2007 (7) TMI 234 - HC - Income Tax

Rectification application of revenue dismissed by tribunal - Tribunal rejected the miscellaneous petition on the ground that, Revenue failed to produce any evidence that the notice for reassessment was issued within the period of one year- In the absence of such evidence it was held that the assessment framed was invalid in law - Tribunal concluded that there was no mistake apparent from the record to be rectified order of tribunal was justified - no question of law arise for consideration

Summary

Issues:
1. Validity of the notice issued by the assessing officer.
2. Dismissal of the Miscellaneous Petition filed by the Revenue by the Income Tax Appellate Tribunal.
3. Rectification of mistake apparent on the face of the record.

Issue 1: Validity of the notice issued by the assessing officer
The case involves an assessment order passed under Section 143(3) read with Section 147 of the Income Tax Act for the assessment year 1992-93. The assessing officer determined the taxable turnover of the assessee, a dealer in forest produce, at Rs.1,52,080/- as opposed to the returned income of Rs.31,080/-. The assessee appealed the assessment order before the Commissioner of Income-Tax (Appeals), who dismissed the appeal. Subsequently, the Income Tax Appellate Tribunal allowed the appeal, citing the invalidity of the notice issued by the assessing officer. The Tribunal based its decision on the lack of evidence presented by the Revenue regarding the timely issuance and service of the notice to the assessee. The Tribunal concluded that the assessment was invalid due to the absence of such evidence.

Issue 2: Dismissal of the Miscellaneous Petition filed by the Revenue
The Revenue, instead of filing an appeal, submitted a miscellaneous petition under Section 254 of the Income Tax Act before the Income Tax Appellate Tribunal seeking rectification of the alleged mistake apparent on the face of the record. However, the Tribunal dismissed the petition, emphasizing that there was no mistake evident on the face of the record. The Tribunal's decision was based on the principle that a mistake apparent is one that is evident without the introduction of fresh materials. As the Revenue failed to provide evidence during the original appeal proceedings to support their case, the Tribunal found no grounds for rectification.

Issue 3: Rectification of mistake apparent on the face of the record
The High Court, upon review, upheld the Tribunal's decision, stating that the Revenue had not produced any material to substantiate their claim that the notice had been served on the assessee within the required timeframe. The Court reiterated the legal principle that a mistake apparent must be evident from the existing record and cannot be based on new evidence. As the Revenue failed to meet the burden of proof regarding the notice's timely service, the Court concluded that the appeal raised no question of law and dismissed the Tax Case Appeal.

In conclusion, the High Court dismissed the appeal as the Revenue failed to demonstrate the validity of the notice served to the assessee within the required timeframe, thereby upholding the Tribunal's decision regarding the dismissal of the Miscellaneous Petition.