2024 (9) TMI 1437 - AT - Income Tax

Rectification u/s 254(2) - second opportunity to the assessee to raise issues which he had omitted to raise at the time of the original appeal - Tribunal omitted to consider that no status is mentioned in the notice issued u/s 148 and as such the re-assessment for the assessment years 2006-07 to 2009-10 was without jurisdiction and liable to be annulled, as it was a patent mistake apparent on the face of record which deserved to be rectified u/s 254(2) HELD THAT - It is fairly clear that none of the issues that are now being agitated in the Misc. Applications were taken up before the ITAT as grounds of appeal in Form 36 or even during the course of arguments before the ITAT during the hearing of ITA 2023 (3) TMI 853 - ITAT ALLAHABAD . Therefore, there was never any occasion for the ITAT to pronounce judgment on any of the issues that are contained in the Misc. Applications filed by the assessee. The provisions of section 254(2) are very clear, in that they exist for rectification of any mistake committed by the ITAT in any order passed by it. They do not exist for rectification of mistakes in orders passed by the AO or ld. CIT(A). The proper recourse of action for the assessee in such cases is to either move rectification application before the lower authorities or to file appeals against their decisions before the next higher authorities, including the ITAT. If the assessee chooses not to agitate any issue before the ITAT during the course of appeal, no mistake would arise in the order of the ITAT, if the ITAT did not adjudicate on such issues. The provision of Misc. Applications u/s 254(2) are also not designed to give a second opportunity to the assessee to raise issues which he had omitted to raise at the time of the original appeal. Nor do the powers of the ITAT extend to revising their orders upon consideration of new facts or points of law. Accordingly, we are in agreement with the views as expressed by the ld. DR. There being no infirmity in the orders of the ITAT and the issues being raised by the assessee in the Misc. Applications having never being raised earlier, are not fit grounds to recall the order passed by the Hon ble ITAT in 2023 (3) TMI 853 - ITAT ALLAHABAD All the Misc. Applications are, therefore, dismissed as non-maintainable.

Summary

Issues:
Challenges to the order of the Income Tax Appellate Tribunal, Allahabad Bench regarding assessment years 2006-07 to 2009-10; jurisdiction of re-assessment; validity of notices under section 148; sanction under section 151 of the Act; rectification under section 254(2) of the Act; scope of section 254(2) in rectifying mistakes by the ITAT; maintainability of Misc. Applications for issues not raised before the ITAT.

Analysis:
The Misc. applications were filed against the ITAT order in the matter of Late Satya Prakash Gupta vs. DCIT, Circle-1, Allahabad, for assessment years 2006-07 to 2009-10. The appellant contended that the re-assessment for these years lacked jurisdiction due to errors in the notice issued under section 148 and the improper conversion of additions under section 69A instead of section 68. The appellant sought rectification under section 254(2) of the Act to annul the re-assessment orders (para 2).

In additional points raised in Misc. Applications, issues regarding the validity of notices under section 148 for assessment years 2006-07 and 2007-08 were highlighted. The appellant argued that the notices were issued beyond the prescribed time limit, rendering the proceedings invalid. The appellant also challenged the mechanical grant of sanction under section 151 of the Act, emphasizing the requirement of proper application of mind. The appellant sought rectification under section 254(2) to annul the re-assessment orders (para 3).

During the hearing, the appellant conceded that the issues raised in the Misc. Applications were not presented before the ITAT during the original appeals. The appellant argued that these were fundamental legal questions justifying their belated submission. The Revenue contended that as the issues were not raised before the ITAT, there was no basis for the ITAT to address them. The Revenue emphasized the limited scope of section 254(2) for rectification and the inability of the ITAT to review its own order based on new issues. The ITAT held that as the issues were not raised earlier, they could not be considered for rectification under section 254(2) (para 4-6).

The ITAT concluded that the issues raised in the Misc. Applications were not brought up during the original appeals before the ITAT and, therefore, could not be rectified under section 254(2). The ITAT dismissed the Misc. Applications as non-maintainable, stating that the provision did not allow for the reconsideration of issues not raised during the original appeal process. The Misc. Applications for assessment years 2006-07 to 2009-10 were consequently dismissed (para 6-7).