2018 (6) TMI 739 - AT - Income Tax

Rectification of mistakes - mistake apparent from record within the meaning of section 254(2) - Held that - The order which can be rectified must be one which has been passed by the Tribunal in an appeal filed u/s 253 - thus relying on the judgment of the Special Bench of Delhi in the case of Shri Padam Prakash (HUF) VERSUS ITO 2011 (1) TMI 226 - ITAT, NEWDELHI order which can be rectified must be one which has been passed by the Tribunal in an appeal filed u/s 253. Thus, we hold that an order rejecting an application for rectification u/s 254(2) cannot be again rectified u/s 254(2) of the Act - Dismiss the Miscellaneous Application of the Revenue - decided against the revenue.

Issues:
1. Rectification of order under section 254(2) of the Income Tax Act, 1961.
2. Permissibility of rectifying a previous Miscellaneous Application.
3. Applicability of section 254(2) in rectifying Tribunal orders.
4. Interpretation of the law regarding rectification of orders passed by the Tribunal.

Analysis:
1. The Revenue filed a Miscellaneous Application seeking rectification of an order dated 15.12.2017, citing a mistake apparent from the record under section 254(2) of the Income Tax Act, 1961. The Revenue contended that the tax effect involved was more than ?10 lakhs, contrary to the earlier order's assessment. However, the Counsel for the assessee argued against rectifying an order passed in another Miscellaneous Application, stating that rectifying a Miscellaneous Application with another Miscellaneous Application is impermissible.

2. The Tribunal examined the legal aspect of rectifying orders under section 254(2) and the permissibility of rectifying a previous Miscellaneous Application. Referring to the judgment of the Special Bench of ITAT, Delhi, it was highlighted that section 254(2) can only be invoked if there is a mistake in the order passed under section 254(1) of the Act. The order to be rectified must be one passed by the Tribunal in an appeal filed under section 253, and an order rejecting an application for rectification under section 254(2) cannot be rectified under the same provision.

3. After considering the arguments and legal precedents, the Tribunal concluded that the Miscellaneous Application filed by the Revenue to rectify the earlier order was not permitted under section 254(2) of the Act. The Tribunal emphasized that to invoke section 254(2), the mistake sought to be rectified must be apparent from the record and can only be made against an order passed by the Tribunal under section 254(1) relating to an appeal filed under section 253. Therefore, the Tribunal dismissed the Revenue's Miscellaneous Application based on the legal interpretation of the relevant provisions.

4. Relying on the judgment of the Special Bench of ITAT Delhi in a similar case, the Tribunal upheld the dismissal of the Revenue's Miscellaneous Application. The Tribunal reiterated that an order rejecting an application for rectification under section 254(2) cannot be rectified again under the same provision. Consequently, the Tribunal dismissed the Revenue's Miscellaneous Application, aligning its decision with the legal principles established in the case law.

In conclusion, the Tribunal's detailed analysis and interpretation of the law regarding the rectification of orders passed by the Tribunal under section 254(2) of the Income Tax Act, 1961, resulted in the dismissal of the Revenue's Miscellaneous Application seeking rectification of an earlier order. The judgment emphasized the specific conditions under which rectification can be sought and applied the legal principles established in relevant case law to reach a conclusive decision.

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