2012 (10) TMI 325 - HC - Income Tax

Scope of powers of Tribunal - Recalling of order - rectification - Held that - The power of recall cannot be exercised in substitution to the powers of review or rectification of mistake. In the present case, it is found that there is no indication in the order dated 30.5.2008 that any ground, other than the grounds considered by the Tribunal, was pressed. - The Tribunal erred in law in recalling its order on the pretext of rectifying the mistake, and permitting itself to rehear the matter as if it was exercising the power of appeal over its own judgment - in favour of revenue.

Summary

Issues Involved:
1. Recall of order by the Income Tax Appellate Tribunal under Section 254(2) of the Income Tax Act, 1961.
2. Consideration of grounds not adjudicated by the Tribunal in the original order.
3. Jurisdiction of the Income Tax Officer to make additions without rejecting account books.
4. Scope of powers of the Tribunal in deciding on issues not raised by the assessee.
5. Legal principles governing the powers of review, rectification, and recall by judicial or quasi-judicial authorities.

Issue 1: Recall of order by the Income Tax Appellate Tribunal
The Income Tax Appellate Tribunal recalled its order dated 30.5.2008 under Section 254(2) of the Income Tax Act, 1961, based on a miscellaneous application filed by the assessee. The Tribunal allowed the recall application to a limited extent to consider a specific ground that had not been adjudicated in the original order.

Issue 2: Consideration of grounds not adjudicated by the Tribunal
The Tribunal was approached to reconsider ground no. 2, which questioned the assessment made by the Income Tax Officer without rejecting the account books under Section 145(3). The Tribunal acknowledged that this ground had not been adjudicated and decided to recall the order for a fresh hearing on this limited issue.

Issue 3: Jurisdiction of the Income Tax Officer
The issue of the jurisdiction of the Income Tax Officer to make additions without rejecting the account books was raised by the assessee. The Tribunal considered this aspect and decided to recall the order to address the specific concern regarding the assessment made without rejecting the account books.

Issue 4: Scope of powers of the Tribunal
The Tribunal's decision to recall the order was challenged on the grounds that it went beyond the scope of its powers. The Tribunal was criticized for considering an issue that was not specifically pleaded or raised by the assessee in the grounds filed with the miscellaneous application.

Issue 5: Legal principles governing powers of review, rectification, and recall
The judgment discussed the legal principles governing the powers of review, rectification, and recall by judicial or quasi-judicial authorities. It emphasized that the power to recall an order should not be used as a substitute for the powers of review or rectification. The Tribunal was cautioned against recalling the order to rehear the matter as if it were exercising the power of appeal over its own judgment.

In conclusion, the High Court decided in favor of the revenue, setting aside the order dated 13.2.2009. The judgment highlighted the importance of adhering to legal principles and the limitations of the powers of judicial or quasi-judicial authorities in recalling orders and considering issues not raised by the parties involved.