2014 (1) TMI 1535 - AT - Income Tax

Power to review / recall its own order - Eligibility for deduction u/s 80IB - Held that - The Tribunal has remanded the matter to the file of AO for re-examining of details of claim made by the assessee - The Tribunal is a final fact finding authority and in view of Court the order of the Tribunal is correct and conscious decision have been made by them - It is well settled that statutory authority cannot exercise power of review unless such power is expressly conferred - There is no express power of review conferred on this Tribunal. Even otherwise, the scope of review does not extent to re hearing of the case on merit - The Tribunal could not readjudicate the matter under section 254(2) - The scope and ambit of application of section 254(2) is very limited restricted to rectification of the mistakes apparent from the record - Power to rectify a mistake is not equivalent to a power to review or recall the order sought to be rectified - Decided against petitioner.

Summary

Issues:
Rectification of order by Appellate Tribunal ITAT Hyderabad regarding deduction under section 80IB(10) of the Income Tax Act, 1961 for A.Y. 2008-09.

Analysis:

1. Rectification Application by Assessee:
The Miscellaneous Application (MA) filed by the assessee sought rectification in the Tribunal's order dated 22.03.2013 in relation to ITA No. 979/Hyd/2012 for A.Y. 2008-09. The contention was that the Tribunal had erred in remitting the issue back to the Assessing Officer (AO) despite the Development Agreement on record indicating the assessee's eligibility for deduction under section 80IB(10) as a developer.

2. Contentions of Parties:
The assessee's representative argued that the Tribunal's decision was based on a misconception, emphasizing the availability of the Development Agreement supporting the assessee's developer status. On the other hand, the Departmental Representative contended that there was no apparent mistake in the Tribunal's order warranting rectification, asserting that reconsideration of the issue would amount to reviewing the order, which is impermissible.

3. Tribunal's Decision and Rationale:
The Tribunal's order highlighted the need for complete information to determine the assessee's developer or contractor status for granting deduction under section 80IB(10). It directed the AO to re-examine the claim after gathering all necessary material and allowing the assessee to substantiate its deduction claim. The Tribunal's decision was deemed a conscious one, and any dissatisfaction with it required a separate remedy, as considering the argument at this stage would amount to reviewing its own order.

4. Scope of Tribunal's Authority and Review:
The Tribunal's role as the final fact-finding body was underscored, emphasizing limited interference unless based on relevant or irrelevant material considerations. The judgment emphasized that the Tribunal lacked the power of review unless expressly conferred, with the scope of rectification confined to correcting apparent mistakes, not re-hearing the case on merit. Precedents were cited to illustrate the limitations of the Tribunal's power under section 254(2) of the IT Act, emphasizing rectification as distinct from review or recall of orders.

5. Parameters for Rectification under Section 254(2):
The judgment outlined the restricted scope of rectification under section 254(2), emphasizing rectifying manifest errors attributable to the Tribunal's oversight. It clarified that rectification did not extend to recalling or re-arguing the entire matter, as the power was limited to correcting specific mistakes apparent from the record. The ruling highlighted that rectification did not permit the Tribunal to review or reverse its decision on merits beyond the specified scope.

6. Dismissal of Miscellaneous Application:
Based on the defined parameters and considerations, the Tribunal was inclined to dismiss the Miscellaneous Application filed by the assessee, upholding the original order dated 22.03.2013. The final decision was to dismiss the MA, pronounced in open court on 27th January 2014.

In conclusion, the judgment delved into the intricacies of rectification under section 254(2) of the IT Act, emphasizing the Tribunal's limited authority to correct specific errors without revisiting the entire case on its merits. The decision highlighted the importance of adhering to legal principles and precedents in maintaining the integrity of the judicial process.