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2017 (3) TMI 1240 - HC - Income TaxRecall of orders - rectification of mistake - Held that - Tribunal is a creature of the statute and therefore, it can exercise only those powers, which are specifically conferred upon it. The Tribunal, to our minds, has no inherent power to recall judicial orders. Besides the aforesaid, in our opinion, a clear perusal of Section 254 (2) of the Act, would show that the Tribunal has been vested with the power, to rectify any mistake apparent from the record, both on its own, and also, when a mistake is brought to its notice, either by the assessee or the Revenue. In both cases, the limitation prescribed under the said Section would apply. The first proviso clearly indicates, that any amendment made to the order which has the effect of enhancing an assessment or reducing a refund or increasing the liability of the Assessee, shall not be made, under the said sub-section, i.e., sub-section (2) of Section 254 of the Act, unless the Tribunal, gives notice to the Assessee, of its intention to do so and allows the Assessee, a reasonable opportunity of being heard. Clearly, the recall of orders dated 20.08.2007 and 21.01.2008, could have the effect of enhancing the liability of the Assessee.The Tribunal, therefore, to our minds, was required to issue notice to the assessee, before recalling its orders dated 20.08.2007 and 21.01.2008.Thus, for all these reasons, we are of the view that the order dated 31.07.2015, need not be disturbed.
Issues:
1. Tribunal's recall of its earlier orders without notice to the Assessee. 2. Jurisdiction of the Tribunal to recall orders beyond the prescribed period of limitation. 3. Applicability of Section 254(2) of the Income Tax Act regarding rectification of mistakes. 4. The Tribunal's power to exercise suo motu powers in recalling orders. 5. Compliance with principles of natural justice in Tribunal's proceedings. Analysis: Issue 1: Tribunal's recall of its earlier orders without notice to the Assessee The Tribunal recalled its orders dated 20.08.2007 and 21.01.2008 suo motu on 18.04.2013, causing prejudice to the Assessee. The Assessee argued that the Tribunal's order was passed in breach of natural justice principles. The Tribunal, in its judgment dated 31.07.2015, allowed the Assessee's miscellaneous petitions for recall, correcting the procedural error. Issue 2: Jurisdiction of the Tribunal to recall orders beyond the prescribed period of limitation The Tribunal's recall of orders dated 20.08.2007 and 21.01.2008 was challenged by the Revenue, arguing that the Tribunal exceeded its jurisdiction by recalling the orders beyond the limitation period under Section 254(2) of the Act. The Court held that the Tribunal could not entertain the Revenue's petitions filed on 15.01.2013 as they were time-barred. Issue 3: Applicability of Section 254(2) of the Income Tax Act regarding rectification of mistakes The Court emphasized that the Tribunal's power to rectify mistakes under Section 254(2) of the Act applies within the prescribed period of limitation, whether triggered suo motu or by an application from the parties. The Court referenced relevant case laws to support the statutory limitations on the Tribunal's powers. Issue 4: The Tribunal's power to exercise suo motu powers in recalling orders The Court rejected the argument that the Tribunal could exercise suo motu powers beyond the limitation period. It clarified that the Tribunal, being a statutory body, could only exercise powers explicitly conferred by law and not inherent powers to recall orders. Issue 5: Compliance with principles of natural justice in Tribunal's proceedings The Court upheld the Tribunal's judgment dated 31.07.2015, noting a procedural infraction regarding the lack of formal orders on the Revenue's miscellaneous petitions. However, the Court found that this did not impact the validity of the judgment as the petitions were time-barred under Section 254(2) of the Act. In conclusion, the Court dismissed the appeals, affirming the Tribunal's judgment dated 31.07.2015. The Court highlighted the importance of adhering to statutory limitations and principles of natural justice in Tribunal proceedings, ensuring fair and lawful outcomes in tax matters.
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