2012 (7) TMI 454 - AT - Income Tax

Recalling of order - Rectification of mistake Held that - Tribunal s power under section 254(2) is not to review its earlier order but only to amend it with a view to rectifying any error apparent from the record. The power of rectification under section 254(2) of the Income-tax Act can be exercised only when the mistake which is sought to be rectified is an obvious and patent mistake which is apparent from the record, and not a mistake which requires to be established by arguments and a long drawn process of reasoning on points on which there may conceivably be two opinion - recalling of the orders of the Tribunal for the AYs 1999-00 to 2007-08 for re-adjudicating the issue in question afresh, as prayed in the Misc. applications would tantamount to review/revision of the order of the Tribunal, which is not permissible in law - no any merit in the present Misc. applications and as such, the Misc. applications filed by the assessee are dismissed

Issues Involved:

1. Filing of Miscellaneous Applications beyond the limitation period.
2. Disallowance towards charges on leasehold land for the lease period expired.
3. Alleged mistakes apparent from the record and requests for rectification under Section 254(2) of the Income Tax Act, 1961.

Issue-wise Detailed Analysis:

1. Filing of Miscellaneous Applications beyond the limitation period:

The assessee filed Miscellaneous Applications Nos. 42 to 47/CTK/2010 on 30.12.2011. The Tribunal's consolidated order, which the assessee challenged, was received on 28.12.2005. Section 254(2) of the Income Tax Act, 1961 mandates that any rectification request must be filed within four years from the date of the order. Since these applications were filed beyond the four-year limitation period without any petition for condonation of delay, they were dismissed as being time-barred.

2. Disallowance towards charges on leasehold land for the lease period expired:

In Miscellaneous Applications Nos. 48 to 56/CTK/2010, the assessee contended that the Tribunal's dismissal of claims related to disallowance towards charges on leasehold land was based on misconceived facts and incorrect appreciation of facts. The Tribunal had previously ruled that the expenditure incurred for the lease of land with the right to exploit mineral resources is a capital expenditure and not allowable as revenue expenditure. The Tribunal followed its earlier orders and various judicial pronouncements to uphold this view. The assessee argued that the land should be considered a commercial asset and that the depreciation should be allowed, especially since the land's value depreciates over time due to mining activities. However, the Tribunal maintained that the expenditure for acquiring the right to exploit the land is capital in nature and not allowable for computation of taxable income.

3. Alleged mistakes apparent from the record and requests for rectification under Section 254(2) of the Income Tax Act, 1961:

The assessee sought rectification of the Tribunal's consolidated order dated 30.11.2005, which had been followed in subsequent assessment years. The Tribunal observed that the Miscellaneous Applications seeking re-adjudication of the issue by recalling the consolidated order were dismissed as being barred by limitation. The Tribunal emphasized that under Section 254(2) of the Income Tax Act, the power to rectify is limited to correcting mistakes apparent from the record and does not extend to reviewing or revising its own orders. The Tribunal cited various judicial authorities, including the Supreme Court's decision in T.S. Balaram, ITO v. Volkart Brothers, which clarified that a mistake apparent on the record must be an obvious and patent mistake, not one that requires a long-drawn process of reasoning. Consequently, the Tribunal concluded that the assessee's request for re-adjudication amounted to a review of its own order, which is not permissible under the law. Therefore, the Miscellaneous Applications filed by the assessee were dismissed.

Conclusion:

In conclusion, all the Miscellaneous Applications filed by the assessee were dismissed. The applications filed beyond the limitation period were dismissed as time-barred, and the requests for rectification of alleged mistakes were dismissed as they amounted to a review of the Tribunal's own orders, which is not permissible under Section 254(2) of the Income Tax Act, 1961.

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