2019 (9) TMI 1676 - AT - Income Tax

Rectification of mistake - order giving effect to the order of third member u/s 254(1) - HELD THAT - As question no. 1 is decided in terms of the view taken by the Third Member concurring with the Judicial Member. Therefore, the majority view is confirmed. The Miscellaneous Application of the assessee on this issue is allowed. Second question referred to the Third Member , the Third Member has again concurred with the view taken by the Judicial Member as held not following the amended order, particularly when such amended order has been duly brought to the notice of the adjudicating authority/court during the relevant proceedings, definitely constitutes a mistake apparent from record. The factum of the amended order having been brought on the record before the adjudicating authority renders the record of that authority to include the amended order. The amended order thus becomes a part of the record of the adjudicating authority and not following that amended order is none other than a mistake apparent from record. Since the Third Member concurred with the view taken by the Judicial Member, the majority view is confirmed. On this issue also, the Miscellaneous Application of the assessee is allowed. Miscellaneous Application filed by the assessee is allowed.

Summary

Issues:
1. Effect of the order of the Third Member under section 254(1) of ITAT Mumbai.
2. Decision on the first and second questions referred to the Third Member.

Analysis:
1. The judgment dealt with the effect of the order of the Third Member under section 254(1) of ITAT Mumbai. The Third Member, in para 13 of the order, concluded that there was a mistake apparent on record regarding the issue discussed. The majority view confirmed this decision, concurring with the Judicial Member. Consequently, the Miscellaneous Application of the assessee on this issue was allowed, giving effect to the order of the Third Member.

2. Regarding the second question referred to the Third Member, the Third Member, in para 17 of the order, emphasized that when an original order is amended by a subsequent order, the original order becomes inoperative, and the subsequent amendment prevails. Failure to follow the amended order, especially when it has been duly brought to the notice of the adjudicating authority, constitutes a mistake apparent from the record. The Third Member agreed with the Judicial Member's view on this matter as well, leading to the confirmation of the majority view. Consequently, the Miscellaneous Application of the assessee was allowed on this issue too.

In conclusion, the judgment allowed the Miscellaneous Application filed by the assessee, as the Third Member's decisions were upheld and the majority view was confirmed on both questions referred to the Third Member. The order was pronounced in the open court on 27th September 2019.