2012 (10) TMI 330 - HC - Income Tax

Rectification u/s 254(2) - ITAT held no mistake found on record - Held that - The Tribunal has clearly found from the documents in its original order, that the tax was paid on the consignment on 4.4.2001, which falls in the next assessment year. In order to support the application for correction of mistake the appellant did not file the transporter s bill with the Invoice No. 132323, nor filed the Customs Clearance Certificate of the consignment, which according to the appellant, was transported through the bill of the transport company on which it is stated that the tax was paid on 4.4.2001 either in the Tribunal, or even in this appeal. The parameters of powers for correction of mistake and for review are separate and distinct. These have to be exercised in accordance with the law. Thus Tribunal committed no error in recording findings that there was no mistake in its order, which could be corrected under Section 254 (2) - against assessee.

Summary

Issues:
1. Appeal under Section 260-A of the Income Tax Act, 1961 regarding rectification of order by the Income Tax Appellate Tribunal.
2. Alleged substantial questions of law raised by the appellant-assessee regarding rectification and review of the order by the Tribunal.
3. Discrepancy in findings between the CIT (A) and the Tribunal regarding the use of imported machinery for profession before 31.3.2001.

Analysis:
1. The appeal under Section 260-A of the Income Tax Act, 1961 pertained to the order of the Income Tax Appellate Tribunal, Delhi Bench "B", New Delhi, rejecting the appellant's miscellaneous application under Section 254 (2) of the Act. The Tribunal found no mistake in the order requiring correction, dismissing the application as it amounted to a review, not permissible under Section 254 (2) of the Act.

2. The appellant raised three substantial questions of law in the appeal. Firstly, questioning the Tribunal's justification in holding no mistake found on record for rectification under Section 254 (2) of the Act, citing discrepancies in consignment notes and sales tax forms. Secondly, challenging the Tribunal's view that the rectification application was akin to a review of the order, contrary to established legal precedent. Lastly, disputing the Tribunal's refusal to rectify a mistake in the order, which the appellant claimed was apparent on the face of the record.

3. The discrepancy arose from conflicting findings between the CIT (A) and the Tribunal regarding the use of imported machinery before 31.3.2001. While the CIT (A) concluded that the machinery was used for the profession before the specified date based on seized documents, the Tribunal reversed this finding, emphasizing the lack of evidence proving the machinery's use before 31.3.2001. The Tribunal's decision was based on the absence of concrete proof provided by the appellant to support their claim, ultimately allowing the Revenue's appeal.

In conclusion, the High Court dismissed the Income Tax Appeal, stating that the Tribunal did not commit any error in finding no rectifiable mistake in its order under Section 254 (2) of the Act. The Court highlighted the distinction between rectification and review, suggesting that the appellant could have pursued alternative legal avenues if dissatisfied with the Tribunal's decision. The judgment emphasized the importance of complying with legal procedures and presenting substantial evidence to support claims in tax-related matters.