2016 (7) TMI 25 - AT - Income Tax

Rectification of mistake u/s 254(2) - Addition to income - assessee has offered an additional income of ₹ 15 lakhs over and above of his regular income - Tribunal found that the methodology followed by the assessee is not appropriate and reversed the findings of the CIT(Appeals) and restored that of the AO. Therefore, he requested that the above order of the Tribunal may be recalled/rectified. - Held that - The power to rectify a mistake under section 254(2) cannot be used for recalling the entire order. No power of review has been given to the Tribunal under the I T Act. Thus, what it could not do directly could not be allowed to be done indirectly. A person cannot say at one time one thing and then turn around to suit his needs. The assessee with sole intention to go out of offer made by the assessee claimed additional expenditure, which is not as per the statement recorded during the survey u/s.133A of the Act. However, considering the modus operandi followed by the assessee, the Tribunal has taken serious objection and reversed the order of the CIT(Appeals) and confirmed the addition of ₹ 15 lakhs. In our opinion, the judgment of the Jurisdictional High Court in the case of Ramanlal Kamdar v. CIT (1976 (12) TMI 52 - MADRAS High Court ), wherein it was held that once the assessee accepts certain addition before authorities, he cannot be said to be aggrieved by that addition and cannot appeal against it before the appellate authorities. - Decided against assessee

Summary

Issues Involved:
1. Recall of Tribunal order regarding deletion of addition of Rs. 15 lakhs by CIT(A).
2. Double addition claim by the assessee.
3. Power of Tribunal to recall order under section 254(2) of the IT Act.

Issue 1: Recall of Tribunal order regarding deletion of addition of Rs. 15 lakhs by CIT(A):
The assessee sought a recall of the Tribunal order in ITA No.1222/Mds/2015 dated 12.2.2014, which pertained to the deletion of an addition of Rs. 15 lakhs by the CIT(A). The Assessing Officer highlighted discrepancies in the assessee's income declaration post a survey, emphasizing that the assessee inflated expenditures to offset the additional income declared during the survey. The Tribunal noted that the CIT(A) did not adequately consider the Assessing Officer's detailed findings and reversed the deletion of the Rs. 15 lakhs addition, stating that the assessee manipulated expenditure claims to nullify the effect of the additional income. The Tribunal concluded that the addition of Rs. 15 lakhs was justified, directing the Assessing Officer to revise the assessment, thereby allowing the appeal filed by the Revenue.

Issue 2: Double addition claim by the assessee:
The assessee argued that sustaining the addition of Rs. 15 lakhs would result in double addition as the same amount was already included in the income computation for the assessment year 2008-09. The assessee contended that the CIT(A) had correctly deleted the addition, considering that the amount had been accounted for in the profit and loss account. However, the Tribunal disagreed, stating that the methodology employed by the assessee was inappropriate, leading to the restoration of the Assessing Officer's findings. The Tribunal emphasized that the assessee's attempt to offset the declared additional income by claiming further expenditure was not acceptable, ultimately rejecting the plea to recall the order.

Issue 3: Power of Tribunal to recall order under section 254(2) of the IT Act:
The Tribunal addressed the assessee's request to re-argue the settled issue, highlighting that such a request would amount to a review of the Tribunal's earlier order, for which the Tribunal lacked the power. Citing legal precedents, the Tribunal emphasized that statutory authorities, including the Tribunal, cannot exercise review powers unless expressly conferred. The Tribunal clarified that the scope of review did not extend to re-hearing the case on merit, emphasizing that the power to rectify mistakes under section 254(2) was limited to correcting errors apparent from the record. The Tribunal rejected the assessee's application, upholding the original order and dismissing the request for a recall.

In conclusion, the Tribunal's judgment upheld the addition of Rs. 15 lakhs, rejected the claim of double addition by the assessee, and emphasized the limited scope of the Tribunal's power to recall orders under the IT Act. The decision underscored the importance of maintaining consistency in income declarations and expenditures, ultimately affirming the Assessing Officer's findings and dismissing the assessee's plea for a recall.