2020 (2) TMI 1445 - AT - Income Tax

Rectification of mistake u/s 254 - allowability of prior period expenses - Tribunal has not dealt with the propositions canvassed by the assessee as well as the ratio laid down in the decision relied upon - HELD THAT - As rightly observed by assessee the Tribunal did not follow the decision of the Hon ble Jurisdictional High Court in case of Nagri Mills co. Ltd. 1957 (9) TMI 30 - BOMBAY HIGH COURT on the reasoning that the said decision has been treated as overruled by the Hon ble Allahabad High Court in another decision. We fully agree with the submissions of leaned Sr. Counsel for the assessee that the decision of the Hon ble Jurisdictional High Court will get precedence over the decision of the non Jurisdictional High Court on similar issue hence would be binding on all subordinate Courts and Tribunal within the territorial jurisdiction of the Jurisdictional High Court. After perusing the appeal order passed by the Tribunal and all other facts and materials available on record we are of the view that while deciding the issue relating to allowability of prior period expenses the Tribunal has not dealt with various propositions canvassed on behalf of the assessee as well as has not appreciated / taken note of the ratio laid down in various judicial precedents cited by the assessee. Thus non consideration of various propositions canvassed by the assessee as well as case laws cited including the decision of the Hon ble Jurisdictional High Court constitute mistake apparent on the face of record hence comes within the purview of section 254(2) - Misc. application allowed.

Summary

Issues involved:
Rectification of order related to allowability of prior period expenses in ITA appeals.

Analysis:
In this case, the assessee sought rectification of the order dated 30th September 2015, passed in ITA appeals related to the allowability of prior period expenses. The leaned Sr. Counsel for the assessee argued that the Tribunal did not properly appreciate the propositions and case laws cited by the assessee. Specifically, it was highlighted that the Tribunal did not follow the decision of the Jurisdictional High Court and overlooked important judicial precedents. The learned Departmental Representative opposed the contentions, stating that the appeal order did not contain any apparent mistakes. Upon considering the submissions, the Tribunal noted that the order failed to address the propositions raised by the assessee and did not properly consider the judicial precedents cited. It was observed that the Tribunal did not give due regard to the decision of the Jurisdictional High Court, which should have taken precedence over decisions from non-Jurisdictional High Courts. Consequently, the Tribunal concluded that there was a mistake apparent on the face of the record and decided to recall the order for deciding the relevant grounds afresh. The order was recalled only concerning the specific grounds related to the allowability of prior period expenses in the ITA appeals.

This detailed analysis of the judgment showcases the issues involved, the arguments presented by both parties, and the Tribunal's decision to recall the order based on the failure to consider important legal principles and precedents.