2014 (1) TMI 901 - AT - Income Tax

Recall of order u/s 254(2) of the Act Mistake apparent on the record Held that - Statutory authority cannot exercise power of review unless such power is expressly conferred - There is no express power of review conferred on the Tribunal - the scope of review does not extend to re-hearing of the case on merit as decided in CIT vs. Pearl Woollen Mills 2009 (11) TMI 48 - PUNJAB AND HARYANA HIGH COURT - An order u/s 254(2) does not have existence de hors the order under s. 254(1) - Recalling of the order is not permissible under s. 254(2) - Recalling of an order automatically necessitates rehearing and re-adjudication of the entire subject-matter of appeal - The dispute no longer remains restricted to any mistake sought to be rectified - Power to recall an order is prescribed in terms of Rule 24 of the ITAT Rules 1963 and that too only in case where the assessee shows that it had a reasonable cause for being absent at a time when the appeal was taken up and was decided ex-parte - Judged in the above background the order passed by the Tribunal is indefensible. Relying upon CIT vs. Steal Cast Corporation 1975 (12) TMI 43 - GUJARAT High Court - in the order of appellate authority the ground might not have been dealt with that point and thereby it means that it was impliedly rejected - It is not necessary for the Tribunal to state in its judgement specifically or in express words that it has taken into account the cumulative effect of the circumstances or has considered the totality of the facts as if that were a magic formula - if the judgement of the Tribunal shows that it has done so there is no reason to interfere with the decision of the Tribunal Decided against Assessee.

Summary

Issues:
Rectification of Tribunal order under section 254(2) of the Income Tax Act - Scope and limitations.

Analysis:
The judgment revolves around a Miscellaneous Application (MA) filed by the assessee seeking rectification in the Tribunal's order dated 30th January, 2009. The Tribunal, in a previous MA, had dismissed the application emphasizing that the power to set aside orders lies with the Tribunal, not the CIT (A). The Tribunal's power under section 254(2) is limited to rectifying mistakes apparent from the record and does not extend to reviewing its own orders. The Tribunal rejected the second MA as it was based on the same facts and sought to recall the order, which is impermissible under section 254(2). The judgment cites precedents to establish that the Tribunal cannot recall an order as it would necessitate re-adjudication of the entire appeal. The power to recall an order is provided under Rule 24 of the ITAT Rules, 1963, only in specific circumstances.

The learned AR argued that not giving the assessee another opportunity would violate principles of natural justice. However, the Tribunal held that the scope of application under section 254(2) is limited to rectifying apparent mistakes, not rehearing the entire case. The judgment emphasizes that the power to rectify a mistake does not equate to a power to review or recall the order. The Tribunal's decision is final and cannot be scrutinized sentence by sentence unless the conclusions are deemed perverse. The judgment reiterates that the Tribunal's order under section 254(1) is effective, and any amendment under section 254(2) merges with the original order. The Tribunal's power is restricted to rectifying mistakes evident from the record, ensuring legal certainty and adherence to the rule of law.

In conclusion, the judgment dismisses the MA filed by the assessee, emphasizing the limited scope of the Tribunal's power under section 254(2) to rectify mistakes apparent from the record. The Tribunal cannot recall an order or re-adjudicate the entire appeal, maintaining the finality of its decisions and upholding the principles of natural justice and legal certainty.