2018 (12) TMI 886 - HC - Income Tax

Rectification of mistake - Deemed dividend addition u/s 2(22)(e) - grounds which according to the revenue were not considered is with regard to the remand report submitted by the Assessing Officer - Held that - The attempt of the revenue is to re-canvas the points which were raised by them before the Tribunal and in the event if the the revenue is of the opinion that the points raised by them were not properly considered, then the remedy is to file an appeal. On a perusal of the order passed by the Tribunal dated 11.09.2009, more particularly, in paragraph 6, we find that the report filed was noticed by the Tribunal. Thus, we are of the considered view that there is no rectifiable mistake pointed out by the revenue before the Tribunal to exercise its jurisdiction under Sub-section (2) of Section 254 of the Act. Hence, we find that there is no error in the finding of the Tribunal and accordingly, the appeal fails and dismissed. Consequently, the substantial questions of law were answered against the revenue.

Summary

Issues:
1. Dismissal of Miscellaneous Application by the Income Tax Appellate Tribunal.
2. Rectification of mistake in the Tribunal's order.
3. Consideration of grounds raised by the Revenue.

Dismissal of Miscellaneous Application:
The appeal filed by the Revenue under Section 260A of the Income-tax Act, 1961, challenged the order of the Income Tax Appellate Tribunal (ITAT) dated 30.07.2010. The ITAT dismissed the appeal filed by the Revenue, confirming the order passed by the Commissioner of Income Tax (Appeals) deleting the addition made by the Assessing Officer towards deemed dividend under Section 2(22)(e) of the Act. The Revenue filed a miscellaneous application requesting the Tribunal to rectify the mistake in its order, specifically pointing out that certain grounds, including the remand report submitted by the Assessing Officer, were not properly considered. However, the Tribunal rejected the application, stating that there was no error to rectify and that the Revenue was attempting to re-argue the matter. The Court agreed with the Tribunal's decision, noting that the points raised by the Revenue were already considered, and there was no rectifiable mistake identified by the Revenue to warrant the Tribunal's intervention under Section 254(2) of the Act. Therefore, the appeal was dismissed, and the substantial questions of law were answered against the Revenue.

Rectification of Mistake in the Tribunal's Order:
The Revenue contended that the ITAT failed to rectify the mistake of non-consideration of a vital ground of appeal, which they argued was a mistake apparent from the record. The Revenue emphasized that no fresh facts, unavailable before the Tribunal, needed consideration. However, the Tribunal, in its order dated 11.09.2009, had already noticed the report filed by the Revenue. The Court held that the attempt by the Revenue to re-canvas the points previously raised before the Tribunal did not demonstrate any rectifiable mistake. As such, the Court found no error in the Tribunal's decision and upheld the dismissal of the appeal, concluding that the substantial questions of law were answered against the Revenue.

Consideration of Grounds Raised by the Revenue:
The Revenue raised substantial questions of law regarding the dismissal of their appeal by the ITAT. They argued that the Tribunal had not properly considered certain grounds, including the remand report submitted by the Assessing Officer. The Tribunal, in its order, had assigned reasons for confirming the deletion of the addition made by the Assessing Officer, treating it as deemed dividend under Section 2(22)(e) of the Act. The Revenue's attempt to have the Tribunal rectify the alleged mistake in not considering their grounds was rejected, with the Tribunal maintaining that there was no error to rectify. The Court concurred with the Tribunal's decision, emphasizing that the points raised by the Revenue were already addressed, and no rectifiable mistake was identified to warrant a different outcome. Consequently, the appeal was dismissed, and the substantial questions of law were resolved against the Revenue.