not Posed to the Assessee:
The assessee claimed that the Tribunal raised several queries in its order that were not posed during the hearing, thereby prejudicing their case. The Tribunal responded that the queries were relevant and arose from the material on record. The Tribunal emphasized that the assessee did not point out any specific query that was irrelevant or adequately addressed by the existing material. The Tribunal's queries were deemed necessary to highlight gaps and deficiencies in the assessee's explanation.

5. Tribunal's Post-Hearing Exercise:
The assessee argued that the Tribunal's order was largely a post-hearing exercise. The Tribunal defended this by stating that a thorough post-hearing analysis is essential for issuing a speaking order. The Tribunal explained that detailed consideration of evidence and arguments is necessary to provide coherent and systematic findings, which cannot be completed during the hearing itself.

Conclusion:
The Tribunal concluded that there was no valid reason to recall its order, as the assessee's claims did not demonstrate any patent mistake or wrong that would warrant such action. The miscellaneous application filed by the assessee was dismissed.

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