2024 (9) TMI 1504 - AT - Income Tax

Rectification u/s 254 - whether the assessment in a case wherein requisition has been made u/s 132A of the Act, the jurisdiction to complete the assessment is to be governed by the provisions of section 153A of the Act? - HELD THAT - Admittedly, in the present case, on perusal of the order of tribunal it is discernible that the tribunal had considered the submissions of both the parties and have expressed a positive view on the legal contention raised by the assessee. It is also apparent that the contentions raised in the present MA by the department are explained / clarified under an exhaustive submission. We herein may observe that such lengthy contention which needs to be looked into and dealt with under a long-drawn deliberation and debate, therefore, such arguments does not suggest a mistake apparent from record that can be pointed out for rectification invoking the provisions of section 254(2). Further, the prayer of the department to re-call, reinstitute and rehear the present matter would equate to review, which is absolutely not within the purview / powers of Tribunal conferred upon it by the provisions of section 254(2). Regarding the mandate of law which allows the tribunal to deal with miscellaneous application of the appellant, it is to be appreciated that the tribunal is having limited powers to rectify any apparent and glaring mistake on the face of records. The tribunal is not expected to re-hear the entire case on merits or to revisit its earlier order and to deal with the merits on the basis of arguments by the appellant. We reject the MA filed by the department, wherein a request has been made for rehearing / review of the earlier order of the tribunal in the garb of rectification of mistake by way of long drawn process of reasonings and arguments which is neither permissible nor allowed under the provisions of Act. Since the department has squarely failed in point out any mistake apparent from records which calls for rectification within the provisions of section 254(2) in the impugned order of tribunal, thus, in absence of such preconditions to allow an application under section 254(2) which warrants for rectification of Tribunal's order. The lengthy contentions raised by the department in present MA cannot be accepted at this stage, thus, the same are rejected.

Issues Involved:
1. Non-issuance of notice under Section 153A of the Income Tax Act.
2. Applicability of Rule 112F of the Income Tax Rules, 1962.
3. Applicability of CBDT Circular No. 10/2012.
4. Jurisdiction to complete the assessment under Section 153A vs. Section 143(3).
5. Scope and ambit of Section 254(2) of the Income Tax Act for rectification of mistakes.

Issue-wise Detailed Analysis:

1. Non-issuance of notice under Section 153A of the Income Tax Act:
The department argued that the non-issuance of notice under Section 153A was justified as the case fell under the conditions specified in Rule 112F of the Income Tax Rules, 1962. The tribunal had initially observed that the assessment was wrongly framed under Section 143(3) instead of Section 153A. The department contended that this constituted an error apparent from the record, warranting rectification.

2. Applicability of Rule 112F of the Income Tax Rules, 1962:
The department submitted that the provisions of Rule 112F were applicable since the assessee was found in possession of unaccounted cash during a search operation conducted under Section 132A. The search was conducted in the territorial area of an assembly constituency during municipal elections, fulfilling the conditions under Sub-Rules (i) and (ii) of Rule 112F. The tribunal, however, did not consider these provisions in its initial order.

3. Applicability of CBDT Circular No. 10/2012:
The department referred to CBDT Circular No. 10/2012, which specifies that in cases where a search is conducted under Section 132 or a requisition is made under Section 132A, the Assessing Officer is not required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which the search is conducted. The department argued that this circular was not considered by the tribunal, leading to an error in the order.

4. Jurisdiction to complete the assessment under Section 153A vs. Section 143(3):
The department argued that the tribunal erred in holding that the assessment should have been completed under Section 143(3) instead of Section 153A. The department contended that the jurisdiction to complete the assessment was governed by Section 153A due to the requisition made under Section 132A. The tribunal, however, had decided in favor of the assessee, stating that the assessment was wrongly framed under Section 143(3).

5. Scope and ambit of Section 254(2) of the Income Tax Act for rectification of mistakes:
The tribunal emphasized that its powers under Section 254(2) are limited to rectifying any mistake apparent from the record. The tribunal cannot re-hear the entire case on merits or review its earlier order. The department's request for recalling the order and re-hearing the appeal was deemed beyond the scope of Section 254(2). The tribunal cited several judgments, including those from the Hon'ble Apex Court, to support its stance that rectification under Section 254(2) is not equivalent to a review or recall of the order.

Conclusion:
The tribunal concluded that the department's contentions required a long-drawn deliberation and debate, which is not permissible under Section 254(2). The tribunal cannot re-hear the entire case or revisit its earlier order. The department failed to point out any mistake apparent from the record. Therefore, the Miscellaneous Application filed by the department was dismissed. The tribunal's order dated 11.10.2021 in ITA No. 53/RPR/2021 remained unchanged. The order was pronounced in the open court on 23/07/2024.

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