1985 (4) TMI 104 - AT - Income Tax

Summary

Issues:
1. Rectification of appellate order based on alleged misunderstanding of observations made during the hearing.
2. Whether the Tribunal has the power to review its order under section 254(2) of the Income-tax Act, 1961.

Analysis:
1. The appellate order rejected a deduction claimed as interest paid on borrowed monies by the assessee. A miscellaneous application was filed, alleging that the counsel did not present full arguments due to a misunderstanding of observations made by the Judicial Member during the hearing. The Judicial Member expressed doubts about the conclusion and recommended giving the assessee another opportunity to address further arguments. The Accountant Member, however, believed that full arguments were presented, and there was no apparent mistake in the order. The Tribunal noted that while there was a misunderstanding, it did not constitute a mistake justifying the order's recall. The matter was discussed extensively, and the Third Member agreed with the Accountant Member, concluding that the order should not be recalled.

2. The Tribunal does not have the power to review its order unless there are glaring and obvious mistakes of facts or law. The Members agreed that any observations made during the hearing were tentative, and the counsel was not prevented from presenting full arguments. The disagreement between the Members on whether full arguments were advanced did not warrant recalling the order. The Third Member concurred with the Accountant Member that the circumstances did not justify recalling the order. The order was to be decided by the Bench according to the majority view, emphasizing that recalling the order was not warranted under section 254(2) of the Income-tax Act, 1961.