2014 (1) TMI 1584 - AT - Income Tax

Rectification of mistake - Held that - The Tribunal has given its finding that the machinery in question was never used by the assessee company - It was used only by the sister concern of the assessee company and the assessee was not entitled to claim depreciation on the said machinery - It can be inferred that the Tribunal has not only considered the submissions of the assessee but has given a categorical finding on all of the issues which were raised before the Tribunal by the ld. counsel for the assessee - Neither any new fact nor any law has been brought by the ld. counsel for the assessee which may be said to be escaped the attention of the Tribunal - The other contentions raised by the assessee through this application have already been duly considered and adjudicated in the impugned order - There is no mistake apparent on the record in the said order which may require any rectification - Decided against assessee.

Summary

Issues:
1. Alleged errors in the impugned order causing prejudice to the assessee.
2. Incorrect appreciation of facts by the Tribunal regarding the use of plant and machinery.
3. Observations made by the Tribunal beyond the issues raised by the parties.
4. Claim of mistake apparent on the record and jurisdictional High Court pronouncement.

Analysis:

1. The applicant/assessee moved a miscellaneous application seeking to recall and set aside the impugned order dated 26.06.13, alleging errors causing prejudice. The applicant claimed that the Tribunal did not properly appreciate the arrangement between the applicant and a sister concern, leading to erroneous conclusions. The applicant argued that the plant and machinery were exclusively used for manufacturing garments for export, generating substantial profits. The Tribunal's conclusion that no benefit was obtained by the applicant was disputed, highlighting mistakes in the order.

2. The applicant contended that the plant and machinery were used exclusively for executing export orders, contradicting the Tribunal's finding that the machinery was used by the sister concern and not the applicant. The applicant emphasized that all machinery was meant for the applicant's benefit, challenging the Tribunal's inference. The applicant argued that the Tribunal's conclusion was erroneous and required rectification due to evident mistakes.

3. The Tribunal's observation regarding the affairs of group concerns being "cooked up" to reduce tax incidence was challenged by the applicant. The applicant argued that no adverse material was found during revenue operations, and the Tribunal delved into issues not raised by any party. The applicant asserted that the order needed correction as faults were evident on record, and the applicant was not given an opportunity to address the Tribunal's holding.

4. The applicant relied on case laws to support the claim that wrongful assumptions of fact constituted a mistake apparent on the record. The applicant argued that the Tribunal exceeded its jurisdiction by making observations beyond the issues raised. The applicant also highlighted the Tribunal's failure to consider a jurisdictional High Court pronouncement. However, the Tribunal found that the alleged mistakes did not meet the criteria of a mistake apparent on the record. The Tribunal concluded that the issues raised were related to the factual matrix of the case and had already been adjudicated. The Tribunal dismissed the application, stating that no rectification was required as the impugned order was deemed appropriate.

In conclusion, the Tribunal's decision emphasized the importance of factual findings, jurisdictional limitations, and the need for proper appellate recourse for grievances against orders. The dismissal of the application underscored the Tribunal's stance on rectification criteria and the boundaries of its review under the Income Tax Act.