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2021 (8) TMI 1085 - AT - Income TaxRectification of mistake u/s 254 - grievance of the Revenue is that the Tribunal has granted relief to the assessee and there are factual inconsistencies in the order of Tribunal and there is enough material on records in the form of inventory of Stock Cash found during the course of survey which has escaped the notice of Tribunal while passing the order - HELD THAT - Power of rectification u/s 254(2) of the Act can be exercised only when the mistake which is sought to be rectified is an obvious and patent mistake which is apparent from record and not a mistake which requires to be established by arguments and long drawn process of reasoning. Tribunal cannot exercise its power of rectification, look into some other circumstances which would support or not support its conclusion so arrived at. The mistake which the Tribunal is entitled to correct is not an error of judgment but a mistake which is apparent from record itself. Failure of the Tribunal to consider an argument advanced by either party for arriving at a conclusion, is not an error apparent on the record, although it may be an error of judgment. It has further held that in the grab of an application for rectification it is not permissible to the parties to reopen and reargue the whole matter. Hon ble Kerala High Court in the case of P.T. Manuel and Sons 2021 (3) TMI 435 - KERALA HIGH COURT has held that the power of rectification is not akin to that of appeal or even a review. It has further held that merely because there is a wrong or erroneous order or a wrong appreciation of facts, the same cannot be grounds for rectification though they could be grounds for appeal. In view of the aforesaid facts and following the decisions cited hereinabove, we are of the view that since the Revenue has filed to point out any mistake apparent from record in the order as contemplated u/s 254(2) of the Act, we are not inclined to recall order - Misc. Application of the Revenue is dismissed.
Issues:
1. Timeliness of filing the Miscellaneous Application (MA) by the Revenue under section 254(2) of the Income Tax Act, 1961. 2. Permissibility of rectification of an order by the Tribunal. 3. Criteria for rectification under section 254(2) of the Act. 4. Scope of rectification powers of the Tribunal. 5. Precedents related to rectification of orders by the Tribunal. Issue 1: Timeliness of filing the Miscellaneous Application (MA) The Revenue filed a Miscellaneous Application (MA) under section 254(2) of the Income Tax Act against the Tribunal's order dated 19.10.2016 for A.Y. 2010-11. The Assessee contended that the MA was filed beyond the prescribed time limit, as per Section 254(2) of the Act, which required the MA to be filed on or before 30th April 2017. The Assessee argued that the MA filed on 24.05.2017 was barred by limitation, seeking dismissal of the MA on this ground. Issue 2: Permissibility of rectification of an order by the Tribunal The Tribunal considered whether the MA filed by the Revenue was seeking a review of the order passed by the Tribunal, which is impermissible under the Act. The Assessee argued that there was no apparent mistake in the Tribunal's order, and the Revenue was attempting to review the decision through the MA. The Tribunal analyzed the permissibility of rectification under section 254(2) of the Act in this context. Issue 3: Criteria for rectification under section 254(2) of the Act The Tribunal deliberated on the criteria for rectification under section 254(2) of the Act. It emphasized that the power of rectification could only be exercised for obvious and patent mistakes apparent from the record. The Tribunal referred to legal precedents that highlighted the distinction between errors of judgment and mistakes apparent from the record, emphasizing that rectification was not a means to review the entire matter or reargue the case. Issue 4: Scope of rectification powers of the Tribunal The Tribunal discussed the scope of the rectification powers vested in it under section 254(2) of the Act. It noted that the Tribunal could rectify only mistakes that were apparent from the record itself, without delving into circumstances that would support or challenge its conclusion. The Tribunal cited judgments to support the limited scope of rectification powers and reiterated that rectification was not akin to an appeal or review process. Issue 5: Precedents related to rectification of orders by the Tribunal In its analysis, the Tribunal referred to various legal precedents to elucidate the principles governing the rectification of orders by the Tribunal. Citing cases from different High Courts, the Tribunal emphasized that rectification was not a tool for correcting erroneous orders or factual misapprehensions but was limited to rectifying mistakes that were evident from the record. The Tribunal, based on the legal precedents cited, concluded that since the Revenue failed to demonstrate any mistake apparent from the record in the order, the MA was dismissed. This detailed analysis of the judgment covers the issues involved comprehensively, providing insights into the legal principles and precedents considered by the Tribunal in arriving at its decision.
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