2015 (2) TMI 440 - AT - Income Tax

Rectification of mistake - rectification v/s review - Held that - By the present miscellaneous Application, assessee is seeking a review in the guise of rectification, by criticising the action of the Tribunal, firstly in rejecting its MA and secondly in setting aside the issue relating to determination of the status of the assessee, whether as a developer or as a works contractor, instead of deciding the same by itself. The Tribunal has taken a conscious decision to set aside the matter to the file of the Assessing Officer for redeciding the issue in accordance with its directions, and that course adopted by the Tribunal cannot constitute a mistake susceptible to rectification under S.254(2) of the Act. Similarly, when the Tribunal rejected the earlier application of the assessee under S.254(2) of the Act, it again went into several aspects of the matter raised by the assessee before it, and ultimately rejected the same, holding that what the assessee is seeking is a mere review and not rectification of any mistake apparent from record. Assessee is seeking a mere review of this order of the Tribunal on its earlier application under S.254(2) of the Act. Since such a review, whether in the context of original order dated 22.3.2013 or order in MA dated 27.1.2014 is not permissible in these proceedings for rectification under S.254(2) of the Act, we find no merit in the present application of the assessee, which is accordingly rejected. Maintainability of the present application against the order rejecting the earlier application, and so on, the same has no application to the facts of the present case, in which assessee is merely disputing the conscious view taken by the Tribunal while deciding the appeal, and for other reasons discussed hereinabove. We accordingly reject the present application of the assessee. - Decided against assessee.

Summary

Issues:
Rectification of order by ITAT Hyderabad on the ground of mistakes apparent from the record.

Analysis:
1. The assessee filed a Miscellaneous Application seeking rectification of the ITAT Hyderabad's order dated 27.1.2014 in M.A.No.214/Hyd/2013 arising from the order dated 22.3.2013 in ITA No.917/Hyd/2012, claiming that certain mistakes were apparent from the record.

2. The counsel for the assessee argued that the Tribunal dismissed the earlier MA, stating it was a case of review and not maintainable under section 254(2) of the Income Tax Act. The assessee contended that the present application was maintainable as per the law and cited relevant High Court decisions to support their position.

3. The assessee disputed the dismissal of the earlier MA, emphasizing that the present application was not a review but a rectification under section 254(2) of the Act. They argued that the Tribunal had the inherent power to rectify any miscarriage of justice, citing various legal precedents in support.

4. The Departmental Representative opposed the assessee's submission, stating that there were no mistakes apparent from the record in the Tribunal's orders and that the application was seeking a review without merit.

5. The Tribunal found that the present application was beyond the scope of section 254(2) of the Act, as it was seeking a review of the earlier MA rejection without pointing out any new mistakes. The Tribunal cited relevant provisions of the Act to support its decision.

6. The Tribunal rejected the assessee's argument that the order dated 27.1.2014 merged with the original order dated 22.3.2013, clarifying that only an order passed under section 254(2) rectifying an earlier order merged with the original order. The Tribunal also discussed the maintainability of applications under section 256 of the Act in this context.

7. On the merits of the case, the Tribunal noted that the dispute was whether the assessee was a developer or a works contractor. The Tribunal had set aside the issue to the Assessing Officer for fresh determination, which the assessee disputed. The Tribunal explained its decision-making process and why the application for rectification was not maintainable.

8. The Tribunal rejected the present application of the assessee, stating that seeking a review in the guise of rectification was not permissible under section 254(2) of the Act. The Tribunal analyzed the legal arguments presented by the assessee and found them not applicable to the case at hand.

9. Ultimately, the Tribunal rejected the assessee's application, concluding that it lacked merit and did not meet the requirements for rectification under section 254(2) of the Income Tax Act.

This detailed analysis of the judgment provides a comprehensive understanding of the legal issues involved and the Tribunal's reasoning behind rejecting the assessee's application for rectification.