2021 (3) TMI 674 - AT - Income Tax

Rectification of mistake u/s 254 - deduction allowed u/s 10A - Tribunal has incorrectly understood the facts relating to unrealized export proceeds within the prescribed time limit and also considered the facts relating to AY 2009-10 for deciding the issue in AY 2008-09 - HELD THAT - Admittedly, the Tribunal has considered the facts relating to AY 2009-10 for deciding the issue urged in AY 2008-09. As submitted that there is no observation in the orders of the tax authorities about non-realisation of export proceeds altogether, as observed by the Tribunal, i.e., it is nobody s case that the assessee did not realize export proceeds at all. According to Ld A.R, Ld CIT(A) observations also meant that the assessee did not realize the amount mentioned above within the prescribed time. Thus, we notice that it is a case of incorrect understanding of facts. In the instant case, it is a case of incorrect understanding of facts. Accordingly, we find merit in the contentions of Ld A.R that incorrect appreciation of facts and consideration of facts relating to AY 2009-10 for deciding the issue in AY 2008-09 has resulted in a mistake apparent from record in respect of this issue in AY 2008- 09. Identical type of mistake has been pointed out by the assessee in AY 2009-10 also. What was pointed out by the AO was that the export proceeds were not realized within the time prescribed in sec.10A of the Act. Accordingly, following our decision rendered in AY 2008-09, we hold that there is mistake apparent from record in AY 2009-10 also on this issue, as there is incorrect appreciation of facts. As noticed earlier that the jurisdictional Hon ble Karnataka High Court has held in the case of Mcdowell Co. Ltd 2008 (3) TMI 301 - KARNATAKA HIGH COURT that the case of erroneous application of law/provisions will fall outside the scope of sec.254(2) of the Act. The assessee has contended that there is erroneous application of law/provisions of the Act. Hence this plea raised by the assessee in both the years would fall outside the scope of sec.254(2) of the Act. Accordingly, we reject this plea of the assessee in both the years. We recall the orders passed by Tribunal in AY 2008-09 and 2009-10 for the limited purpose of adjudicating the Ground No.1 in both assessment year 2008-09 and AY 2009-10.

Summary

Issues involved:
1. Mistakes apparent from record in the order dated 03.06.2020 passed by the Tribunal in ITA No.2830/Del/2013 & 2831/Del/2013 for assessment years 2008-09 & 2009-10.
2. Deduction allowed under section 10A of the Income-tax Act, 1961.
3. Admissibility of certain grounds raised by the assessee.
4. Tribunal's power to rectify mistakes apparent from the record.

Analysis:
1. The assessee filed miscellaneous applications pointing out mistakes in the Tribunal's order for AY 2008-09 & 2009-10. The first issue revolved around the deduction allowed under section 10A of the Act. The Tribunal reduced the export turnover by a specific amount due to non-realization within the prescribed time limit, which the assessee disputed. The assessee argued that the Tribunal misunderstood the facts and considered AY 2009-10 observations incorrectly. The Tribunal's decision was influenced by facts of the succeeding year, leading to an incorrect appreciation of the issue.

2. The Tribunal's consideration of AY 2009-10 facts for AY 2008-09 issue was deemed a mistake apparent from the record. The Tribunal's decision was based on an incorrect understanding of the facts regarding unrealized export proceeds within the time limit. The assessee contended that the issue was fully covered by previous Tribunal orders and a decision by the Karnataka High Court, making the Tribunal's decision inapplicable due to the misinterpretation of facts.

3. Another issue raised was the admissibility of certain grounds by the assessee. The Tribunal declined to admit specific grounds, stating they did not arise from the CIT(A)'s order. The assessee argued that the Tribunal's decision was erroneous and requested the admission of these grounds. However, the Tribunal held that such issues fell outside the scope of rectification under section 254(2) of the Act, based on the decision of the Hon'ble Karnataka High Court.

4. The Tribunal's power to rectify mistakes apparent from the record was also discussed. The Tribunal recalled its orders for AY 2008-09 and 2009-10 to adjudicate specific grounds. The Tribunal partially allowed the miscellaneous applications, emphasizing the limitations on rectification powers and the need to adhere to legal principles and precedents.

In conclusion, the judgment addressed the errors in the Tribunal's order, specifically regarding the deduction under section 10A, the consideration of facts from a different assessment year, the admissibility of certain grounds, and the scope of rectification powers under the Income-tax Act. The detailed analysis highlighted the legal arguments presented by both parties and the Tribunal's decision based on the interpretation of relevant laws and precedents.