2013 (12) TMI 474 - AT - Income Tax

Application u/s 254(2) for rectification of order Mistakes apparent from record observed Held that - The assessee was suffering from financial stringency - The assessee has not been disputed this matter either in the grounds of appeal or in the course of appeal hearing, and it is too late in the day for the assessee to claim that there was no violation in terms of S.249(4) The assessee has admitted that there was shortfall in the payment of admitted and undisputed tax to the extent of Rs.93 lakhs The appeal of the assessee is devoid of merit Decided against assessee.

Summary

Issues: Rectification/recall of order under S.254(2) of the Income-tax Act, 1961 regarding shortfall in payment of admitted taxes on returned income.

Issue 1: Rectification/Recall of Tribunal Order
The applicant sought rectification/recall of the Tribunal's order dated 10.10.2012 in ITA No.363/Hyd/2012 under S.254(2) of the Income-tax Act, 1961, citing mistakes apparent from the record. The appeal was dismissed, upholding the CIT(A)'s decision due to a shortfall in the payment of admitted taxes on the returned income. The applicant contended that certain mistakes had crept into the order, specifically related to the total admitted tax payable and the payments made towards taxes at different stages.

Issue 2: Shortfall in Payment of Admitted Taxes
The applicant argued that there was no shortfall in the payment of admitted taxes on the date of the appeal hearing. The contention was based on the detailed breakdown of tax payments made by the applicant, totaling Rs.4,53,11,573 by the date of the application. However, the Tribunal noted that there was an admitted shortfall in the payment of admitted and undisputed tax, as confirmed by the CIT(A) and the applicant's representative. The applicant's plea that there was no violation under S.249(4) of the Act was dismissed, as the financial stringency and the ongoing efforts to clear the outstanding tax balance were acknowledged by the CIT(A) during the appellate proceedings.

Issue 3: Adherence to Legal Provisions
The Tribunal emphasized that the rectification proceedings under S.254(2) were limited to determining the existence of any mistake apparent from the record in the Tribunal's order. The Tribunal found that the decisions cited by the applicant's counsel were irrelevant to the rectification process, as they pertained to the case's merits rather than the existence of a mistake in the Tribunal's order. Consequently, the Tribunal concluded that the applicant's rectification application lacked merit and rejected it accordingly.

In conclusion, the Tribunal upheld the original order dismissing the appeal due to the shortfall in the payment of admitted taxes on the returned income, as the applicant failed to demonstrate any mistake apparent from the record warranting rectification.