2019 (2) TMI 1665 - AT - Income Tax

Rectification u/s 254 - violation of the provisions of section 255(3) as appeal ought not to have been heard by a Single Member Bench - HELD THAT - Since the income assessed in the hands of assessee was more than ₹ 50 lakhs, the appeal ought not to have been heard by a Single Member Bench. Since the case was heard in violation of the provisions of section 255(3) of the Act, the order of the Tribunal suffers from a mistake apparent on the face of record and the order of the Tribunal dated 12.10.2018 is accordingly recalled. The Registry is directed to fix the case for hearing before the Division Bench in due course. Miscellaneous petition filed by the assessee is allowed.

Summary

Issues:
Violation of provisions of section 255(3) of the Income-tax Act, 1961 by a Single Member Bench.

Analysis:
The judgment pertains to a miscellaneous petition filed by the assessee under section 254(2) of the Income-tax Act, 1961, seeking the recall of the order of the Tribunal dated 12.10.2018 on the grounds of a mistake apparent on the face of the record. The primary contention raised was that the total income assessed by the Assessing Officer (AO) for the assessment year 2015-16 amounted to ?55,91,720, exceeding the threshold of ?50 lakhs specified under section 255(3) of the Act for cases to be heard by a Single Member Bench. Reference was made to legal precedents, including the decision of the Hon'ble Punjab & Haryana High Court and the Hon'ble Supreme Court, to support the argument that the Tribunal's order was not in accordance with the law due to the violation of the statutory provision.

The Tribunal acknowledged that the total income assessed in the case exceeded ?50 lakhs, thereby confirming that the appeal should not have been heard by a Single Member Bench as per the provisions of section 255(3) of the Act. Consequently, the Tribunal concluded that the order suffered from a mistake apparent on the face of the record and decided to recall the order dated 12.10.2018. The case was directed to be fixed for hearing before the Division Bench in compliance with the statutory requirements.

The judgment emphasized that the violation of section 255(3) of the Act was a crucial error leading to the decision to recall the order. As a result of this finding, the Tribunal did not delve into the other contentions raised in the miscellaneous petition. Ultimately, the miscellaneous petition filed by the assessee was allowed, and the decision was pronounced in the open court on 20th February 2019. The judgment highlights the significance of adherence to statutory provisions and the consequences of procedural errors in the adjudication process.